The Zacks Analyst Blog Highlights: Omnicom Group, Publicis Groupe, Clear Channel Outdoor Holdings, Harte-Hanks and Amgen
CHICAGO, July 30, 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 Omnicom Group Inc. (NYSE:OMC-Free Report), Publicis Groupe SA (OTC:PUBGY-Free Report), Clear Channel Outdoor Holdings Inc (NYSE:CCO-Free Report), Harte-Hanks Inc. (NYSE:HHS-Free Report) and Amgen Inc. (Nasdaq:AMGN-Free Report).
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Here are highlights from Monday's Analyst Blog:
Omnicom-Publicis Merger: #1 Ad Firm?
Omnicom Group Inc. (NYSE:OMC-Free Report) and Publicis Groupe SA (OTC:PUBGY-Free Report) have signed a definitive agreement to merge together to create Publicis Omnicom Group – arguably the world's biggest communications, advertising, marketing and digital services company. With combined 2012 revenues of $22.7 billion and an equity market capitalization of approximately $35.1 billion, the transaction is a merger of equals and is expected to close in the fourth quarter of 2013 or the first quarter of 2014.
Every shareholder of both the companies will hold about 50% of Publicis Omnicom Group's equity. Publicis Groupe shareholders will receive one newly-issued share of the agency for each Pubicis share they own with a special dividend of €1.00 per share. Omnicom shareholders will get 0.813 newly-issued shares with a special dividend of $2 per share.
This merger brings together iconic agency brands that will offer clients the industry's leading talent across geographies. With over 130,000 employees, the new group will be well positioned to serve clients and help them better to build their brands and grow their businesses.
The communication and marketing landscape has been through a roller-coaster ride in the past and this merger is likely to reopen new avenues for growth and success for the individual companies. This merger will enable the agencies to make best use of their skilled workforce, diverse product offerings, and enhanced global footprint to leverage a list of global and local clients and reap synergistic benefits. The combined agency is expected to generate efficiencies of $500 million in future. Maurice Lévy and John Wren, the CEOs of Publicis Groupe and Omnicom, respectively, will be the co-CEOs for the new entity for an initial period of 30 months, following which Lévy will become non-executive Chairman and Wren will continue as the CEO.
Omnicom is one of the largest advertising, marketing and corporate communications companies in the world. Omnicom has a strong track record of winning new clients and receiving additional deals from the existing ones. The company's business mix is well-diversified geographically and benefits largely from the growing markets. In addition, the company's efforts in maintaining controlled expenses and strong global reputation are commendable.
Omnicom currently has a Zacks Rank #3 (Hold). Other stocks that look promising and are worth a look are Clear Channel Outdoor Holdings Inc (NYSE:CCO-Free Report) and Harte-Hanks Inc. (NYSE:HHS-Free Report), both carrying a Zacks Rank #2 (Buy).
Will Amgen (AMGN) Beat Earnings Estimates?
Amgen Inc. (Nasdaq:AMGN-Free Report) is scheduled to report its second quarter 2013 earnings after the closing bell on Jul 30, 2013.
Last quarter, Amgen delivered a positive earnings surprise of 11.43%. We expect the trend to continue in the second quarter.
Why a Likely Positive Surprise?
Positive Zacks ESP: The Expected Surprise Prediction or ESP (Read: Zacks ESP: A Better Way to Find Earnings Surprises), which represents the difference between the Most Accurate estimate of $1.74 and the Zacks Consensus Estimate of $1.71, is +1.75%. This is a meaningful and leading indicator of a likely positive earnings surprise for the shares.
Zacks Rank #2 (Buy): Note that stocks with a Zacks Rank #1, 2 and 3 have a significantly higher chance of beating earnings estimates. We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
The combination of Amgen' Zacks Rank #2 and an ESP of +1.75% makes us confident of an earnings beat on Jul 30.
What is Driving the Better-than-Expected Earnings?
This biotech company has delivered positive earnings surprises in three of the last four quarters with an average beat of 11.49%. Key growth drivers at Amgen include Enbrel, Xgeva and Prolia. Continued improvement in the performance of key products should drive results.
Moreover, the company's move to launch new manufacturing technologies along with its efforts to develop the pipeline is also encouraging.
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