CHICAGO, April 25, 2013 /PRNewswire/ -- 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 Covidien plc (NYSE: COV), Central Garden & Pet Company (Nasdaq: CENT), Wal-Mart Stores Inc. (NYSE: WMT), The Home Depot, Inc. (NYSE: HD) and Jarden Corp. (NYSE: JAH).
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Wednesday's Analyst Blog:
Covidien Likely to Beat Estimates?
We expect major healthcare company, Covidien plc (NYSE: COV) to beat expectations when it reports second-quarter fiscal 2013 results on Apr 26.
Why a Likely Positive Surprise? Our proven model shows that Covidien is likely to beat earnings because it has the right combination of two key ingredients.
Positive Zacks ESP: Earnings ESP (Read: Zacks Earnings ESP: A Better Method), which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is at +0.91%. This is a very meaningful and leading indicator of a likely positive earnings surprise for shares.
Zacks Rank #3 (Hold): Covidien has a Zacks Rank #3 (Hold). Note that stocks with Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings. The sell rated stocks (#4 and #5) should never be considered going into an earnings announcement.
The combination of Covidien's Zacks Rank #3 (Hold) and +0.91% ESP makes us very confident in looking for a positive earnings beat on Apr 26.
What is Driving the Better Than Expected Earnings?
A host of factors such as solid top-line growth on the back of acquisitions (focused on emerging markets) and new offerings along with a share repurchase program are expected to lead to a positive earnings surprise in the upcoming quarter.
The positive trend is seen in the trailing four-quarter average surprise of 2.16%, which was greatly helped by the 3.77% surprise in the last-reported quarter. This was mainly due to an efficient management team capable of delivering solid results despite a difficult Medtech space.
Central Garden Upgraded to Neutral
upgraded consumer goods company, Central Garden & Pet Company (Nasdaq: CENT) to Neutral based on improved prospects owing to its strategic initiatives. Central Garden, which focuses on lawn & garden and pet products, carries a Zacks Rank #3 (Hold).
Why the Upgrade?
Central Garden & Pet's primary focus is on streamlining its cost structure, increasing operating efficiencies in order to improve its margins and concentrating on revenue growth through marketing and brand-building initiatives. The company's long-term target is to attain growth of at least 10% in the top line, and achieve operating margins in the range of 10% – 15%. The company also targets $40 million in cumulative cost savings as it exits fiscal 2013.
Alongside, being the leading producer of garden and pet supplies products in the U.S. and with a diversified portfolio of brands, Central Garden & Pet developed a healthy commercial relationship with giant retailers, such as Wal-Mart Stores Inc. (NYSE: WMT) and The Home Depot, Inc. (NYSE: HD). This provides a significant upside potential for the company.
However, the discretionary spending environment continues to remain sluggish amid high unemployment levels and tight credit markets. This is a looming concern for the company as a significant portion of its product portfolio consists of premium offerings.
Other Stock to Consider
Besides Central Garden, the other stock in the consumer goods sector worth considering includes Jarden Corp. (NYSE: JAH), which holds a Zacks Rank #1 (Strong Buy) and is expected to continue with its upbeat performance.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
SOURCE Zacks Investment Research, Inc.