The Zacks Analyst Blog Highlights: Tesla Motors, Fox Factory Holding, Standard Motor Products, Douglas Dynamics and JPMorgan Chase
CHICAGO, July 7, 2014 /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 the Tesla Motors, Inc. (Nasdaq:TSLA-Free Report), Fox Factory Holding Corp (Nasdaq:FOXF-Free Report), Standard Motor Products Inc. (NYSE:SMP-Free Report), Douglas Dynamics, Inc. (NYSE:PLOW-Free Report) and JPMorgan Chase & Co. (NYSE:JPM-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Thursday's Analyst Blog:
Tesla Dragged Down by Expenses, Losses
On Jul 2, 2014, we issued an updated research report on Tesla Motors, Inc. (Nasdaq:TSLA-Free Report). The electric carmaker remains a loss-making company despite increasing sales. In the first quarter of 2014, it reported adjusted loss (including stock-based compensation expenses) of 14 cents per share, deteriorating from break-even results recorded in the year-ago quarter. This resulted in a 60% negative earnings surprise in the quarter.
Notably, the company is facing supply chain problems, which are restricting its ability to increase production. Other factors affecting the company's results are high research and development (R&D) and selling, general and administrative (SG&A) expenses, as it is investing significantly to develop the Model X and expand its supercharger network. Tesla is also facing opposition to its direct-selling model in some U.S. states, which might lower sales volumes.
Tesla's limited market share, small operating scale compared to other automakers, focus on a niche product segment and uncertainty related to demand in the long term also resulted in a "B-" credit rating from Standard & Poor's Ratings Services (S&P) in May 2014. The rating falls in the junk category.
Nevertheless, Tesla has acquired substantial market share in the electric car market. Moreover, to boost sales, the automaker is actively undertaking international expansion, particularly in Europe and China. To deal with the shortage of lithium-ion batteries, Tesla is building a Gigafactory to produce the batteries in collaboration with various partners.
The Zacks Consensus Estimate for Tesla's 2014 earnings is currently 8 cents per share, which translates into a negative year-over-year growth rate of 52.9%. The company carries a Zacks Rank #5 (Strong Sell).
Key Picks from the Sector
Other stocks worth considering in the same industry include Fox Factory Holding Corp (Nasdaq:FOXF-Free Report), Standard Motor Products Inc. (NYSE:SMP-Free Report) and Douglas Dynamics, Inc. (NYSE:PLOW-Free Report). Fox Factory sports a Zacks Rank #1 (Strong Buy), while Standard Motors and Douglas Dynamics have a Zacks Rank #2 (Buy).
Is Jamie Dimon's Diagnosis a Concern?
JPMorgan Chase & Co. (NYSE:JPM-Free Report) CEO Jamie Dimon has been diagnosed with throat cancer. The condition is curable, with radiation and chemotherapy commencing soon at New York's Memorial Sloan Kettering Hospital.
Notably, the treatment would likely take around eight weeks. For this period, Dimon will continue to run JPMorgan's operations as usual. However, his travel plans will have to be curtailed.
Following the news on Jul 2, shares of JPMorgan declined nearly 1.4% on Wednesday. Although the news release does not convey anything unsettling, the serious health issues of the successful CEO made investors skeptical.
Moreover, the health scare has rekindled interest in JPMorgan's succession plan. Despite already having succession plans in place, the news has again initiated a debate about a single person playing a dual role of Chairman and CEO.
Dimon has been at the helm of JPMorgan since 2006, steering the company successfully through the financial crisis. Further, in spite of the company facing endless litigations and probes, the CEO was able to run it profitably.
Consequently, Dimon was rewarded for his work. In 2013, his compensation was raised nearly 74% from the prior year to $20 million. (Read More: Is Pay Hike for JPMorgan CEO Justified?)
Nevertheless, with JPMorgan still facing continued fundamental headwinds from the overall adverse macroeconomic conditions, and probes and lawsuits, we believe this news will slightly add to its woes.
Currently, JPMorgan carries a Zacks Rank #4 (Sell).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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