The Zacks Analyst Blog Highlights:Coca-Cola, McDonald's, Yum Brands, PepsiCo and Jones Lang LaSalle

Nov 11, 2013, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, Nov. 11, 2013 /PRNewswire/ -- 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 Coca-Cola Company (NYSE: KO-Free Report), McDonald's Corp (NYSE: MCD-Free Report), Yum Brands Inc. (NYSE: YUM-Free Report), PepsiCo Inc. (NYSE: PEP-Free Report) and Jones Lang LaSalle Inc. (NYSE: JLL-Free Report).


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

Here are highlights from Friday's Analyst Blog:

Coke to Invest $4B in China

As reported to Bloomberg, beverage maker The Coca-Cola Company (NYSE: KO-Free Report) has plans to invest more than $4 billion in China from 2015 to 2017 to combat the rising competition in the soft drinks market. The company has also introduced new products and intends to build new plants to meet the growing demand of Chinese consumers.

The cola giant is ramping up its investment in China as the company and its bottlers seek to double global revenues to $200 billion in 10 years ending 2020. This investment of $4 billion is in addition to the previous investment plan of $4 billion for China for the year 2012-2014.

Coca-Cola is also interested in acquisition deals in China and may add healthier drinks in its portfolio such as juice making companies or plant-protein drinks like almond milk. Chinese consumers are increasingly opting for healthier alternatives in food and drink, which has also attracted fast food chains such as McDonald's Corp (NYSE: MCD-Free Report) and KFC-parent Yum Brands Inc. (NYSE: YUM-Free Report).

Coca-Cola believes that the beverage market in China is still untapped and therefore has wide scope for expansion. Henceforth, Coca-Cola plans to open two facilities each year in China over the next decade. We note that the beverage industry is very competitive and sales are typically driven by promotions.

The company faces intense competition from another beverage giant PepsiCo Inc. (NYSE: PEP-Free Report). PepsiCo is also seeking to expand in the most populated nation. PepsiCo has collaborated with Tingyi Cayman Islands Holding Corp. and opened new factories and expanded its distribution network in China.

Coca-Cola still leads the soft drinks market in China and holds a 16% market share by total volume in 2012, according to data from market research firm Euromonitor. Though volumes have been declining in China for the past few quarters due to an economic slowdown, the company continues to be confident about the long-term prospects in this region. Coca-Cola holds a Zacks Rank #3 (Hold).

Jones Lang LaSalle Upgraded to Neutral

On Nov 7, 2013, we upgraded our long-term recommendation on Jones Lang LaSalle Inc. (NYSE: JLL-Free Report) to Neutral from Underperform following its strong results in third-quarter 2013 and improving market fundamentals.

Why the Upgrade?

After a disappointing performance in the prior quarter, Jones Lang's third-quarter 2013 adjusted earnings per share came in at $1.49, substantially ahead of the Zacks Consensus Estimate of $1.35 per share. It also came 21% above the year-ago quarter earnings of $1.23 per share.Quarterly results benefited from decent growth in fee revenues, driven by Capital Markets & Hotels and Property & Facility Management as well as strong leasing performance.

Jones Lang acquired a Houston-based property management company - Means Knaus Partners (MKP) in the third quarter to enhance its office property management capacities. Moreover, the company acquired the Kansas City-area commercial real estate firm Capital Realty. The acquisitions augur well for the company's long-term growth.

The company has also renewed and increased the capacity of its long-term credit facility of more favorable pricing. We believe that its increased credit facility along with a solid balance sheet provides the company the wherewithal to carry on investing in growth drivers going forward.

However, structural and political issues have prevented a strong upturn in the U.S. and led to inconsistent and slow paced development of certain Asian markets, such as China and India. Moreover, continuation of the slowdown in Brazil is a plausible concern for the stock. Also, Jones Lang faces stiff competition from international, regional, and local players in the market.

For Jones Lang, over the last 7 days, the Zacks Consensus Estimates for both 2013 and 2014 moved north. It climbed 0.8% to $6.04 per share for 2013 and 0.3% to $6.99 per share for 2014. Hence, the stock currently carries a Zacks Rank #2 (Buy).

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

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