The Zacks Analyst Blog Highlights: Prologis, Amazon.com, Winthrop Realty Trust, Brandywine Realty Trust and Kimberly Clark
CHICAGO, Jan. 24, 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 Prologis Inc (NYSE: PLD), Amazon.com Inc (Nasdaq: AMZN), Winthrop Realty Trust (NYSE: FUR), Brandywine Realty Trust (NYSE: BDN) and Kimberly Clark Corporation (NYSE: KMB).
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Here are highlights from Wednesday's Analyst Blog:
Prologis Inks Deal with Amazon
Prologis Inc (NYSE: PLD) – a real estate investment trust (REIT) – inked a build-to-suit deal with Amazon.com Inc (Nasdaq: AMZN) for constructing a distribution center at Prologis Park Tracy Phase II in Ca. This deal will likely strengthen Prologis' relationship with its high-end loyal customers.
Seattle, Wa.-based Amazon.com Inc. is one of the largest online retailers, with extensive operations worldwide. The company owns several strategic distribution facilities of Prologis in eight markets across the world.
The new facility will be developed on 90 acres of land at Prologis Park Tracy Phase II – the 1.2 million square feet property that comprises two buildings. The park is strategically located between major ports and is also contiguous to major west coast metro areas, including the San Francisco bay area. On the completion of the construction of Amazon's facility, Prologis Park Tracy Phase II will be fully occupied and comprise three distribution facilities, spanning approximately 2.2 million square feet.
We remain impressed with the company for taking such a step considering Amazon's thriving e-Commerce business and continued loyalty towards the former. This, in turn, is anticipated to provide steady source of rental revenue for Prologis going forward.
Prologis has been providing industrial distribution warehouse space through build-to-suit deals in some of the busiest distribution markets across the globe. Accordingly, in Nov 2012, Prologis signed such an agreement with a leading food and beverage company for approximately 1.2 million square feet of space in Lancaster, south of Dallas. These agreements have enabled the company to gain a significant advantage over its competitors.
Prologis is scheduled to release its fourth-quarter 2012 results on Feb 6, 2013. The Zacks Consensus Estimate for the company's fourth-quarter FFO (funds from operations) is currently pegged at 41 cents per share.
Zacks Earnings ESP (Read: ZACKS EARNINGS ESP: A BETTER METHOD) for Plum Creek is +7.32% for the fourth quarter. This, along with its Zacks Rank #2 (Buy), makes us confident about a positive earnings surprise call.
Two of Prologis' peers –
Winthrop Realty Trust (NYSE: FUR)
Brandywine Realty Trust (NYSE: BDN)
– also hold a Zacks Rank #2.
Note: FFO, a widely accepted and reported measure of the performance of REITs is derived by adding depreciation, amortization and other non-cash expenses to net income.
Earnings Preview: Kimberly Clark
Kimberly Clark Corporation (NYSE: KMB) is set to report fourth quarter and full year 2012 results on January 25. Last quarter it posted a 1.5% positive surprise. Let's see how things are shaping up for this announcement.
Growth Factors This Past Quarter
Kimberly Clark's cost saving initiatives, continued product innovation drove earnings growth in the third quarter.
Kimberly Clark has been hard hit by the ongoing macroeconomic challenges and volatility in cost. However the company is trying hard to combat the difficulty. Its cost saving program; FORCE (Focused on Reducing Costs Everywhere) is helping it to save costs through lean manufacturing and supply chain practices.
Kimberly Clark's leadership position in consumer product categories coupled with recent launch of many new products in the third quarter like Huggies Little Movers Slip-On diapers, Poise Hourglass Shape pads, Kleenex Cool Touch facial tissue, and improved Cottenelle bathroom tissue, added to revenue growth and market share of the company.
The company will be exiting the diaper category in Western and Central Europe, with the exception of the Italian market and will be divesting or exiting some lower-margin businesses in certain markets, mostly in the consumer tissue segment in order to improve underlying profitability and focus its resources on its strongest market positions and growth opportunities. The company will also streamline its European manufacturing footprint and administrative organization to align its cost structure with these strategic decisions. This will help it to improve margins in the coming quarter.
Our proven model does not conclusively show that Kimberly Clark is likely to beat earnings this quarter. That is because a stock needs to have both a positive earnings Expected Surprise Prediction (ESP) (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as shown below.
Negative Zacks ESP: The Most Accurate estimate stands at $1.33 while the Zacks Consensus Estimate is higher at $1.36. That is a difference of -2.21%.
Zacks Rank #3 (Hold): Kimberly Clark's Zacks Rank #3 (Hold) lowers the predictive power of ESP because the Zacks Rank #3 when combined with a negative ESP makes surprise prediction difficult.
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