The Zacks Analyst Blog Highlights: Intel, Jarden, Micron Technology, Lithia Motors and Chubb
For Immediate Release
Chicago, IL – October 15, 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 Intel Corp. (INTC-Free Report), Jarden Corp. (JAH-Free Report), Micron Technology Inc. (MU-Free Report), Lithia Motors Inc. (LAD-Free Report) and The Chubb Corp. (CB-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Monday’s Analyst Blog:
Will Intel (INTC) Beat Earnings Estimates?
Intel Corp. (INTC-Free Report) is set to report third-quarter 2013 results on Oct 15. Last quarter, it posted a 3% negative surprise. Let’s see how things are shaping up for this announcement.
Growth Factors This Past Quarter
The company’s second-quarter earnings were below the Zacks Consensus Estimate by a penny. Revenues were up sequentially but down from the year-ago quarter. Weaker-than-expected PC demand stemming from tablet cannibalization and restrained consumer buying due to tighter budgets continued to impact results in the last quarter.
The second quarter was strong for Intel in terms of sequential margin growth. This was mainly attributable to higher volumes and qualification of Haswell products for sale.
Earnings Whispers?
Our proven model does not conclusively show that Intel will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 53 cents. Hence, the difference is 0.00%.
Zacks Rank #3 (Hold): Intel’s Zacks Rank #3 (Hold) when combined with a 0.00% ESP 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 momentum.
Other Stocks to Consider
You could consider other stocks with a positive earnings ESP and Zacks Rank #1, 2 or 3 such as:
Jarden Corp. (JAH-Free Report), with Earnings ESP of +1.00% and a Zacks Rank #1 (Strong Buy).
Micron Technology Inc. (MU-Free Report), with Earnings ESP of +4.35% and a Zacks Rank #1 (Strong Buy).
Lithia Motors Inc. (LAD-Free Report), with Earnings ESP of +2.73% and a Zacks Rank #2 (Buy).
Chubb Stays Outperform
We are reiterating our Outperform recommendation on The Chubb Corp. (CB-Free Report), reflecting our continued optimism about the company’s growth prospects. Chubb carries a Zacks Rank #2 (Buy)
Why reiteration?
Chubb boasts of a diversified product profile and has a niche market presence in the property and casualty industry.
Chubb’s Commercial insurance segment has been consistently reporting favorable earnings results. The segment has been witnessing low-single-digits increase in average renewal rates over the past several quarters. Retention ratio stands at a stable level.
Chubb’s Personal Insurance segment is also witnessing a gradual market improvement. The segment has been witnessing an increase in net premium written from the past several quarters, led by strong premium increases from international business
Chubb’s international business is also performing strongly to very adequately support its future growth.
Strong capital management witnessed by regular share repurchases and a continuous dividend increase for the past several years makes the stock a favorite among investors.
However, exposure to cat losses and low interest rate environment are some of the headwinds.
Chubb has been also witnessing rising earnings estimates. Over the last 30 days, the Zacks Consensus Estimate for 2013 moved up by 2.3% to $7.56 as 6 of the 12 estimates moved north. The same for 2014 rose 0.3% to $7.26 as 1of 16 estimates were raised over the same time frame. The expected long term earnings growth is 10.5%.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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