Zacks Industry Outlook Highlights: Coca-Cola, Hershey, Wal-Mart Stores and
Molson Coors Brewing
CHICAGO, Oct. 30, 2012
CHICAGO, Oct. 30, 2012 /PRNewswire/ --Today, Zacks Equity Research discusses
the U.S. Consumer Staples, including Coca-Cola (NYSE:KO), The Hershey Company
(NYSE:HSY), Wal-Mart Stores, Inc. (NYSE:WMT) and Molson Coors Brewing Company
A synopsis of today's Industry Outlook is presented below. The full article
can be read at
We do not have an Outperform recommendation on any of the consumer staples
companies. However, companies like Starbucks, Coca-Cola, Heinz, Hershey,
Walmart and Molson Coors are showing impressive growth despite industry
(NYSE: KO) has beaten estimates and delivered solid growth in all the quarters
of 2012. We are encouraged by the company's global reach, strong brand power,
expanding presence outside the U.S. and its solid cash position. Moreover, the
company's acquisition of Coca-Cola Enterprises' bottling business and its
productivity initiatives are expected to result in significant cost savings.
Share buybacks continue to be significant and the company has also increased
its dividend rate for 50 consecutive years. The stock carries a Zacks #3 Rank.
The Hershey Company
(NYSE: HSY) raised its 2012 earnings guidance after a solid first-half
performance. Earnings in the second quarter increased 17.9% year over year,
driven by revenue growth and improved gross margins. Moreover, the company's
strong brand positioning, strategic marketing investments in core brands,
disciplined innovation, and consumer capabilities make it attractive.
The company's pricing and productivity benefits and improved efficiencies from
the company's supply-chain initiatives overshadowed the headwinds from rising
input costs. The company pays a regular quarterly dividend that yields 2.7%,
which makes this chocolate maker attractive to income seeking investors.
Hershey's has also raised its long-term targets following its continued
earnings upside. The company aims to achieve $10 billion in net sales by 2017.
The stock carries a Zacks #2 Rank (short-term Buy rating).
Wal-Mart Stores, Inc.'s
(NYSE: WMT) second quarter 2013 earnings were impressive, driven by top-line
and positive same store sales. Though currency headwinds and continued
economic pressures remained a hurdle, the company upped its full year forecast
versus its prior earnings forecast.
We are encouraged by the scale, product and geographic diversity of Walmart.
Moreover, Walmart is the sixth-largest Internet retailer. The company is
focusing on expanding its presence in the online business, which is already
strong in the US, UK, Canada and Brazil. The stock carries a Zacks #2 Rank
(short-term Buy rating).
Heinz's first quarter 2013 results exceeded the prior-year earnings due to a
lower-than-expected tax rate, organic sales growth and productivity
improvements. Though reported revenues declined due to currency headwinds,
organic revenues grew 4.8%. Overall, Heinz's robust brand portfolio, continued
strong growth in emerging markets, strong marketing investments and ongoing
cost saving efforts will boost long-term growth. The stock carries a Zacks #3
Rank (short-term Hold rating).
Despite challenging market conditions, global brewer Molson Coors Brewing
Company (NYSE:TAP) posted impressive results in the last three quarters. The
company's acquisition of StarBev is highly encouraging as the addition of
StarBev's flagship brand Staropramen to the company's portfolio will help it
to expand in untapped markets. The stock carries a Zacks #3 Rank (short-term
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