The Zacks Analyst Blog Highlights:SodaStream, Tesla Motors, Honda Motor, Tata Motors and Ford Motor

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Jan 14, 2014, 09:30 ET

CHICAGO, Jan. 14, 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 SodaStream (Nasdaq:SODA-Free Report), Tesla Motors, Inc. (Nasdaq:TSLA-Free Report), Honda Motor Co., Ltd. (NYSE:HMC-Free Report), Tata Motors Ltd. (NYSE:TTM-Free Report) and Ford Motor Co. (NYSE:F-Free Report).

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Here are highlights from Monday's Analyst Blog:

SodaStream (SODA) Slides on Earnings Warning

Monday was a big session for a number of stocks, as several released fresh guidance or offered up their take on the key holiday season. While many of these new releases led to big moves, SodaStream (Nasdaq:SODA-Free Report)clearly stood out on the downside.

In fact, shares of the once-high flying SODA crashed by over 25% on the day, thanks to worries over holiday sales, and concerns over its 2014 outlook. Volume was also extremely elevated, with volume hitting more than ten times normal following the news release.

SODA Earnings in Focus

SodaStream announced that its preliminary results for 2013 came in a bit below expectations. Revenues were a tad light, missing a consensus estimate by $5 million, though a net income miss—of over 20%-- was the real cause for concern.

This is because such a big miss on income despite the relatively solid revenues suggests that profit margins are falling for this do-it-yourself soda upstart. And, with increased competition, it is clearly becoming much more difficult for SODA to keep growth levels at a solid clip.

"Despite achieving all-time record sales, we failed to deliver our profit targets and are disappointed in our fourth quarter performance," said Daniel Birnbaum, Chief Executive Officer of SodaStream. "These preliminary results reflect a challenging holiday selling season in the U.S. and several factors, mostly from the second half of the quarter that negatively impacted our gross margin."

SodaStream also said that it expects some of the headwinds to continue into the first half of the year, suggesting more weakness might be ahead for the company. However, SODA did note that they hope to restore margins back up to past levels later on in the year.

Earnings Estimates

SODA was already a Zacks Rank #4 before this poor news on the guidance front, so estimates were trending lower for the company leading up to this event. Plus, its industry also receives a pretty terrible rank too, as it is currently in the bottom 10% of all industries surveyed.

And with the reduced guidance, it seems very likely that earnings estimates will be coming down again over the next few days. If that is the case, Zacks Rank #5 territory is very likely for this underperforming stock.

Tesla to Enhance Model S Charging System

Tesla Motors, Inc. (Nasdaq:TSLA-Free Report) announced that it will provide an upgraded wall adapter to its Model S vehicles in addition to the software update provided in December. The automaker intends to prevent excessive heating of the adapters to ensure safety to its customers.

The Universal Mobile Connector (UMC) NEMA 14-50 adapters can overheat due to higher than normal electrical resistance resulting from corrosion, physical damage of receptacles or faulty wiring of electrical outlets.

In order to counter this problem, in Dec 2013, Tesla launched an over-the-air software update which will prompt the Model S onboard charging system to automatically reduce the charging current by 25% when there is a variation in the input power. This reduces the heat generated in any high resistance connections outside the vehicle.

Tesla's vehicles will automatically be upgraded with this technology via the over-the-air update. The receipt of the upgrade can be verified by checking if the car is functioning with a 5.8.4 or newer software version. The vehicles, which cannot be upgraded with this over-the-air technology, need to be taken to the Tesla authorized Service Centers or Tesla Rangers.

As an added precaution, Tesla designed an improved wall adapter with a thermal fuse for those using the 14-50 sockets. In case the circuit breakers malfunction on the house side or the car side, this thermal fuse will prevent further current flow in case the wall socket region heats up. This upgraded adapter will be provided to users of the existing and new vehicles free of cost within a few weeks.

Tesla currently has a Zacks Rank #4 (Sell). We are concerned about the persistent losses, production constraints, high prices and mounting R&D and SG&A expenses of the company. Some prominent automobile companies include Honda Motor Co., Ltd. (NYSE:HMC-Free Report), Tata Motors Ltd. (NYSE:TTM-Free Report) and Ford Motor Co. (NYSE:F-Free Report).

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