Antero Resources, G-III Apparel Group, Panera Bread and Starbucks highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – April 04, 2017 –Zacks Equity Research highlights Antero Resources (NYSE: AR – Free Report ) as the Bull of the Day, G-III Apparel Group (NASDAQ: GIII – Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Panera Bread Co. (NASDAQ: PNRA – Free Report ) and Starbucks (NASDAQ: SBUX – Free Report ).
Here is a synopsis of all four stocks:
Bull of the Day :
Last week, Baker Hughes reported that U.S. supplies of natural gas unexpectedly fell by 43 billion cubic feet. This news put the spotlight on Natural Gas Liquid (NGL) production. Our Zacks Bull of the Day,Antero Resources (NYSE: AR – Free Report ) is currently well positioned itself to take advantage of this news as they are in the process of doubling their NGL production by 2020.
This Zacks Ranked #1 (Strong Buy) is an independent oil and natural gas company. It is primarily engaged in the exploitation, development and acquisition of unconventional oil and liquids-rich natural gas properties primarily located in the Appalachian Basin in West Virginia, Ohio and Pennsylvania. Antero Resources Corporation is headquartered in Denver, Colorado.
Recent Earnings Data
Antero Resources easily beat both the Zacks consensus earnings and revenue estimates for the 6th consecutive quarter. On a year over year basis, the company saw gains in net daily equivalent production average +33%, liquids production +59% (all-time record production in the quarter), and adjusted net income +26%. Management also increased their 2017 C3+ natural gas liquids (NGL) price realization guidance before hedging from a range of 45%-50%, to a range of 50%-55%.
New Pipeline Projects
In February, two pipeline projects received approval; Mariner East 2 pipeline project was issued permits for the construction of the 350 mile NGL pipeline. This pipeline is owned by Sunoco, but Antero is an anchor shipper with a 31,500 barrels per day commitment. This pipeline is expected to be placed into service by the end of Q3 17. Also, Energy Transfer partners received approval to construct the Rover Pipeline where Antero is an anchor shipper with an 800,000 MMBtu/d firm commitment. According to management, “ The pipeline will connect Antero's Marcellus and Utica Shale assets to the Midwest and Gulf Coast via additional downstream firm transportation that Antero already holds. The project will also enable Antero to transport natural gas both from the Sherwood and Seneca processing facilities, allowing for maximum optionality on its firm transportation portfolio .” The Rover Pipeline is expected to be in service by Q3 17.
Management’s Take
According to Glen Warren, President and CFO, " During the fourth quarter, Antero was the largest producer of C3+ natural gas liquids in Appalachia and realized a C3+ natural gas liquids price before hedging of $25.22, which was 51% of the average Nymex WTI oil price and 45% higher than the prior year quarter. This realization was also well above the top of our full year NGL pricing guidance range of 35% to 40% of WTI. When this improvement in NGL pricing outlook is combined with our continued growth in liquids production and the buildout of the Mariner East 2 project, we believe we have the most powerful NGL story in the Northeast ."
Bear of the Day :
Big retail companies have been closing stores, and cutting expenditures to stem their losses as they watch their revenues decline due to shifting customer buying behavior. As has been the issue for quite some time, customers continue to shun the traditional brick and mortar store in favor of ecommerce. These revenue issues are only compounded when their most recent acquisition isn’t expected to show any profits until the second half of 2017 at its earliest. These are some of the issues facing our Zacks Bear of the Day, G-III Apparel Group (NASDAQ: GIII – Free Report ).
This Zacks Ranked #5 (Strong Sell) designs, manufactures, imports & markets an extensive range of leather & non-leather apparel including coats, jackets, pants, skirts & other sportswear items.
Recent Earnings Report Data
Last week, GIII reported Q4 17 results, where they posted their third consecutive quarter of missing both the Zacks consensus earnings and revenue estimates. On a year over year basis, the company saw declines in GAAP net income -54.6%, and non-GAAP net income per diluted share -41.8%. Further, the Donna Karan International (DKI) acquisition (completed on December 1, 2016) resulted in an operating loss of $9.2 million, and interest expenses of $7.5 million for FY 17. These losses from DKI had a -$0.21 dilutive impact on EPS. Further management announced FY 18 guidance where they expect the DKI acquisition to have a -$0.85 dilutive impact on EPS. Further, management currently expects the DKI acquisition to not become profitable till Q3 18.
Management’s Take
According to Morris Goldfarb, Chairman and Chief Executive Officer, “ Fiscal 2017 was another important year for our Company. We completed the acquisition of Donna Karan which made us the owner of two of the world’s most iconic and recognizable power brands in Donna Karan and DKNY. This acquisition further bolsters our value proposition and strengthens our position as an all-season diversified apparel company with a broad portfolio of brands offered in multiple channels of retail distribution. Our non-outerwear wholesale business performed well in the face of significant headwinds as the traditional retail environment has become increasingly disrupted as a result of evolving consumer buying behavior and continued penetration of e-commerce. We expect to initiate a number of new product launches in the coming year as we seek to offer superior value in the marketplace .”
Mr. Goldfarb continued, “ While our near-term financial outlook reflects the dilutive impact of our recent acquisition of Donna Karan, we believe the mid-year re-launch of the DKNY and Donna Karan brands will have a positive impact in the second half of the year. We are confident that we have one of the most desirable portfolios of brands in the industry and that DKNY and Donna Karan will quickly take their place alongside Calvin Klein, Tommy Hilfiger, and Karl Lagerfeld as the cornerstone brands for the growth of our business .”
Additional content:
Panera Bread (PNRA) Soars on Buyout Rumors
Shares of Panera Bread Co. (NASDAQ: PNRA – Free Report ) rapidly spiked more than 9% in late morning trading Monday following the release of a new report suggesting it is exploring a possible sale.
According to sources cited by Bloomberg , the company is currently exploring several strategic options—including a sale—after it received takeover interest. These sources, who preferred not to be named, said that Panera is working with advisers to study the options right now.
With a market cap of nearly $6 billion, Panera Bread is a major player in the hotly-contested world of fast-casual retail restaurants. The company operates over 2,000 bakery-cafes throughout North America, and the brand is known for its artisan breads, baked goods, and friendly in-store environments.
Panera has strung together an impressive streak of earnings beats, and its stock has gained about 25% so far this year. This run means that potential buyers would not necessarily be getting the company at a discount, which leads us to the obvious question regarding who could be interested in Panera right now.
Investors on social media were quick to suggest that Starbucks (NASDAQ: SBUX – Free Report ) might be a fitting suitor, and CNBC’s Jim Cramer reiterated this idea shortly thereafter. Nevertheless, neither party has confirmed the reports.
After its recent efforts to expand its food offerings and in-shop experiences, it might make sense for Starbucks to look at a company like Panera. It’s also worth noting that long-time Starbucks CEO Howard Schultz recently stepped down from his position, ushering in a new era for company leadership (also read: Starbucks News: $10 Coffee, Its Next Five Years, Princi is a Go ).
Of course, we are in the very early stages of any potential buyout, and there is no provable link between Starbucks and Panera at the moment. Regardless, investors will want to keep a close eye on this story as it continues to play out.
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About the Bull and Bear of the Day
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Antero Resources Corporation (AR): Free Stock Analysis Report
G-III Apparel Group, LTD. (GIII): Free Stock Analysis Report
Panera Bread Company (PNRA): Free Stock Analysis Report
Starbucks Corporation (SBUX): Free Stock Analysis Report
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