CHICAGO, Feb. 4, 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 Yum! Brands (NYSE:YUM-Free Report), McDonald (NYSE:MCD-Free Report), AK Steel (NYSE:AKS-Free Report), US Steel (NYSE:X-Free Report) and ArcelorMittal (NYSE:MT-Free Report).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Monday's Analyst Blog:
Yum Beats Earnings, Stock Takes Flight
Upon the earnings release for Yum! Brands' (NYSE:YUM-Free Report) fiscal 4th quarter 2013, after-market traders have been buying up shares of the stock. The global fast-food giant has gained 4% after the bell on Monday after posting earnings of 86 cents per share on revenues of $4.18 billion for the quarter. This amounts to a 7.5% positive earnings beat (and a 3-cents-per-share improvement yoy) on sales that came in light compared with our estimates.
So a mixed report sees this much love in the after-market? Sure -- it's clear investors were expecting bad news here, and they didn't really get it. Yum Restaurants International (YRI) actually came in 5% higher for the full year, despite being down 4% in China.
But everyone knew the avian flu issues in that country over the past year were going to lower its fortunes, and KFC is Yum's biggest business in China (it sells a lot more chicken there than McDonald's (NYSE:MCD-Free Report) does, and that company's already reported numbers were no great shakes). More important on this topic will be what the company projects going forward: Shanghai is currently banning chicken sales for three months and Hong Kong is doing so for three weeks.
Worldwide operating profit grew 2% in the quarter, including 5% in China, 2% in the U.S. and 11% in YRI. Yum's international business opened up a record-setting 1055 new stores, 708 of which were in emerging markets like Asia (ex-Japan), Latin America and Africa. Further, YRI saw key growth in select countries in Europe.
Analyst had been really taking down their earnings estimates throughout the quarter, for Q4, fiscal 2013 and fiscal 2014. Five downwardly revised estimates had taken place for the quarter in the past month, and three downward revisions came for the fiscal year numbers over the same time period. This helped lead Yum to a Zacks Rank #4 (Sell) ahead of the earnings report, though its longer-term recommendation is Neutral.
Consider also that while shares of YUM had fallen more than 11% year-to-date, largely on the continued bird-flu issues, this came off all-time highs toward the end of 2013. That said, the stock has been range bound going back nearly two years.
China remains key -- 50% of Yum's sales come from this country. For now it seems the other businesses, especially within YRI, have carried the company through to the earnings beat. Putting these serious avian flu problems behind them for good would likely demonstrate some strong upside for the shares.
"Steel" of a Deal
Last year Steel stocks barely made it out alive. After being down considerably most of the year a late stage rally helped push the sector into positive territory. As the sector limped across the finish line, the S&P 500 booked a 32.39% return on the year. Recently, a budding global economic recovery has seen steel come en vogue for 2014. Already this earnings season has given us a couple upside surprises on some big steel names.
AK Steel (NYSE:AKS-Free Report) reported fourth quarter earnings of $0.09, nearly doubling the analyst consensus of $0.05. This earnings surprise of 80% is a major factor contributing to a Zacks #2 Rank. This surprise led to upside revisions of 2014 estimates and helped bump AKS over $6 a share.
The day before AKS reported earnings, mainstay US Steel (NYSE:X-Free Report) surprised everyone to the upside. Analysts looking for a $0.26 loss in Q4 were shocked when the company reported positive earnings of $0.27 a share. Music to the ears of US Steel investors who had not heard a positive print since Q3 2012 when the company made $0.41 a share. Although analysts have curbed their expectations for Q1 of this year, the rest of year looks bullish for the steel business. All this together leads to a Zacks #1 Rank for US Steel.
Let's ignore the rearview mirror for a second and take aim on the future. With 2 major steel companies already reporting good quarterly numbers with upside surprises, who is next on the earnings calendar? The big boy on the block, ArcelorMittal (NYSE:MT-Free Report) is the world's leading steel and mining company. Operating in more than 60 countries this global company commands the lion's share of world steel market. Not only is the company a Zacks #1 Rank but it also reports earnings this week on February 7th. Given the great earnings we saw from AK Steel and US Steel, don't be surprised if ArcelorMittal beats the consensus estimate of a $0.16 loss.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Get the full Report on YUM - FREE
Get the full Report on MCD - FREE
Get the full Report on AKS - FREE
Get the full Report on X - FREE
Get the full Report on MT - FREE
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
SOURCE Zacks Investment Research, Inc.
Share this article