The Zacks Analyst Blog Highlights:BJ's Restaurants, PepsiCo, Domino's Pizza, PNC Financial Services Group and Mitsubishi UFJ Financial Group
CHICAGO, Nov. 1, 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 BJ's Restaurants Inc. (Nasdaq: BJRI), PepsiCo Inc. (NYSE: PEP), Domino's Pizza Inc. (NYSE: DPZ), PNC Financial Services Group Inc. (NYSE: PNC) and Mitsubishi UFJ Financial Group, Inc. (NYSE: MTU).
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Here are highlights from Wednesday's Analyst Blog:
BJ's Brings In Pepsi, House of Blues Vet
BJ's Restaurants Inc. (Nasdaq: BJRI) recently revealed that it has appointed Gregory A. Trojan for the position of president and director, effective December 3, 2012. Trojan will also become the chief executive officer (CEO) of the company replacing current president, director and CEO, Gerald W. Deitchle, who will bow out from the post of CEO effective February 1, 2013. However, Deitchle will continue to serve as the chairman of the company's board of directors.
The upcoming CEO, Trojan, has donned many important roles in his career. A number of leadership positions held at renowned organizations vouch for his expertise. Previously, he was the CEO at Guitar Center Holdings Inc. – a renowned retailer of music products – from November 2010. He joined Guitar Center as the president and chief operating officer as well as a director in October 2007.
Prior to that, Trojan held the post of CEO at House of Blues Entertainment Inc. – an operator of restaurant and music venues, concerts and media properties, from 1996 to 2006. Prior to his tenure at House of Blues, Trojan acted as the CEO of the California Pizza Kitchen restaurant chain for two years when it was owned by PepsiCo Inc. (NYSE: PEP), He also held a number of other positions within PepsiCo during his 1990–1996 term. Apart from these roles, he has been a board member in Domino's Pizza Inc. (NYSE: DPZ) since March 2010.
With his vast know-how in the restaurant and retail industry, we expect Trojan to provide meaningful support to BJ's Restaurants' aggressive expansion plan.
As a point of reference, former CEO, Deitchle has been the driving force behind increasing BJ's Restaurants' total revenues and cash flow (from operating activities) from a respective $129 million and $16 million in 2004 to an estimated $700 million and $100 million in 2012.
However, we remain cautious on the stock at the current level based on its third quarter top- and bottom- line miss as well as the decelerating growth in comps and margins. Hence, Trojan's new pursuit will be a bit challenging especially amid a sluggish business environment and an element of uncertainty lingers till we find some concrete evidence of better execution at the company.
BJ's Restaurants owns and operates 127 locations at the end of the third quarter. BJ's Restaurants currently carries a Zacks #5 Rank, implying a short-term Strong Sell rating on the stock. We are maintaining our long-term Neutral recommendation on the stock.
Union Bank Acquires Smartstreet
San Francisco-based Union Bank – a unit of UnionBanCal Corp. – closed the acquisition of Atlanta-based Smartstreet. Prior to the completion of the acquisition, Smartstreet was a financial services division of PNC Financial Services Group Inc. (NYSE: PNC). UnionBanCal Corp. is a fully owned subsidiary of Mitsubishi UFJ Financial Group, Inc. (NYSE: MTU), also known as MUFG.
The financial terms of the agreement were undisclosed. However, market rumors indicate the purchase price to be roughly $126 million. Smartstreet will retain its brand in the markets and work with its existing executive team, operating as a unit of Union Bank.
Smartstreet, a provider of banking services to homeowners associations and community association management companies worldwide, became a part of PNC Financial in March 2012, at the time of purchase of RBC Bank (USA).
This financial services division is also a leader in community associations banking services with deposit base worth $1 billion and provides services such as banking and account management, payment processing and lockbox services, association loans and lines of credit, credit card services as well as website hosting and designs.
Union Bank is a leader in providing banking services to homeowners' associations in the West Coast.
The completion of the transaction combines Smartstreet and Union Bank's banking services and would help serving the widespread client portfolio across the United States. The combined entity would ensure the offering of a wide and improved array of products, which will lead to industry-wide growth.
Further, Smartstreet's healthy base of core deposits will provide short term as well as long-term benefits to Union Bank. Smartstreet's extensive and well known Homeowner Association (HOA) banking franchise as well as the combined strengths of both of these companies in comprehensive receivables and national lockbox processing will also be advantageous.
Moreover, the acquisition of Smartstreet would brighten Union Bank's prospects of becoming the industry leader in providing banking services to management companies. We believe the acquisition will improve the revenues of Union Bank's Global Treasury Management unit as well.
MUFG retains a Zacks #3 Rank, which translates into a short-term Hold rating. Considering the fundamentals, we also maintain our long-term Neutral recommendation on the stock.
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