The Zacks Analyst Blog Highlights: Marsh & McLennan, SIRIUS XM Radio, Ford Motor, Apple and Google
CHICAGO, June 25, 2013 /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 Marsh & McLennan Cos. (NYSE:MMC-Free Report), SIRIUS XM Radio Inc. (Nasdaq:SIRI-Free Report), Ford Motor Co. (NYSE:F-Free Report), Apple Inc. (Nasdaq:AAPL-Free Report) and Google Inc. (Nasdaq:GOOG-Free Report).
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Here are highlights from Monday's Analyst Blog:
S&P Positive on Marsh & McLennan
Marsh & McLennan Cos. (NYSE:MMC-Free Report) witnessed an outlook upgrade from Standard & Poor's Ratings Services (S&P), which reflected the company's steady operating growth and strong risk profile. However, the long-term credit rating remained at "BBB-."
Accordingly, S&P lifted its outlook on Marsh & McLennan to 'positive' from 'stable' based on its improved operating leverage that is projected to accelerate in 2014 and beyond. The strategy of expansion through acquisitions and diversified product portfolio is also bearing fruit, while improving the client base. Alongside, a strong capital and cash flow position boosts liquidity and financial flexibility, thereby eliminating any significant risk on financial leverage.
Marsh & McLennan's consistent efforts to tap cross-selling opportunities, maintain cost discipline and improve pricing initiatives have enhanced new business production and retention rates in both the broking and consulting businesses. Consequently, the company has been enjoying a dominant market position, gaining strong competitive edge in the peer group.
On this growth curve, S&P believes that the company is modestly attuned to achieve organic growth of low- to mid-single digit for 2013 and EBITDA margins of around 20%, excluding any litigation or restructuring charges, in both 2013 and 2014.
Previously in 2010, S&P had lowered its outlook on Marsh & McLennan to 'negative' from 'stable' based on its $500 million litigation settlement, which was raised back to stable in Nov 2011. However, these past three years, the company has shown a steady and modest improvement in its organic and inorganic growth, thereby sailing through the recent economic turmoil fairly well.
While sluggish macro-economic factors and antitrust litigation charges could act as growth dampeners, S&P believes that Marsh & McLennan has a strong potential to outperform its peers in the future, banking on its size, diverse product offering, global presence and technical expertise.
Sirius XM's Sync AppLink for Ford
In an effort to enhance its services, SIRIUS XM Radio Inc. (Nasdaq:SIRI-Free Report) is offering the new Sync AppLink technology for Ford Motor Co.'s (NYSE:F-Free Report) vehicles. The technology will allow users to use voice commands to listen to their favorite channels while driving.
The new software is also available on Apple Inc.'s (Nasdaq:AAPL-Free Report) devices and Google Inc.'s (Nasdaq:GOOG-Free Report) Android-based handsets. Hence, customers can access SIRIUS XM programs from these devices without even turning on the satellite radio hardware.
Customers buying the new Ford vehicles will get six months of free subscription to SIRIUS XM's On Demand and MySXM services. Ford Motors will be the first to use the new service.
SIRIUS XM declared mixed financial results for the first quarter of 2013. The company's bottom line was in line with the Zacks Consensus Estimate, while the top line failed to meet the same.
During the quarter, the company added 452,890 (up 11.9% year over year) net subscribers, which raised the company's total subscriber base to 24,353,226. The company also estimates 1.4 million net subscriber additions in fiscal 2013.
Hence, we believe that such value-added services coupled with increasing channel line-ups will not only drive subscriber growth but will also help the company to counter competition from other media players like Pioneer System and Pandora Media, Inc.
However, mounting debt, higher programming cost and sluggish economic growth will continue to act as headwinds for SIRIUS XM going forward.
Based in New York, SIRIUS XM provides satellite radio services in the U.S. and Canada.
Currently, SIRIUS XM has a Zacks Rank #3 (Hold).
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