The Zacks Analyst Blog Highlights: Ford, Toyota, Honda, Nissan and R.R. Donnelley & Sons

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Sep 12, 2012, 09:35 ET

CHICAGO, Sept. 12, 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: Ford Motor Co. (F), Toyota Motor Corporation's (TM), Honda Motor Co.'s (HMC) and Nissan Motor Co.'s (NSANY) and R.R. Donnelley & Sons Co (RRD).

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Here are highlights from the Analyst Blog:

Ford to Increase Workforce

Ford Motor Co. (F) is increasing its workforce at the Flat Rock Assembly plant by adding roughly 1200 workers, according to sources. The new employees will be engaged in the production of the 2013 Fusion sedan at the Detroit-area plant.

Ford expects to attract more buyers with the upcoming 2013 Fusion midsize sedan and the newly launched Escape crossover. In addition, growth in the midsize car segment will further benefit the company.

Fusion, featuring a sharp, chisel design ensures fuel efficiency and is one of the best selling vehicles along with Toyota Motor Corporation's (TM) Toyota Camry, Honda Motor Co.'s (HMC) Accord and Nissan Motor Co.'s (NSANY) Nissan Altima.

Fusion was initially produced only in Mexico. However, the company decided to shift some production to the U.S. after the labor contracts (passed in 2007 and 2011) reduced its costs in the country.

Ford plans to enlarge its workforce at Flat Rock Assembly plant from the next year. The company will be employing some new workers. In addition, the workers who were laid off in other plants will also form a part of the workforce. Ford also plans to invest $555 million for new equipment at the plant, which will be used for producing Fusion.

Currently, the Flat Rock plant, which is jointly owned by Ford and Mazda Motor Corp., produces Ford Mustang, providing job to roughly 1,700 workers. However, Mazda has shifted the production of its Mazda 6 midsize car to Japan.

Ford and other automakers are hiring people at a rapid pace to meet the rising demand in U.S. It is anticipated that sales in U.S. will grow by 12% to 14.3 million in 2012.

Michigan-based Ford is one of the largest automobile producers worldwide. The company is divided into two segments: Automotive and Financial services. Although the U.S. is Ford's primary selling ground, Europe, South America, and the Asia-Pacific constitute its other major markets.

Currently, Ford retains a Zacks #3 Rank, which translates into a short-term (1 to 3 months) Hold rating.

Donnelley Buy Boosts Logistics

R.R. Donnelley & Sons Co (RRD) has acquired privately-held outbound mailing services provider Express Postal Options International. The financial terms of the deal were not announced.

The acquisition of Express Postal Options International or XPO will not only strengthen Donnelley's logistics business segment but also expand its operations in more than 150 countries.

The California-based XPO has a strong global logistics network. XPO's customers include companies from various sectors such as pharmaceutical, e-commerce, financial services and information technology to name a few. Leveraging XPO's strong logistics network Donnelley will now be able to provide better and more efficient service to its customers.

Donnelley has been experiencing strong growth in the logistics segment. In the last concluded quarter, this segment reported an 11.3% jump in revenue. Strong growth in the logistics space along with volume increase in certain office products restricted the decline in revenues to 3.6% on a year-over-year basis.

The company's logistics division has made it possible for its customers to deliver finished goods in a cost effective way. Moreover, the company has taken significant initiatives to expand its third-party logistics business, which will further gain from the XPO acquisition.

Donnelley is focusing on acquisitions to expand and enhance its offering to its current customers, as well as to expand the customer base. The company's continued focus on acquisitions will also spur its already dominant market position and drive long-term growth.

However, we expect Donnelley to remain under pressure due to weak macroeconomic conditions prevailing in most of its current as well as prospective markets. Higher pension expenses, continuing pricing pressure, volatility in raw material prices and a highly leveraged balance sheet are other headwinds going forward.

Additionally, publishers are increasingly coming out with digital versions of books and sophisticated e-book readers. Thus, the interest in commercially printed paperbacks and hard covers is waning.

We remain Neutral over the long term. Currently, Donnelley has a Zacks #2 Rank, which implies a Buy rating in the short term.

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