The Zacks Analyst Blog Highlights:Ford Motor, General Motors, Tesla Motors, Dongfeng Motor Group and Mattel

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Jan 30, 2014, 09:30 ET

CHICAGO, Jan. 30, 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 Ford Motor Co. (NYSE:F-Free Report), General Motors (NYSE:GM-Free Report), Tesla Motors, Inc. (Nasdaq:TSLA-Free Report), Dongfeng Motor Group Company Ltd (OTC:DNFGY-Free Report) and Mattel Inc. (Nasdaq:MAT-Free Report).

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Here are highlights from Wednesday's Analyst Blog:

11-Week Downtime at Ford Michigan Plant

Ford Motor Co. (NYSE:F-Free Report) announced the temporary closure of a factory in Dearborn, Michigan. The plant manufactures F-150 trucks and will remain shut for 11 weeks. The automaker intends to make alterations in the plant to produce F-150 trucks using aluminum instead of steel.

Another Ford factory based in Claycomo, Mo. manufactures F-150 trucks and will be closed for two weeks in 2014 for the upgrade. It will again be shut in 2015 for further renovations.

Moreover, Ford will be providing discounts on the remaining 2014 F-150 in order to clear dealer stock. Owing to the plant closure and discounts on the remaining vehicles Ford expects pre-tax profit, excluding special items, in a range of $7 billion to $8 billion in 2014. However, Ford has increased the production of F-series vehicles to create ample inventory level before the plant closure.

Ford recently launched the aluminum version of Ford F-150, which is believed to possess improved power, capability, efficiency and durability. It will hit the market in the latter part of this year and will offer five primary trims, including XL, XLT, Lariat, Platinum and King Ranch.

The new Ford F-150 has been launched under the One Ford plan, which focuses on producing vehicles that ensure quality, fuel efficiency, safety, smart design and value to customers.

The new F-150 truck is manufactured using high-strength aluminum alloys which reduce the vehicle's weight by 700 pounds. The light weight results in improved speed and fuel efficiency. Aluminum alloys are fast replacing steel, the widely used metal in the auto industry.

Not only Ford, General Motors (NYSE:GM-Free Report) also closed three factories producing pickup trucks for five, seven and nine weeks, respectively, as per Motor Trend magazine. The shutdown was made for renovations required to produce the redesigned 2014 Chevrolet Silverado and GMC Sierra.

Ford currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked automobile stocks worth considering are Tesla Motors, Inc. (Nasdaq:TSLA-Free Report) and Dongfeng Motor Group Company Ltd (OTC:DNFGY-Free Report). Tesla carries a Zacks Rank #1 (Strong Buy) while Dongfeng Motor is a Zacks Rank #2 (Buy) stock.

Will Mattel (MAT) Disappoint This Earnings Season?

World's largest toy manufacturer, Mattel Inc. (Nasdaq:MAT-Free Report) is set to report fourth quarter and full year 2013 results before the opening bell on Jan 31, 2014. In the last quarter, it delivered a positive earnings surprise of 5.45%. Let's see how things are shaping up for this announcement.

Factors to Consider

After being considerably down in the first two quarters of 2013, sales at Mattel's core Fisher-Price products were flat year over year during the third quarter. Results in the upcoming quarter are likely to improve driven by solid product line-up, strategic association with entertainment companies and expansion into the emerging markets.

However, although Mattel launched several products in 2013, they are expected to contribute only marginally to 2013 sales. Moreover, the company is likely to be affected by age compression, which is leading to a drift toward digital solutions from traditional games, thus hurting toy sales. Limited consumer spending also continues to affect the retail environment for the toy industry.

Earnings Whispers?

Our proven model does not conclusively show that Mattel Inc. is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Positive Zacks ESP: Expected Surprise Prediction or ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +0.83%.

Zacks Rank #4 (Sell): Mattel Inc.'s Zacks Rank #4 when combined with a positive ESP makes surprise prediction difficult. We caution against stocks with Zacks Rank #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

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