Magna International, Hibbett Sports, Juniper Networks, VMware and
Alcatel-Lucent highlighted as Zacks Bull and Bear of the Day
CHICAGO, Aug. 30, 2013
CHICAGO, Aug. 30, 2013 /PRNewswire/ --Zacks Equity Research highlights Magna
International Inc. (NYSE:MGA-Free Report) as the Bull of the Day and Hibbett
Sports, Inc. (Nasdaq:HIBB-Free Report) as the Bear of the Day. In addition,
Zacks Equity Research provides analysis on the Juniper Networks
(NYSE:JNPR-Free Report), VMware (NYSE:VMW-Free Report) and Alcatel-Lucent,
S.A. (NYSE:ALU-Free Report).
Here is a synopsis of all five stocks:
Bull of the Day:
Tesla has made cars sexy again. The auto industry is in the middle of a
renaissance, and that includes the auto parts suppliers like Magna
International Inc. (NYSE:MGA-Free Report). This Zacks Rank #1 (Strong Buy) has
surprised on the Zacks Consensus Estimate 7 quarters in a row.
Magna is based in Ontario, Canada and has 315 manufacturing operations in 29
countries. Its customers encompass nearly every auto company in the world. It
produces body, chassis, interiors, exteriors, seating, powertrain,
electronics, mirrors, closures and roof systems.
On Aug 8, Magna reported second quarter earnings and beat the Zacks Consensus
by 11.3%. Sales jumped 16% to a record $8.96 billion. This was better than
vehicle production which rose 7% in North America and fell 1% in Europe.
Complete vehicle assembly sales jumped 23% to $796 million compared to $645
million last year.
The auto supplier is optimistic about North American production. It gave 2013
guidance of 16.1 million vehicles.
It also raised full year revenue guidance to the range of $33.3 billion to
$34.7 billion from its previous guidance of $32.6 billion to $34 billion.
Magna didn't give EPS guidance but that didn't stop the analysts from raising
their estimates for both 2013 and 2014 after the big earnings beat.
8 out of 10 estimates have moved higher for 2013 since the report, pushing the
Zacks Consensus Estimate up to $6.14 from $5.96.
Bear of the Day:
What's going on in the sporting goods market? Hibbett Sports, Inc.
(Nasdaq:HIBB-Free Report) recently lowered fiscal 2014 earnings and same store
This Zacks Rank #5 (Strong Sell) is only expected to grow earnings by 1.3% in
fiscal 2014 as the retail environment remains challenging.
Hibbett Sports operates sporting goods stores predominantly in the South,
Southwest, Mid-Atlantic and Midwest regions of the U.S. Its stores average
about 5,000-square-feet and are located in strip malls and enclosed malls in
small to mid-sized markets.
On Aug 23, Hibbett reported second quarter results and did beat the Zacks
Consensus by 2 cents. Earnings were 40 cents compared to the Consensus of 38
But comparable same store sales rose just 0.3% year over year. The company
blamed the soft sales on a "challenging economic environment."
Despite being encouraged by a strong start to the third quarter, and beating
the Consensus Estimate for the second quarter, Hibbett still lowered its full
year earnings guidance to the range of $2.65 to $2.77 from previous guidance
of $2.85 to $3.05.
Full year comparable store sales are now expected to be in the low
single-digit range which is down from the low to mid single-digit range it had
The analysts didn't wait around for more news. They cut fiscal 2014 to $2.76
from $2.91 but they also aren't optimistic on fiscal 2015 either. They slashed
fiscal 2015 to $3.16 from $3.35.
Juniper, VMWare Expand Partnership
One of the leading providers of networking solutions and communications
devices, Juniper Networks (NYSE:JNPR-Free Report) recently announced that it
has extended its partnership with VMware (NYSE:VMW-Free Report) to offer
solutions for connecting virtual and physical networks within a virtual data
center. VMware is an industry-leading virtualization software company.
The partnership involves Juniper's VMware NSX L2 Gateway integration and VXLAN
routing products that enable connection within a data center and between data
centers and speed up the transition to software-defined networking (SDN).
Considering VMware's market position and customer clout, the partnership
should help Juniper Networks expand its customer base.
The increasing complexity in cloud infrastructure has led to growing demand
for SDN solutions. These solutions increase the flexibility of the
infrastructure and reduce costs for companies. It is expected that the lower
cost proposition will lead to quicker adoption of SDN technology, which bodes
well for suppliers such as Juniper.
Juniper's second-quarter 2013 revenues moved up 7.2% to $1.15 billion from the
year-ago quarter and 8.6% sequentially. It is witnessing strong revenue growth
in some of its key business markets and is gaining traction in its routing and
switching portfolio. The company's new products, cost reduction initiatives
and improving execution are expected to remain the positives, going forward.
Juniper Networks Inc. is a leading provider of networking solutions and
communications devices. The company develops, designs and sells products that
help to build network infrastructure, which are used for services and
applications based on single Internet protocol networks worldwide.
However, the pending outcome of the SEC investigation, competition from
Alcatel-Lucent, S.A. (NYSE:ALU-Free Report), among others, still-sluggish
federal spending and unfavorable macroeconomic conditions remain near-term
Currently, Juniper has a Zacks Rank #2 (Buy).
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