CHICAGO, April 4, 2011 /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: Starbucks Corp. (Nasdaq: SBUX), McDonald's Corp. (NYSE: MCD), Toyota Motor Corp. (NYSE: TM), Honda Motor Co. (NYSE: HMC) and Nissan Motor Co. (OTC: NSANY).
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Here are highlights from Friday's Analyst Blog:
U.S. Food Giants Tackle Price Rise
Starbucks Corp. (Nasdaq: SBUX), along with other food and drink retailers, are innovating ways to combat the rising prices of grains, meat, sugar and other essential ingredients. In times of such hardships the survival theory becomes quite applicable for the food chain industry in the US.
Managements of the giant food chains accept the fact that a desired level of productivity is to be achieved and the macroeconomic difficulties will segregate the players of the food retail industry in to a different group, ones that will survive the darker times.
Rising global demand for protein, government regulations for turning corn into ethanol, and speculative investors have pushed the prices of many food commodities in recent times. Food prices have also soared as consumers in emerging economies have more disposable income, and erratic climate conditions have hurt supplies.
At the same time, in the face of high unemployment, weak home values and restless consumers in the U.S., escalating prices looms over restaurants. The economic downturn and drop in consumer spending has sent a handful of restaurant chains – such as Uno Chicago Grill pizza, Fuddruckers and Charlie Brown's Steakhouse – into bankruptcy last year.
Starbucks wants to team up with other companies to buy milk, sugar and other essential food items. This will give the Seattle-based coffee giant a collective bargaining power for its raw materials.
With coffee prices forecast to rise in 2011, Starbucks has also purchased coffee for "a few months" in advance, according to a spokeswoman. In 2010, Starbucks' profits were up after the execution of a two-year plan to cut costs and close some locations.
Similarly, Darden Restaurants Inc., owner of the Red Lobster and Olive Garden chains, is moving to a system where it buys only what it knows it needs.(not clear) Texas Roadhouse Inc. locks in 80% of the beef prices for its 345 restaurants once a year and buys cuts of beef it expects to fall in price on the open market. The chain is also lining up backup vendors, instead of just buying commodities from one supplier, to get better prices.
Large companies like Starbucks and McDonald's Corp. (NYSE: MCD) , which have the capital to hedge effectively even if they don't always place the correct bets, are using commodity-price hedging to try to guard against massive swings.
Toyota Cautious, Raises Prices
Toyota Motor Corp. (NYSE: TM) revealed that the earthquake and tsunami in Japan on March 11 that killed more than 10,000 people, broke down infrastructure and triggered a nuclear crisis will hurt its earnings in the financial year that just started.
The catastrophe in Japan damaged many parts supplying companies' plants that manufacture key components for cars and trucks in the U.S. and other countries. As a result, Toyota remained uncertain about resuming its production.
Production resumed at only two of the 18 plants in Japan that build Toyota and Lexus cars. Those plants are assembling a limited number of three hybrid models at a reduced rate.
The automaker also declared that it hiked retail price in the range of 1.2%–2.2% for most Toyota, Scion and Lexus models of 2011 model year. However, Toyota did not alter the retail price of Toyota Tacoma compact pickup truck, Yaris sedan, Scion tC sports coupe, Scion xB urban utility vehicle, Lexus CT 200h hybrid premium compact of 2011 model year and the LFA supercar of 2012 model year.
The price increase for the models manufactured in North America will take effect on vehicles produced beginning in May. However, the same for vehicles (such as the 4Runner, Corolla, FJ Cruiser and Prius) built in Japan will take effect with scheduled May arrivals.
A couple of days back, Toyota asked its U.S. dealers to restrict orders for replacement parts from Japan. The automaker said it could not take orders for 233 parts for Lexus, Scion and Toyota models unless they are specifically required by a customer for repair.
Almost all the Japanese automakers, including Honda Motor Co. (NYSE: HMC) and Nissan Motor Co. (OTC: NSANY), are plagued by the natural disaster in the country. They have suspended and cut down their production in the wake of plant outages and parts supply shortage.
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