The Zacks Analyst Blog Highlights: Royal Bank of Scotland Group, General Motors, Ford Motor, Toyota Motor and Fox Factory Holding

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Jun 10, 2014, 09:30 ET

CHICAGO, June 10, 2014 /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 Royal Bank of Scotland Group plc (NYSE:RBS-Free Report), General Motors Co. (NYSE:GM-Free Report), Ford Motor Co. (NYSE:F-Free Report) Toyota Motor Corp. (NYSE:TM-Free Report) andFox Factory Holding Corp (Nasdaq:FOXF-Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Monday's Analyst Blog:

Royal Bank of Scotland Now a Strong Buy

On Jun 6, Zacks Investment Research upgraded The Royal Bank of Scotland Group plc (NYSE:RBS-Free Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

The rank upgrade of this U.K.-based bank was driven by strong estimate revisions on the back of impressive first-quarter 2014 results.

On May 3, Royal Bank of Scotland declared its first-quarter 2014 results. Profit from continuing operations came in at £1.28 billion ($2.12 billion), rising more than twofold from £476 million ($739.4 million) in the prior-year quarter.

Results benefited from lower loan impairment losses, reduced operating expenses and higher net interest income. However, reduced non-interest income was the downside.

Further, management anticipates a modest increase in the net interest margin in the upcoming quarters given the ongoing economic recovery in the U.K.

Margins are expected to be slightly up and strategic initiatives to result in cost reductions and improve efficiency in 2014. While full implementation of these actions will take two to three years, management anticipates the underlying cost base to be lower by £1 billion in 2014.

Given the strong first-quarter results as well as the outlook for 2014, analysts' bullish stance is reflected in the stock. The Zacks Consensus Estimate for 2014 advanced significantly from 27 cents per share 30 days ago to 61 cents today. Also, for 2015, it moved north 25.0% to 65 cents per share.

GM Announces 4 More Recalls

General Motors Co. (NYSE:GM-Free Report) announced three safety recalls along with a non-compliance recall, in order to resolve safety issues. The automaker informed The National Highway Traffic Safety Administration (NHTSA) about these recalls on Jun 5, whereas customers will be informed through letters by General Motors. The automaker also confirmed that it will repair the vehicles for free at its dealerships and courtesy transportation would also be provided if needed.

The first recall is for 57,512 vehicles including Chevrolet Silverado LD and GMC Sierra LD of model year 2014 and Silverado HD, Tahoe and Suburban and GMC Sierra HD and Yukon and Yukon XL of model year 2015. General Motors recalled the vehicles due to the possibility of a malfunctioning base radio. In such a situation, there may not be any audible warnings when the driver's door is open and the key is in the ignition.

In addition, there may not be an audible chime even if the front seat belt is not buckled. These would lead to violation of motor vehicle safety standards covering theft protection, rollaway protection and occupant crash protection.

General Motors stated that dealers will reprogram the radio control module for no additional charge. However, there is no report of any fatality related to this issue.

In the second recall, General Motors included 31,520 Buick Verano of model year 2012 and Chevrolet Camaro, Cruze and Sonic compact vehicles. The recall is due to a defect in the dual stage driver's air bag. As a result of this defect, the air bag will not deploy in the event of a crash. Some crashes were reported regarding this issue.

General Motors notified that dealers will replace the steering wheel air bag coil for free to solve the problem. Previously, General Motors conducted two recalls for a total of 7,116 vehicles related to this problem.

Next, General Motors recalled 61 Chevrolet Sparks of model years 2013–2014 and Buick Encores of model year 2013, which were produced in Changwon, Korea during Dec 30, 2012 to May 8, 2013. The automaker recalled these vehicles due to a problem in the front passenger airbag, which would prevent proper deployment of the airbag in case of a crash. Meanwhile, there is no report of any causality due to his issue.

Finally, General Motors recalled 33 Chevrolet Corvettes of model year 2014 in the U.S. The automaker recalled the vehicles due to the possibility of an internal short-circuit in the sensing and diagnostic module (SDM), which can disable the frontal air bags, safety belt pretensioners and the Automatic Occupancy Sensing module. The company said that the dealers will replace the SDM in the recalled vehicles. However, no accidents were reported due to the problem.

Recently, General Motors agreed to pay a fine of $35 million to the U.S. safety regulators due to the late recall of cars with a defect in the ignition switch. Earlier, automakers like Ford Motor Co. (NYSE:F-Free Report) and Toyota Motor Corp. (NYSE:TM-Free Report) have also been penalized for delayed recalls.

General Motors currently holds a Zacks Rank #3 (Hold). Fox Factory Holding Corp (Nasdaq:FOXF-Free Report), carrying a Zacks Rank #1 (Strong Buy) is a better-ranked automobile stock worth considering.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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