The Zacks Analyst Blog Highlights: Brinker International, DineEquity, AFC Enterprises, CEC Entertainment and CONMED

Zacks

For Immediate Release
 
Chicago, IL – September 19, 2013 – 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 Brinker International Inc.’s (EAT-Free Report), DineEquity, Inc. (DIN-Free Report), AFC Enterprises Inc. (AFCE-Free Report), CEC Entertainment Inc. (CEC-Free Report) and CONMED Corporation (CNMD-Free Report)
 
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Here are highlights from Wednesday’s Analyst Blog:

Brinker Partners with Ziosk

Dallas, Texas-based restaurateur Brinker International Inc.’s (EAT-Free Report) subsidiary Chili’s Grill & Bar (Chili’s) recently partnered with Ziosk, the manufacturer of world’s first pay-at-the table, entertainment and easy-ordering solutions tablet especially designed for the restaurant sector. Per the deal, Chili’s will install Ziosk 7-inch tabletop tablets across all of its 823 company-owned restaurants in the U.S. by the first half of 2014.

The company has received impressive feedback for the experimental rollout of the device at some of its company-owned locations. Hence, it has decided to go ahead with the introduction of the Ziosk touch screen tablets at all its restaurants to boost guest satisfaction. 

This tablet will allow the customers to easily choose food items from Chili’s wide range of menus. Also, the pay-on-demand facility will quicken bill payment. Apart from this, the Ziosk tablet will also offer several entertainment facilities such as video games, music and Facebook for the guests.

Another restaurateur, DineEquity, Inc. (DIN-Free Report), has also brought Ziosk devices in its Applebee’s Neighborhood Grill and Bar (Applebee's) restaurants.

The use of technological devices is continuously increasing among consumers. In 2012, Technomic carried out a Consumer-Facing Technology Survey which found around 51% consumers voting for digital ordering. Thus, the launch of Ziosk will take Brinker a step forward in using technology-based services.

The partnership will help the Zacks Rank #3 (Hold) company drive traffic and sales through enhanced customer experience. These devices will improve the dining experience by making it customer friendly.

Other Stocks to Consider

Other players in the restaurant industry that look attractive at the current levels include AFC Enterprises Inc. (AFCE-Free Report) and CEC Entertainment Inc. (CEC-Free Report). Both these restaurateurs carry a Zacks Rank #2 (Buy).

CONMED Slips to Sell

On Sep 17, Zacks Investment Research downgraded CONMED Corporation (CNMD-Free Report) to a Zacks Rank #4 (Sell) from Zacks Rank #3 (Hold).

Why the Downgrade?

CONMED witnessed downward estimate revisions following disappointing second-quarter 2013 results. The medical technologies and surgical devices company also provided a lower guidance for 2013.

On July 26, CONMED reported second-quarter adjusted earnings per share that remained flat year-over-year at 43 cents and missed the Zacks Consensus Estimate by 2 cents. Revenues dropped 1.7% (2.3% at constant exchange rate) to $193.0 million, reflecting a soft healthcare utilization and spending environment in the global economy. Revenues missed the Zacks Consensus Estimate by 1.5%.

Ongoing dismal macroeconomic conditions along with poor capital spending and sluggish volume/procedure growth are major causes of worry. Moreover, the company operates in a highly-competitive orthopedic surgery market against larger and more technically-competent companies. However, the only positive factor in the second quarter results was the company’s higher margins driven by leveraged operating efficiency and cost-saving initiatives undertaken by management.

CONMED lowered its guidance for 2013, owing to the difficult austerity measures persisting in Europe as well as flattish healthcare utilization rate in the U.S. The company narrowed its previous earnings guidance of $1.80-$1.90 per share to $1.80-$1.85 per share. The guidance assumes negative impact of the medical device excise tax and foreign exchange headwinds. Similarly, management also lowered its estimated 2013 sales forecast to $770 million–$775 million from the earlier prediction of $770 million–$780 million.


The Zacks Consensus Estimate for 2013 inched up 0.6% to $1.82 per share over the last 30 days. However, for 2014, the Zacks Consensus Estimate decreased by roughly 1% to $2.05 per share over the same period.

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