For Immediate Release
Chicago, IL – July 29, 2013 – Zacks Equity Research highlights Tesla Motors (TSLA-Free Report) as the Bull of the Day and Caterpillar (CAT-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Anadarko Petroleum Corp. (APC-Free Report), Memorial Production Partners L.P. (MEMP-Free Report) and EPL Oil & Gas Inc. (EPL-Free Report).
Here is a synopsis of all five stocks:
2013 has been an incredible year for the automotive industry, but it has been particularly outstanding for newcomer Tesla Motors (TSLA-Free Report). The electric car manufacturer has made a name for itself thanks to solid sales and earnings that crushed estimates, while the cool factor of its vehicles have also helped the firm to gain some recognition.
These factors have allowed TSLA’s stock price to surge this year, as strong results and optimism over electric car demand in the future pushed the stock up to new heights. In fact, TSLA shares have added about 250% since the start of the year, and over 340% in the trailing one year period, making the company one of the hottest stocks in the market, and a favorite pick among growth investors.
Given this incredible surge, many are likely wondering if the run can continue for TSLA heading into the end of the year. If you look at analyst expectations for the company though, there is plenty of reason to believe that TSLA can keep this streak alive and put up some more solid gains.
Analysts remain extremely bullish on the company and we have seen some estimate revisions higher in the past few weeks. This has helped to push the current year consensus from a loss of 77 cents a share 30 days ago, to its current level of a loss of 60 cents a share today.
Current quarter and next quarter estimates have also risen over the past thirty days too, suggesting that analysts like the firm’s prospects in the short term as well.
This move higher in the estimates picture also helps to push the Earnings ESP for the current quarter up to 16.67%. So, the firm could be poised to beat estimates this quarter, at least when looking at this metric.
Thanks to sluggish global growth levels, a number of names engaged in commodity production have struggled this year. While most have focused in on mining companies as a representation of this trend, firms in the machinery segment—which often sell products to these commodity producers—have also been impacted.
In particular, investors have seen weakness in arguably the most famous firm in this space, Caterpillar (CAT-Free Report). The Illinois-based giant and DJIA component has stumbled in this environment and it may have some trouble in picking up the pieces, especially given how bearish many are on the company now.
Caterpillar has given analysts plenty of reason to be bearish too, as evidenced by the recent quarterly report. In the release, the firm fell well short of the Zacks Consensus Estimate of $1.70/share, posting earnings of just $1.45/share. Revenues also missed estimates, while sales were down across all regions, including a 25% decrease in the Asia-Pacific segment (year-over-year).
Even more troubling than this broad miss though, was the firm’s reduced outlook for the rest of 2013. CAT slashed its sales outlook range, and now expects to earn just $6.50 a share this year, compared to an earlier projection of $7.0/share in profits.
Will Anadarko (APC) Beat Earnings?
Anadarko Petroleum Corp. (APC-Free Report) is slated to release its second quarter 2013 earnings results after the market bell on Jul 29. Last quarter, the company reported a positive earnings surprise of 17.39%. Let’s see how things are shaping up for the oil and gas operator for this announcement.
Factors to Consider This Quarter
Anadarko Petroleum’s aggressive exploration programs at the deepwater Gulf of Mexico will continue to drive growth. In addition, commencement of oil production at the El Merck play in Algeria will add to the company’s revenue stream.
The company’s Marcellus and Eagleford domestic plays are also expected to record favorable production, accelerating returns. However, fluctuations in commodity prices might affect Anadarko Petroleum’s top-line in the second quarter.
Our proven model does not conclusively show that Anadarko Petroleum is likely to beat earnings this quarter. This is because a stock needs to have both a positive earnings Expected Surprise Prediction (ESP) (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Negative Zacks ESP: The Most Accurate estimate stands at 90 cents while the Zacks Consensus Estimate is higher at 91 cents. This comes to a difference of -1.10%.
Zacks Rank #3 (Hold): Anadarko Petroleum has a Zacks Rank #3 (Hold). This combined with an ESP of -1.10% makes surprise prediction difficult. We caution against stocks with Zacks Ranks #4 and 5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Other Stocks to Consider
Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
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