The Zacks Analyst Blog Highlights: Groupon, Amazon.com, Google, Praxair and Air Products & Chemicals
CHICAGO, Dec. 27, 2012 /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 Groupon Inc. (Nasdaq: GRPN), Amazon.com Inc. (Nasdaq: AMZN), Google Inc. (Nasdaq: GOOG), Praxair Inc. (NYSE: PX) and Air Products & Chemicals Inc. (NYSE: APD).
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Here are highlights from Wednesday's Analyst Blog:
Groupon Buys CommerceInterface
Online deals provider Groupon Inc. (Nasdaq: GRPN) recently announced that it has acquired Salt Lake City based online retail manager CommerceInterface. However, the company did not disclose the financial details of the transaction.
Founded in 2007, CommerceInterface's channel management technology helps in aggregating goods from multiple vendors on an e-commerce platform. Since April 2012, Groupon has been using the technology for its Groupon Goods platform, through which merchants post sales of different items that include diamond jewellery, designer sun glasses, mattresses, computers and many more.
The acquisition of CommerceInterface is expected to better Groupon's existing domestic e-commerce service going forward. However, for 2013, we believe that the primary focus will be on expanding the Groupon Goods platform in international markets. At the end of the third quarter of 2012, Groupon Goods reached an annual run rate of approximately $1.5 billion in global billings.
The company also announced that post CommerceInterface acquisition, its technology will be solely used by Groupon. Currently, CommerceInterface serves a number of other merchants who post their sales on different e-commerce websites such as Amazon.com Inc. (Nasdaq: AMZN).
Groupon is offering migration support to CommerceInterface's current customers, who will have the option to shift to other vendors over the next six months. We believe that the exclusivity of CommerceInterface technology will provide competitive advantage to Groupon over its peers going forward.
Groupon has been on an acquisition spree over the last 12 months. The company has acquired a number of start-ups such as Breadcrumb, Uptake, Hyperpublic, Adku, and FeeFighters. These acquisitions are expected to boost Groupon's position in the small and medium-size business (SMB) market, apart from expanding its technology and product portfolio.
We believe that Groupon is well positioned to gain from rising e-commerce spending on mobile devices, a profitable domestic market and an under-penetrated international market. We expect these opportunities to continue to drive top-line growth going forward.
Groupon enjoys a first-mover advantage in the daily deals market based on its well-recognized discount coupons. However, we believe that the market is getting more competitive due to the growing interest from technology stalwarts such as Amazon and Google Inc. (Nasdaq: GOOG).
Moreover, we believe that Groupon needs to post profits consistently for the next couple of quarters to gain the confidence of its jittery investors. Until that happens, we prefer to remain Neutral on the stock over the long term.
Currently, Groupon has a Zacks #3 Rank (Hold).
Praxair Sends Helium Prices Rising
A week after announcing price increases for industrial gases—including nitrogen, oxygen, carbon dioxide, among others—industrial gas producer and supplier, Praxair Inc. (NYSE: PX) raised prices for bulk purchase of liquid helium for its customers.
The change, which implies an increase of up to 30%, will be effective from January 1, 2013 for all bulk helium transactions in Europe, Latin America and Asia. Higher raw material costs and maintenance of supply/demand balance were the prime catalysts driving this revision.
It is also worth mentioning that recently, Praxair's prime competitor, Air Products & Chemicals Inc. (NYSE: APD) announced increases in bulk and liquid helium prices for its North American customers. The price revision will come into effect from January 1, 2013 and will enable Air Products to cover rising costs to maintain supply and secure new sources for its customers.
Long-term prospects look promising for Praxair with increasing application areas for industrial gases. Chemical processing, petroleum refining, metal production, fabricating, electronics and health care industries are widely using these gases. By 2015, the company targets to achieve annual organic sales growth of 8%-12%; operating profit growth of 10%-15%, and earnings growth of 12%-18%.
The current Zacks Consensus Estimate for the fourth quarter stands at $1.38, representing a year-over-year increase of 1.8%. Estimates for years 2012 and 2013 are $5.57 and $6.18, reflecting annual growth of 2.5% and 11.1%, respectively.
We currently maintain a Neutral recommendation on Praxair. The stock also currently bears a Zacks #4 Rank, implying a short-term Sell rating. Air Products & Chemicals has a Zacks #3 Rank (Hold).
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