The Zacks Analyst Blog Highlights: Tesla Motors, Goldman Sachs, Nissan Motor, General Motors and Cracker Barrel Old Country Store
For Immediate Release
Chicago, IL – July 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 Tesla Motors Inc. (TSLA-Free Report), Goldman Sachs (GS-Free Report), Nissan Motor (NSANY-Free Report), General Motors (GM-Free Report) and Cracker Barrel Old Country Store Inc. (CBRL-Free Report).
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Here are highlights from Thursday’s Analyst Blog:
Tesla Motors Regains Glory
Tesla Motors Inc. (TSLA-Free Report) has regained its glory by escalating 10.3% yesterday for the first time since its disappointing debut in NASDAQ-100 on Jul 15. The stock opened at an all-time high of $133.26 on Jul 15 but started falling, witnessing its biggest one-day drop of 14.3% to $109.05 next day since Jan 2012 due to a bearish report by Goldman Sachs (GS-Free Report) on the stock.
The turnaround gain of TSLA was attributable to optimism raised by some brokerage firms about the automotive industry in the U.S. as well as about the company being a leading electric vehicle maker. Moreover, Fed chairman Ben Bernanke’s recent announcement of continuing with the stimulus policies raised optimism among the investors.
Auto sales in the U.S. grew 9.2% to 1.40 million units in Jun, translating into a 13.2% year-over-year rise to a seasonally adjusted annual rate (:SAAR) of 15.96 million units, the fastest since Dec 2007. The increase was largely attributable to a growing popularity of pickups among buyers amidst improvements in housing, construction and energy sectors.
Further, strong pent-up demand, a plethora of new models, lower interest on auto loans and a resilient economy leading to higher consumer confidence contributed to the big push in auto sales.
Tesla Motors CEO, CTO and co-founder Elon Musk, who is also the co-founder of electronic payments system PayPal and former CEO of rocket ships and spacecraft builder company SpaceX, surprised investors in its tweeter comments on Jul 15 by laying stress on its dream of building a hyperloop rapid transit system in the future. Musk has been talking about this “fifth mode of transportation” alongside trains, planes, cars and boats for almost a year.
Although Musk agrees that his idea of building the futuristic transit system is in alpha stage, his assertions could not be considered as a bluff or something to be laughed at. Some said that the idea could be materialized with the help of pneumatic tube systems, which use compressed air to transport objects through a tube.
TSLA more than tripled this year. The stock started escalating at a fast pace following the release of its surprising 2013-first quarter results on May 8. The company 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.
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.
Last December, Tesla made its first DOE loan repayment of nearly $13 million. On May 22, the company paid off the remaining $451.8 million using the near-$1 billion proceeds from the common stock and convertible senior note offering made last week.
In May, Tesla also came up with a surprise announcement of adding more supercharging stations across the U.S. that are 10 times faster than the ordinary public charging stations, which could boost demand for its electric cars. TSLA plans to increase the number of charging stations threefold from 9 to 27 by the end of next month, which could further rise to 100 by the end of next year.
By 2014, Tesla plans to install charging stations within the reach of 80% of people in the U.S. and Canada, and 98% by 2015. With this, the company intends to provide supercharging stations every 80 to 100 miles.
Electric cars have always been criticized for limited driving range leading to their weak demand. This led to limited sales of vehicles such as Nissan Motor’s (NSANY-Free Report) Leaf and General Motors’ (GM-Free Report) Volt. However, Tesla’s innovative ideas about making electric cars much more affordable and driver-friendly give it a competitive edge over rival automakers.
Tesla reiterated its goal to sell 800 vehicles per week by the end of 2014 and plans to build a minivan next year. It has also teamed up with Japanese electronics behemoth Panasonic to ramp up production of lithium batteries for electric cars.
Currently, shares of Tesla retain a Zacks Rank #3, which implies a short-term (one to three months) Hold rating.
Cracker Barrel Upgraded to Strong Buy
On Jul 17, Zacks Investment Research upgraded Cracker Barrel Old Country Store Inc. (CBRL-Free Report) to a Zacks Rank #1 (Strong Buy) based on its upbeat outlook for the forthcoming quarter. Also, a splendid return of more than 60.0% over the past one year and an extremely solid dividend growth story make Cracker Barrel an attractive investment opportunity.
Why the Upgrade?
Management raised the lower-end of its comparable sales growth guidance from 2.0% to 2.5% for fiscal 2013 despite a weak consumer spending environment. This implies that Cracker Barrel expects a strong business environment for the upcoming quarter. Management also upped its operating margin and adjusted earnings guidance for fiscal 2013. Adjusted earnings per share are now expected in the range of $4.75 to $4.85, up from the previous guidance of $4.60 to $4.80.
Cracker Barrel continues to post positive earnings surprises. This leading restaurant chain delivered positive earnings surprises in the last 4 quarters with an average beat of 9.88%. In the last reported quarter, the company outperformed the Zacks Consensus Estimate by 7.37%. Also, the restaurateur tripled its dividend since Apr 2012.
On Jun 07, Cracker Barrel delivered solid third-quarter 2013 earnings where revenues grew 5.2%, thanks to higher traffic and positive comparable store sales (comps) growth at both restaurants and retail segments. Earnings took a further leap of 26% from the year-ago level buoyed by margin expansion. Cracker Barrel beat the Zacks Consensus Estimate on both counts.
The data also confirms Cracker Barrel’s bullish run. The company has been witnessing rising earnings estimates since it reported its third-quarter results. Over the past 60 days, the Zacks Consensus Estimate for 2013 and 2014 increased 2.1% and 2.4%, respectively as most of the estimates moved upward with no negative revision. The Zacks Consensus Estimate for 2013 and 2014 represents year-over-year increases of 5.45% and 15.45%, respectively.
The restaurateur is expected to report its fourth-quarter earnings on Sep 16, 2013. Expected Surprise Prediction or ESP (Read: Zacks Earnings ESP: A Better Method) of Cracker Barrel is +8.15%. In fact, the combination of the stock’s Zacks Rank #1 and +8.15% ESP makes us confident of an earnings beat this quarter.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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