CHICAGO, Dec. 1, 2014 /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 the Diageo plc (NYSE:DEO-Free Report), Boston Beer Inc.(NYSE:SAM-Free Report), Keurig Green Mountain Inc. (Nasdaq:GMCR-Free Report) and Dr Pepper Snapple Inc. (NYSE:DPS-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Friday's Analyst Blog:
Diageo Down to Strong Sell on Weaker Sales
Zacks Investment Research downgraded Diageo plc (NYSE:DEO-Free Report) to a Zacks Rank #5 (Strong Sell) on Nov 28. This U.K.-based brewer has been witnessing downward estimate revisions after it reported disappointing first-quarter fiscal 2015 sales results on Oct 16, 2014. In fact, management expects the top line to be under pressure for the rest of the year.
Why the Downgrade?
Diageo's top line has been consistently hurt by currency headwinds since the beginning of fiscal 2014.
In the first quarter of fiscal 2015, both net sales and volume declined year over year mainly due to unfavorable currency translations and lower consumer confidence resulting from the ongoing macroeconomic headwinds.
Organic net sales (i.e. total revenue minus excise duties) declined 1.7%, while volume slipped 3.5% from the year-ago period
Emerging markets, which comprises roughly 25% of Diageo's total sales, witnessed soft top-line results due to weak consumer confidence. In particular, Asia recorded significant sales decline due to political turmoil in Thailand.
Moreover, government regulations in China prohibiting customary exchange of liquor as gifts during important business meetings/deal closures hurt Diageo's top line. Furthermore, economic slowdowns in Russia and South Africa affected sales negatively during the quarter.
Management expects currency impact to be higher…currency headwinds for the rest of the fiscal year. Moreover, the company expects lower sales following hyperinflation in the European region.
Stocks to Consider
Boston Beer Inc.(NYSE:SAM-Free Report)is a better-ranked beverage company with a Zacks Rank #2 (Buy). Other stocks worth considering in the consumer staples sector are Keurig Green Mountain Inc. (Nasdaq:GMCR-Free Report) and Dr Pepper Snapple Inc. (NYSE:DPS-Free Report) with the same Zacks Rank as Boston Beer.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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