The Zacks Analyst Blog Highlights: Alcoa, American Express, Bank of America, Delta Air Lines and JetBlue Airways

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Oct 11, 2011, 09:30 ET

CHICAGO, Oct. 11, 2011 /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: Alcoa Inc. (NYSE: AA), American Express Company (NYSE: AXP), Bank of America Corporation (NYSE: BAC), Delta Air Lines Inc. (NYSE: DAL) and JetBlue Airways Corporation (Nasdaq: JBLU).

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Here are highlights from Monday's Analyst Blog:

Earnings Preview: Alcoa

The largest U.S. aluminum producer, Alcoa Inc. (NYSE: AA) announced that it would release its results for the third quarter of 2011 after the market closes on October 11, 2011.

Alcoa had kicked off the second quarter earnings season with an EPS of 32 cents and missing the Zacks Consensus Estimate of 34 cents.

With respect to earnings surprises, the company outdid the Zacks Consensus Estimate in the trailing three quarters and was behind the Zacks Consensus Estimate in the second quarter of 2011. This is reflected in the average earnings surprise of 14.59%, with positive surprises in three quarters and negative in one.

Our Take

Alcoa Inc., a Pennsylvania-based corporation, is among the world's leading producers of primary and fabricated aluminum and alumina. It involves the technology of mining, refining, smelting, fabricating and recycling of aluminum. We believe that Alcoa's cost reduction efforts are to some extent, offsetting the negative impact of higher energy and raw material costs on profitability.

Alcoa expects aluminum to remain in great demand for the rest of 2011, due to the metal's unique properties of lightness, strength and reusability. Alcoa reaffirmed its forecast of a 12% growth in global aluminum demand in 2011.

Looking ahead, Alcoa projects continued growth in all major end-markets across the globe, including aerospace (7%), automotive (4-8%), commercial transportation (7-12%), packaging (2-3%), building and construction (1-3%), and industrial gas turbines (5-10%).

For the year, Alcoa projects aluminum demand to grow 12% on top of the 13% growth witnessed in 2010. Alcoa projects that from the 2010 baseline, aluminum demand would double by 2020 on a 6.5% annual growth.

Currently, Alcoa has a short-term (1 to 3 months) Zacks #3 Hold rating and a long-term (6 months) Neutral recommendation.

AmEx Announces Bond Issue

Last week, American Express Company (NYSE: AXP) announced the issue of bonds worth $1.15 billion. The terms of the deal have not been disclosed yet. However, the bonds will be backed by credit card receivables.

AmEx's debt issue backed by card payments has been declining steadily over the years. As per Bloomberg, the company issued debts worth only $7billion so far this year, down from $8 billion in the previous year and $47 billion in 2009.

Moreover, as per Bank of America Corporation's (NYSE: BAC) index, the highest ranking payment-backed debt, currently yields 0.75% over the Treasury yield.

In other news, AmEx has also declared that Virgin America has been added to its Membership Rewards program. This means that AmEx cardholders will now be able to convert their Membership Rewards points to the airline's frequent flier program, Elevate, which allows members to redeem their points for unsold seats in any Virgin America flight.

Virgin America is the 17th airline to be added to AmEx's Membership Rewards program, which includes Air Canada, Delta Air Lines Inc. (NYSE: DAL) and JetBlue Airways Corporation (Nasdaq: JBLU).

As per the agreement, 200 points of AmEx's Membership Rewards program can be converted into 100 points of the Elevate program.

Additionally, the new partners have started a promotional offer on Facebook, which provides AmEx cardholders a chance to win various prizes, including free round trip tickets on Virgin America.

Currently, AmEx carries a Zacks #3 Rank, which translates into a short-term Hold rating. On Friday, the shares of the company closed at $43.43, down 2.25%, on the New York Stock Exchange.

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