The Zacks Analyst Blog Highlights: Lockheed Martin, Activision Blizzard,
Apple, Zynga and Electronic Arts
CHICAGO, March 27, 2013
CHICAGO, March 27, 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 Lockheed Martin Corporation
(NYSE:LMT), Activision Blizzard Inc. (Nasdaq:ATVI), Apple (Nasdaq:AAPL), Zynga
(Nasdaq:ZNGA) and Electronic Arts (Nasdaq:EA).
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Here are highlights from Tuesday's Analyst Blog:
Strong Buy on Lockheed Martin
On Mar 26, we upgraded aerospace and defense major Lockheed Martin Corporation
(NYSE:LMT) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Lockheed reported mixed results in the fourth quarter 2012 with earnings below
and revenue above the Zacks Consensus Estimates. But that did not deter us
from holding a bullish outlook on the company. Our favorable outlook stems
from a solid order backlog, incremental dividend payouts and positive
initiatives taken by the company.
Lockheed Martin is a well-managed defense prime. Its working capital
improvements continue to impress, as is evident from its inventory turnover of
16.1 times in the trailing twelve months at the end of 2012, compared to only
3.1 times for the Zacks industry average -- a strong sign of operational
efficiency. In addition, Lockheed's operational effectiveness is evident in
its industry-high Return on Investment (ROI) of 34.9% in 2012.
Lockheed Martin has one of the strongest balance sheets among its peers, with
a stable long-term debt-to-capitalization of 80.2% at the end of 2012.
Lockheed continues to be a strong cash generator with its operating cash flow
reaching approximately $1.6 billion during 2012.
Lockheed's premier position in the defense space is upheld by the company's
solid 2013 guidance. Lockheed Martin forecast full-year 2013 earnings per
share in the range of $8.80–$9.10 on net revenues of $44.5–$46.0 billion.
Over the long term, the earnings growth rate is pegged at 6.08% while the top
line is expected to rise at a clip of 2.66%. The last 90 days saw the Zacks
Consensus Estimates for 2013 and 2014 rise a respective 7.6% and 2.9% to $8.87
ATVI's New Free-to-Play Card Game
Activision Blizzard Inc. (Nasdaq:ATVI) has announced a new free-to-play
strategy card game Hearthstone: Heroes of Warcraft, at PAX East. Beta testing
of the game, which is developed by Blizzard Entertainment, is expected to
The new game will be available for Windows and Apple's (Nasdaq:AAPL) Mac
platforms later this year and the iPad version would be released soon after.
Moreover, Hearthstone: Heroes of Warcraft is expected to be released for
Android as well.
Gamers reviewed the game to simple and engaging after playing the demo version
of the game at PAX. Gamers can play in two modes, namely "Play Mode" and "The
Forge", where they can get a chance to dwell with opponents and increase their
Reportedly, Hearthstone: Heroes of Warcraft will initially feature 300 cards,
with five cards in a pack. Though the game is available for free but gamers
have the option to purchase card packs to advance in the game quicker.
Hearthstone: Heroes of Warcraft is Blizzard's first free-to-play game
collectible card game. Free-to-play games enable gamers to access the game for
free. Developers and publishers earn revenues through the sales of in-game
items (also known as micro-transactions) and advertisement.
The current game is expected to boost the company's presence in the free-to
play gaming segment, which is dominated by Zynga (Nasdaq:ZNGA) and Electronic
Moreover, Activision's limited presence in the mobile segment, particularly on
Android platform (no other game except Call of Duty Elite), is a major growth
impediment in our view.
Additionally, volatile macroeconomic environment, uncertainty related to
console transition and tough year-over-year comparisons are the other
headwinds. We believe that the continued softness in video game industry
retail sales despite increasing investments in new products will continue to
hurt Activision's profitability in the near term.
Currently, Activision Blizzard has a Zacks Rank #4 (Sell).
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