The Zacks Analyst Blog Highlights:Alcoa, Capital One Financial, Citigroup, Cape Bancorp and Banner

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Jul 09, 2013, 09:30 ET

CHICAGO, July 9, 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 Alcoa (NYSE:AA-Free Report), Capital One Financial Corp. (NYSE:COF-Free Report), Citigroup Inc. (NYSE:C-Free Report), Cape Bancorp, Inc. (Nasdaq:CBNJ-Free Report) and Banner Corporation (Nasdaq:BANR-Free Report).

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Here are highlights from Monday's Analyst Blog:

Alcoa Beats on the Top Line

Traditionally known as the kicker-offer of earnings season each quarter, Alcoa (NYSE:AA-Free Report) has begun to get investors' juices flowing after the bell when the American aluminum giant posted earnings of 7 cents per share on revenues of $5.85 billion in the quarter. The initial Dow component to report met EPS estimates while coming out ahead on the top-line; the Zacks consensus expected only $5767 million in the quarter ended June 30.

It was an interesting quarter to predict for analysts: one the one hand, aluminum prices had fallen 10% from March through June, which caused Alcoa to lower overall capacity at its facilities by 11%. On the other hand, manufacturing that includes aluminum-based products -- most importantly airplanes and autos -- saw demand grow in the quarter. Immediately after the earnings announcement, AA shares spiked up to trade at over $8 per share.

That said, the stock had been trading near multi-year lows for weeks, and hasn't been up over $10 per share in over a year. With a Zacks Industry Rank of 250 out of 265, metals firms like Alcoa have been taking it on the chin in recent times, as Alcoa investors I'm sure are quite aware.

Further, with strong downward bias among earnings estimate revisions over the past 60 days -- 8 of the 12 analysts covering Alcoa have downwardly revised for the quarter, with 10 downward revisions for the fiscal year over that time period and no upward revisions -- have saddled Alcoa with a Zacks Rank #4. However, our long-term recommendation as of Monday's closing bell was Neutral.

Capital One Upgraded to Strong Buy

On Jul 6, Zacks Investment Research upgraded Capital One Financial Corp. (NYSE:COF-Free Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Capital One has been witnessing rising earnings estimates following the announcement of a new share repurchase program, hike in dividend and better-than-expected first-quarter results. Moreover, this regional bank has a long-term earnings growth forecast of 8.0%.

On Jul 2, Capital One announced a share repurchase authorization of up to $1.0 billion, subsequent to the Federal Reserve's approval of its capital plan in Mar 2013. However, the company will be allowed to undertake the repurchase program after it successfully completes the sale of Best Buy Co.'s credit-card business to Citigroup Inc. (NYSE:C-Free Report). The company expects this deal to close in the third quarter of 2013.

Further, on May 2, Capital One hiked its quarterly dividend by 500% to $0.30, which was paid on May 23 to shareholders of record as on May 13. Moreover, in Apr 2013, the company's first-quarter 2013 earnings easily surpassed the Zacks Consensus Estimate, driven by a fall in operating expenses, partially offset by decline in revenues.

Moreover, during the last 60 days, the Zacks Consensus Estimate for 2013 increased by a penny to $6.57 per share. For 2014, the Zacks Consensus Estimate inched up 0.3% to $6.69 per share over the same time period.

Other Stocks to Consider

Other stocks in the banking sector that are worth a look include Cape Bancorp, Inc. (Nasdaq:CBNJ-Free Report) and Banner Corporation (Nasdaq:BANR-Free Report). Both these stocks carry a Zacks Rank #1.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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