CHICAGO, Jan. 30, 2014 /PRNewswire/ -- Zacks Equity Research highlights GATX Corporation (NYSE: GMT-Free Report) as the Bull of the Day and Boingo Wireless (Nasdaq: WIFI-Free Report)as the Bear of the Day. In addition, Zacks Equity Research provides analysis onAbercrombie & Fitch Co. (NYSE: ANF-Free Report), PepsiCo Inc. (NYSE: PEP-Free Report) and Zale Corp. (NYSE: ZLC-Free Report).
Here is a synopsis of all five stocks:
This motivated analysts to revise their estimates much higher for both 2014 and 2015, sending the stock to a Zacks Rank #1 (Strong Buy).
Shares of GATX soared following the Q4 report, but the valuation picture still looks very reasonable at 15x forward earnings.
GATX Corporation is a railcar leasing company. It is headquartered in Chicago and was founded in 1898.
GATX delivered strong fourth quarter results on January 23. Earnings per share came in at $1.14, crushing the Zacks Consensus Estimate of $0.93. It more than doubled EPS in the same quarter last year.
Revenue rose 8% to $356.6 million, ahead of the consensus of $348.0 million. This was driven by 8% revenue growth in the 'Rail America' segment and 14% growth in the 'Rail International' segment. Utilization rates improved in both divisions too.
Meanwhile, total segment profit surged 66% as the company leveraged its fixed expenses.
Earnings estimates have been falling for Boingo Wireless (Nasdaq: WIFI-Free Report) after the company reported its third quarter results back in November. The Zacks Consensus Estimate for both 2013 and 2014 have dropped significantly, sending it to a Zacks Rank #5 (Strong Sell).
While shares of Boingo Wireless have sold off a bit since the Q3 report, the stock still does not look cheap on a forward P/E basis. Investors should consider avoiding the stock until its earnings momentum improves.
Boingo Wireless provides individuals with access to the mobile Internet through high-speed, high-bandwidth Wi-Fi networks. It has more than 700,000 Wi-Fi locations, or hotspots, in over 100 countries at places like airports, hotels, coffee shops, shopping malls, arenas, stadiums and fast food restaurants.
Boingo Wireless reported third quarter financial results back on November 7. Earnings per share came in at 1 cent, missing the Zacks Consensus Estimate of 2 cents. This was down from EPS of 7 cents in the same quarter in 2012.
Revenue increased 10% to $28.6 million, which was a bit below the consensus of $29.0 million. Despite decent revenue growth, expenses grew at a faster clip, thus hurting profitability. 'Network Access' and 'Network Operations' costs, for instance, each spiked 22%, while 'Selling & Marketing' expenses jumped 28%.
Operating income plunged 81% to $784,000. After subtracting taxes and earnings attributable to non-controlling interests, Boingo made just $354,000 in the quarter, down from $2,777,000 in the same quarter last year. Year-to-date, the company has lost $1,166,000.
Abercrombie Opts for Big Changes
Announcing a major change in its corporate governance, Ohio-based teen apparel retailer Abercrombie & Fitch Co. (NYSE: ANF-Free Report) yesterday relieved its present Chairperson and Chief Executive Officer (CEO), Mike Jefferies, from his duties as Chairman. The move is a result of continued pressure from activist investor, Engaged Capital LLC, to reduce Jefferies' hold on the company.
After joining Abercrombie & Fitch in 1992, Jefferies went on to make the company a trendy premium brand for teenagers from merely a sports brand. However, he failed to adapt it to the changing retail environment, which consequently led the company to lose its market share to other teen retailers like Forever 21 and Inditex's Zara.
Jefferies has also faced criticism over his comments on the type of customers that the company is keen on attracting as it does not provide merchandise for plus size people. Investors also voiced their concern regarding his strategies, which were focused primarily on slashing costs rather than improving the top line.
The company has appointed Arthur C. Martinez, former board member of PepsiCo Inc. (NYSE: PEP-Free Report), as Non-Executive Chairman. Martinez possesses considerable experience in the field, having worked with companies like Sears, Roebuck and Co., American International Group Inc., IAC/Interactive Corp., Fifth & Pacific Companies Inc. (formerly Liz Claiborne), International Flavors & Fragrances Inc. and HSN Inc.
Apart from this, management has appointed two other members to its board, thereby increasing the strength to 12. The additional members are Terry Burman and Charles R. Perrin.
Currently, Mr. Burman is the Chairman of Zale Corp. (NYSE: ZLC-Free Report) and has commendable expertise in the retail industry. Earlier, he was appointed to the boards of Barry's Jewelers Inc., Caesars World Inc., Unimax Corporation and Yankee Candle Co. He has also served as the CEO of Signet Jewelers Ltd.
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
About the Analyst Blog
Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.
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 analyst 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. Click here to subscribe to this free newsletter today.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; 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.
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
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
SOURCE Zacks Investment Research, Inc.