Visteon Corp. (VC) delivered a big fourth quarter earnings and sales beat on February 28, and management provided bullish guidance for 2013. This prompted analysts to revise their estimates significantly higher for both this year and next, sending the stock to a Zacks Rank #1 (Strong Buy). Despite the strong earnings momentum, the valuation picture still looks very reasonable with shares trading at just 1.4x book value. Visteon is a global automotive supplier that specializes in climate, electronics and interiors systems, modules and components for the major automotive manufacturers around the globe. More than 80% of its sales come from outside of North America. Visteon delivered a big fourth quarter beat with adjusted earnings per share came in at $1.17, beating the Zacks Consensus Estimate by 20 cents. Sales rose 5% to $1.823 billion, well ahead of the consensus of $1.782 billion. This increase was primarily driven by higher sales in the ‘climate’ segment, which saw higher production volumes in Asia and North America. The gross profit margin expanded 253 basis points to 10.9%. Meanwhile, selling, general and administrative expenses held steady at 5.6% of total sales. These factors led to a solid 27% increase in earnings before interest, taxes, depreciation and amortization (EBITDA). Special Offer: Stock picks from Forbes Dividend Investor are up 15.9% since July. Average yield on buys is 5%. Click here now to try Forbes Dividend Investor free for 30 days. Estimates Rising Following strong fourth quarter results, management provided encouraging sales and EBITDA guidance for 2013. This prompted analysts to revise their estimates higher for both 2013 and 2014, sending the stock to a Zacks Rank #1 (Strong Buy). The 2013 Zacks Consensus Estimate is now $3.98, representing 37% growth over 2012. The 2014 consensus is currently 38% higher at $5.50. The two biggest factors of the Zacks Rank are the ‘Agreement’ and ‘Magnitude’ of the analysts’ estimates. As you can see in the chart below, both of these factors are moving in the right direction: Reasonable Valuation The valuation picture looks reasonable for Visteon with shares trading at 13x forward earnings, inline with its historical median. Its price to book ratio is just 1.4, which is also inline with its historical multiple. With strong earnings momentum and reasonable valuation, Visteon offers investors attractive upside potential. Todd Bunton is the growth & income stock strategist for Zacks Investment Research and editor of the Income Plus Investor service. …read more
Source: FULL ARTICLE at Forbes Latest
Tag Archives: Estimates Rising Following
Earnings Bonanza Has Macy's Looking Good
Macy’s (M) delivered the coveted “triple play” with its latest earnings report. On February 26, the company reported: A positive earnings surprise A positive sales surprise Management guidance above the Zacks Consensus Estimate This prompted analysts to revise their estimates higher for both 2013 and 2014, sending the stock to a Zacks Rank #1 (Strong Buy). Since the Great Recession officially ended in 2009, Macy’s has consistently delivered solid same-store sales growth and expanding profit margins, which has led to annual double-digit earnings growth. And analysts expect this trend to continue over the next couple of years. Despite this, shares trade at just 10.5x 12-month forward earnings, well below the industry median of 14.0x. Tack on a solid 1.9% dividend yield, and this stock looks poised to deliver strong total returns to investors. Macy’s operates about 800 Macy’s department stores in 45 states, the District of Columbia, Guam and Puerto Rico. It also owns and operates the Bloomingdale’s brand, which has 37 department stores in 11 states. On February 26, Macy’s delivered strong results for its fiscal 2012 fourth quarter. Sales increased 7.2% to $9.350 billion, which was ahead of the Zacks Consensus Estimate of $9.327 billion. The company benefited from an extra week in the quarter, but if you strip that out, same-store sales on a comparable 13-week period still rose a solid 3.9%. Online sales were particularly strong, rising 48% over the same period last year (online sales are included in the same-store sales calculation). Meanwhile, adjusted operating income expanded 50 basis points to 14.9% of sales. This led to a 21% increase in adjusted earnings per share for the quarter to $2.05, well ahead of the Zacks Consensus Estimate of $1.98. It was a 21% increase over the same quarter last year. It was also Macy’s 11th consecutive positive earnings surprise; quite an impressive streak for a retailer. Estimates Rising Following the solid fourth quarter results, management provided 2013 EPS guidance of $3.90-$3.95, which was ahead of consensus at the time. Not surprisingly, this prompted several positive earnings estimate revisions from analysts, sending the stock to a Zacks Rank #1 (Strong Buy). The two biggest factors in the Zacks Rank are the ‘agreement’ and ‘magnitude’ of analysts’ estimates. And as you can see in the chart below, analysts unanimously raised their estimates off the strong quarter, and it bumped consensus estimates up for both 2013 and 2014 by a decent amount: Based on current consensus estimates, analysts project 13% EPS growth this year and 12% growth next year. If Macy’s can deliver on these projections, it would mark the company’s 4th and 5th years of consecutive double-digit EPS growth. Special Offer: What you don’t own is just as important as what investments you do own. Top investing experts named names when it comes to securities to avoid in the year ahead. Get the results in this free downloadable report, 24 Widely-Held Investments You Should Sell Now. Attractive Valuation, Dividend Despite the strong growth projections, shares trade at just …read more
Source: FULL ARTICLE at Forbes Latest