The Zacks Analyst Blog Highlights: Best Buy, Gap, L Brands, Lions Gate Entertainment and Southwest Airlines
CHICAGO, May 21, 2014 /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 the Best Buy Co., Inc. (NYSE:BBY-Free Report), Gap, Inc. (NYSE:GPS-Free Report), L Brands, Inc. (NYSE:LB-Free Report), Lions Gate Entertainment Corp. (NYSE:LGF-Free Report) and Southwest Airlines Co. (NYSE:LUV-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Tuesday's Analyst Blog:
Will Best Buy (BBY) Keep the Earnings Streak Alive?
We expect consumer electronics giant The Best Buy Co., Inc. (NYSE:BBY-Free Report) to beat expectations when it reports first quarter fiscal 2015 results scheduled for release on May 22, 2014.
Why a Likely Positive Surprise?
Our proven model shows that Best Buy may beat earnings because it has the right combination of two key components.
Positive Zacks ESP: Best Buy currently has an Earnings ESP of +10.53%. This is because the Most Accurate estimate stands at 21 cents per share, while the Zacks Consensus Estimate is pegged at 19 cents.
Zacks #3 Rank (Hold): Note that stocks with a Zacks Rank #1, 2 and 3 have a higher chance of beating earnings. The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
The combination of Best Buy's Zacks Rank #3 and Earnings ESP of +10.53% makes us confident of a positive earnings beat on May 22.
What is Driving Better-than-Expected Earnings?
Best Buy is a leading player in the consumer electronics arena. With changing customer preferences, the company is constantly improving its online portal to increase sales. The success of these efforts is evident from the sturdy online sales — a key highlight of its performance. Best Buy continues to focus on developing its e-commerce/omni-channel capabilities going forward.
Moreover, in order to gain additional revenue, the company has partnered with vendors to increase the number of stores under the profitable "store-within-a-store" strategy. To rein in escalating costs, the company has reinforced a powerful turnaround strategy called the "Renew Blue" program.
Best Buy has a trailing four-quarter average positive surprise of 70.3%. In the last concluded quarter, the company outdid the Zacks Consensus Estimate by 22.8%.
Other Stocks to Consider
Best Buy is not the only firm looking up this earnings season. The following companies are also likely to beat earnings in the to-be-reported quarter
The Gap, Inc. (NYSE:GPS-Free Report) with an Earnings ESP of +1.79% holds a Zacks Rank #3
L Brands, Inc. (NYSE:LB-Free Report) has an Earnings ESP of +1.96% and a Zacks Rank #3.
Lions Gate Entertainment Corp. (NYSE:LGF-Free Report) has an Earnings ESP of +7.69% and a Zacks Rank #3.
Southwest Airlines to Expand Operations
Leading U.S. passenger carrier Southwest Airlines Co. (NYSE:LUV-Free Report) announced its plans to extend its international destinations besides adding some new non-stop flights from Dallas Love Field, where flight limitations will finally be lifted in Oct 2014.
Southwest Airlines will add flights to Mexico City from San Antonio, Texas and Santa Ana, CA, while flights to Punta Cana will be connected with Atlanta and Washington D.C. from Nov 2, 2014. Southwest Airlines will replace AirTran service in these destinations, bringing its total number of destinations to 90 in five different countries across North America and the Caribbean. Notably, AirTran will be fully integrated with Southwest Airlines by the end of this year.
In Feb 2014, Southwest Airlines planned to start operating non-stop flights from Dallas to Baltimore, Las Vegas, Denver, Orlando and Florida from Oct 13. Effective from the same date, the carrier will also extend its reach to Chicago and Reagan National Airport (DCA). Starting Nov 2, non-stop services from Dallas will be extended to some more cities, which include popular destinations like Atlanta, New York, Los Angeles and Tampa Bay, among others.
Back in 1979, flight restrictions were imposed on Dallas Love Field under the Wright Amendment– a federal law aimed at supporting the city's other airport – Fort Worth International Airport.
Southwest Airlines has also announced its plans to extend operations from DCA, where the carrier recently won bids for 27 pairs of slots.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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