The Zacks Analyst Blog Highlights: Tesla Motors, General Motors, Ford Motor, Oracle and Macy's

Zacks


For Immediate Release

Chicago, IL – August 2, 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 Tesla Motors Inc. (TSLA-Free Report), General Motors Company (GM-Free Report), Ford Motor Co. (F-Free Report), Oracle Corporation (ORCL-Free Report) and Macy’s Inc. (M-Free Report).

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

Here are highlights from Thursday’s Analyst Blog:

Tesla Motors to Foray into China?

Tesla Motors Inc. (TSLA-Free Report) is planning something big for the world’s biggest market – China. This looks the right time for the electric carmaker to enter the Chinese market where the government is trying to reduce the sale of vehicles that emit greenhouses gases and the luxury vehicles become increasing popular among the Chinese buyers. The company CEO Elon Musk described the move as a “wild card” in the company’s future.

Tesla plans to open its first showroom in central Beijing at the exclusive Parkview Green mall later this year. It would be an 8,000-square-foot showroom, roughly three times the size of its U.S. showrooms.

However, TSLA would face challenges strengthening its base in the country, mainly due to the lack of charging infrastructure. Moreover, its flagship car Model S would be subject to import and luxury taxes in the country, which would push up its already steep price.

Many global automakers have shown interest in capturing the potential luxury vehicles market in China, which is dominated by European brands. Last month, General Motors Company (GM-Free Report) broke ground for a $1.3 billion plant in China that will manufacture its popular Cadillac luxury model. GM aims to produce 160,000 vehicles annually from the plant.

In February, General Motors began producing Cadillac XTS sedan at a plant in Shanghai. GM plans to expand Cadillac’s dealer network to 200 by the end of the year from 69 last year despite sluggish sales, as it is optimistic about the long-term growth in the segment. Ford Motor Co. (F
-Free Report) also plans to introduce its Lincoln luxury lineup in China in the second half of 2014.

After months of sluggish growth owing to weak economic conditions and restrictions imposed by the government on new vehicles, total vehicle sales in China reflected a steady growth of 11.2% in Jun compared with 9.8% in May, according to the China Association of Automobile Manufacturers (:CAAM).

The steady growth in sales was mainly attributable to lower prices, which partially offset the effect of shortage of credit, weak economy and government restrictions on vehicle registration due to increasing traffic congestion and pollution in Chinese cities.

Shares of TSLA more than tripled this year. The stock debuted in the NASDAQ-100 Index and the NASDAQ-100 Equal Weighted Index on Jul 15, replacing technology giant Oracle Corporation (ORCL
-Free Report).

Tesla Motors posted its first-ever quarterly profit of $15.4 million, or 12 cents per share, on an adjusted basis, in the first quarter of 2013. This indicated a whopping positive earnings surprise of 271.4% given the Zacks Consensus Estimate of a loss of 7 cents for the quarter.

Revenues jumped manifold to $561.8 million from $30.2 million in the first quarter of 2012, thanks to the impressive 5,000 units of Model S electric car sales during the quarter. For full year 2013, the company expects to deliver 21,000 Model S cars globally, up 5% from its prior guidance of 20,000 units.

In May, TSLA also paid off the remaining $465 million U.S. Department of Energy (:DOE) loan much earlier than expected. The electric carmaker received the loan in Jan 2010 and agreed on a 10-year repayment program. However, the company repaid the full outstanding amount of the loan in the second installment itself.

We expect TSLA to beat estimates when it reports 2013-second quarter results before the opening bell on Aug 7 due to the combination of the stock’s Zacks Rank #1 (Strong Buy) and 27.8% ESP (Read:
Zacks Earnings ESP: A Better Method).

 

Macy’s Furthers Millennial Strategy

Macy’s Inc. (M-Free Report) is striving to further its “millennial strategy” in order to catch the attention of a new generation of customers. The millennial strategy was announced by the company in Oct 2012 as a tactical tool to keep itself buoyed on growth.

As part of this strategic endeavor, Macy’s has already launched/expanded 20 brands for the spring of 2013. Further, the company will add 2 special new brands, Maison Jules and QMack to its assortments. Macy’s intends to launch these 2 brands in nearly 150 stores in August.

These brands will be showcased at mstylelab stores, targeting customers in the age group of 13 to 22, and Impulse departments, principally catering to consumers aged 19 to 30. The company’s “millennial strategy” aims at tapping the young demographics of America, who are trendier and more fashion oriented. With the execution of its plans, Macy’s expects to attain a complete makeover by the end of 2013.

Apart from these two brands, the company will be offering several new brands to allure the fashion-conscious consumers. Such brands include Marilyn Monroe, MADE Fashion Week, Keds and Teen Vogue. 

Over the past year, the company has worked upon nearly 20 of its other brands which include Truth or Dare, G-Star Raw, Ambiguous, Ezekiel Clothing, COMUNE, DTA, Fatal Clothing, Plan B, Argyleculture, RACHEL Rachel Roy, else, kensie, DV by Dolce Vita, Material Girl, American Rag, Inglot cosmetics, Smashbox cosmetics, Kipling, Steve Madden handbags and Stussy.

Other than the millennial strategy, Macy’s has undertaken several prudent measures to drive sales, profitability and cash flow. These include integration of operations, consolidation of divisions and customer-centric localization initiatives. To help boost traffic, Macy’s continues to focus on price optimization, inventory management and merchandise planning to generate long-term profitability, which is well evident from its record of beating the quarterly earnings expectations.

Going forward, Macy’s is expected to continue with its upbeat performance through the My Macy's localization initiatives, omni channel integration, robust online sales and effective cost management. The company is seeking to expand both the Macy's and Bloomingdale's brands.

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