The Zacks Analyst Blog Highlights: Ford Motor, Heartland Payment Systems, American Express, MasterCard and Global Payments

Nov 14, 2013, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, Nov. 14, 2013 /PRNewswire/ -- 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 Ford Motor Co. (NYSE: F-Free Report), Heartland Payment Systems, Inc. (NYSE: HPY-Free Report), American Express Company (NYSE: AXP-Free Report), MasterCard Inc. (NYSE: MA-Free Report) and Global Payments Inc. (NYSE: GPN-Free Report).


Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Wednesday's Analyst Blog:

Ford Raised to Outperform

On Nov 12, 2013, we raised Ford Motor Co. (NYSE: F-Free Report) to Outperform from Neutral. The upgrade was based on several factors including its global expansion plans, its efforts to make the European business profitable, the success of the One Ford plan and its continued focus on hybrid cars.

Reasons for Upgrade

Ford posted a 12.5% rise in earnings per share of 45 cents in the third quarter of 2013 from 40 cents in the same quarter of 2012 (all excluding special items). With this, this Zacks Rank #1 (Strong Buy) stock surpassed the Zacks Consensus Estimate of 38 cents.

Revenues in the quarter grew 12.2% to $36 billion, exceeding the Zacks Consensus Estimate of $33.8 billion. The improvement was attributable to increased wholesale volumes in automotive business and higher market share in all the regions.

Ford plans to restore profitability in its European operations by mid-decade and aims to achieve long-term operating margin between 6% and 8%. The efforts are yielding results as the company now expects a lower loss from Europe in 2013 in comparison to 2012.

Additionally, Ford is pursuing a major expansion plan in the mature and emerging markets, primarily Argentina, Brazil, China, India and Thailand. Moreover, the company is creating a new business unit – Ford Middle East and Africa, to capitalize on the growing importance of the Middle East and African markets.

Further, Ford's accelerated product transformation plan "One Ford" is positively impacting the company. Moreover, the automaker continues to focus on hybrid vehicles that played a pivotal role in its revival since late 2006. The company announced its plan to invest $135 million to develop key components, including advanced battery systems, for its next-generation hybrid-electric vehicles.

As a result of these favorable factors, we have a positive outlook on Ford, despite rising expenditure and debt.

Heartland Partners American Express

One of the leading payment processing companies, Heartland Payment Systems, Inc. (NYSE: HPY-Free Report), has inked a deal with the merchant financing operations of American Express Company (NYSE: AXP-Free Report) – American Express Merchant Financing. This deal will make Heartland the first processor to distribute American Express Merchant Financing.

As per the deal, Heartland's clients will receive highly price-competitive loans based on their annual card processing volume. American Express Merchant Financing will let these clients access an amount of up to $0.75 million. Thus, more and more small businesses will be able to support their growth requirements. Also, the deal permits Heartland's clients to renew their loans 12 months after the initial disbursement.  

Since the recent recession, small businesses have been struggling to obtain loans to support their operations. Although these companies are willing to incur expenses for enhancing their operations and attracting more customers, most do not have the necessary finance required to achieve this goal. Moreover, funds are not as easily available to small companies as they are to larger enterprises.

American Express' Merchant Financing, being a specialist in providing funds for short-term investments, can aid these small businesses as it offers loans that can be paid back over a period of one year. Through its association with American Express, Heartland intends to give its clients access to competitive loans and drive growth going forward.

Heartland has been focused on providing solutions to enhance operating leverage and improve the profitability of its clients. We believe the above agreement is on par with this strategy of Heartland. The tie-up with American Express should help the payment processor retain its existing client base and maintain its growth momentum in coming quarters.   

Heartland currently carries a Zacks Rank #3 (Hold). Among other financial transaction service providers, MasterCard Inc. (NYSE: MA-Free Report) and Global Payments Inc. (NYSE: GPN-Free Report) carry a Zacks Rank #2 (Buy). American Express also holds a Zacks Rank #2 (Buy).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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