The Zacks Analyst Blog Highlights:Potash Corp. of Saskatchewan, Starbucks, Whole Foods Market, Burger King Worldwide and Cracker Barrel Old Country Store
CHICAGO, Sept. 4, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Potash Corp. of Saskatchewan, Inc. (NYSE:POT-Free Report), Starbucks Corporation (Nasdaq:SBUX-Free Report), Whole Foods Market, Inc (Nasdaq:WFM-Free Report), Burger King Worldwide, Inc. (NYSE:BKW-Free Report) and Cracker Barrel Old Country Store, Inc. (Nasdaq:CBRL-Free Report).
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Here are highlights from Tuesday's Analyst Blog:
Potash Cut to Underperform
On Sep 2, we downgraded leading fertilizer company Potash Corp. of Saskatchewan, Inc. (NYSE:POT-Free Report) to Underperform factoring in the weak price environment and a still challenging demand scenario in India.
Why the Downgrade?
Both revenues and earnings for second-quarter 2013, reported on Jul 25, miss Zacks Consensus Estimates. Revenues fell by double digits year over year, hurt by lower pricing across all three nutrients and competitive pressure. The company cut its earnings forecast for the full year taking into account the price decline.
Estimates for Potash Corp. are on the downswing following the release of the second quarter results. The Zacks Consensus Estimate for 2013 has gone down roughly 17% to $2.48 per share as most of the estimates were revised downward. On a similar note, the Zacks Consensus Estimate for 2014 has slipped roughly 24% to $2.48. With the Zacks Consensus Estimates for both 2012 and 2013 going down, Potash Corp. now has a Zacks #5 Rank (Strong Sell).
While Potash Corp. will benefit from strong geographic diversification and expanded operational capability in potash, it is exposed to macroeconomic uncertainties and price volatility. Average realized potash price fell 18% year over year in the second quarter as competitive pressure pulled down contract and spot market prices. Pricing pressure was also witnessed in the phosphate segment.
Moreover, Potash Corp. is seeing somewhat weak potash demand in India, a key market. Indian government's move to trim potash subsidy levels coupled with higher retail pricing and local currency devaluation resulted in lower demand in the country. Adding to the problems is declining crop yields. These challenges may sustain through second-half 2013.
Whole Foods to Sell Starbucks Juices
Coffee giant Starbucks Corporation (Nasdaq:SBUX-Free Report) recently announced that its Evolution Fresh line of premium juices will now be available at the supermarket chain, Whole Foods Market, Inc (Nasdaq:WFM-Free Report). In addition, Whole Foods will also provide shelf space to the new Evolution Harvest line of premium snacks.
In addition to 12 popular Evolution Fresh juices, the supermarket chain will also stack two exclusive juices – Organic Ruby Roots and Organic Sweet Burn. The Evolution Harvest wholesome snack items will debut at the Whole Foods shelves. Thereafter, these premium nutritious bars, trail mixes and fruit snacks are expected to be rolled out in Starbucks stores across all major U.S. metropolitan markets in a couple of months.
Starbucks opened its first Evolution Fresh juice store in Bellevue, Wash. in Mar 2012, four months after it acquired Evolution Fresh, Inc. in Nov 2011. Evolution Fresh stores offers premium juices made from fresh, natural ingredients as well as other food items like wraps, salads, soups, vegetarian and vegan dishes and others. The juices are never heated and are made by a process called the High Pressure Processing (HPP) technology which preserves the flavors, vitamins and nutrients of the vegetable and fruits. Starbucks is looking beyond coffee and trying to incorporate more healthy products in its portfolio in order to meet the needs of the increasingly health-conscious Americans.
Evolution Fresh beverages are expected to be available in approximately 8000 U.S. Starbucks stores by the end of 2013.
Starbucks carries a Zacks Rank #3 (Hold). Other restaurateurs such as Burger King Worldwide, Inc. (NYSE:BKW-Free Report) and Cracker Barrel Old Country Store, Inc. (Nasdaq:CBRL-Free Report) are currently doing well and have a bright outlook. All these stocks carry a Zacks Rank #2 (Buy).
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