Zacks
0
All posts from Zacks
Zacks in Our Research. Your Success.,

Molson Coors Brewing, AB InBev and Walt Disney highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – May 11, 2016– Zacks Equity Research highlights Molson Coors Brewing Company (TAP) as the Bull of the Day and AB InBev (BUD) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Walt Disney Company (DIS).

Here is a synopsis of all three stocks:

Bull of the Day :

With another Mother’s Day in the books, my calendar turns towards the official kick-off of summertime, Memorial Day. Summer for me means boats, street festivals, baseball, and of course beer. Today’s Bull of the Day is a beer company that’s the love child of two very famous brands from two very famous countries.

Molson Coors Brewing Company (TAP) is the world’s fifth-largest global brewer and it’s about to get bigger. The company recently announced that they’ll acquire full ownership of MillerCoors, their partnership with SAB Miller. President and CEO Mark Hunter commented on the deal saying, “The transaction is a game-changing opportunity for Molson Coors and advances our ambition to be the first choice for consumers and customers. MillerCoors is a business we know very well – its strategy, culture, brands and people – and we look forward to meeting and exceeding the needs of our valued distributor partners and consumers across the US.”

I like it because it’s a Zacks Rank #1 (Strong Buy). The bullishness comes not only from a recent boost in the current year consensus but also a huge move in next year’s numbers. We’ve seen the current year Zacks Consensus Estimate jump from $3.19 to $3.29 as three analysts have increased their earnings estimates. Next year’s number has gone from $4.05 to $5.38. Looks like the MillerCoors acquisition is likely to be accretive to next year’s earnings.

The company is coming off a big beat last quarter with EPS coming in at 54 cents versus our Zacks Consensus Estimate calling for 43 cents. That’s coming off the heels of a disappointing quarter where the company missed by 3 cents.

Bear of the Day:

Yesterday, AB InBev (BUD) announced it would switching up its marketing of the popular Budweiser brand. The company wants to call the beer “America” and change the label to reflect all sorts of patriotic themes. That’s not the reason I’m making the stock today’s Bear of the Day but it sure makes for a great story. You can check out my stance on the subject by viewing this light-hearted video I made about it titled

The reason I’m bearish on InBev is it’s a Zacks Rank #5(Strong Sell) with a Value Style Score of F and a Momentum Style Score of D. That tells me the valuations are a little out of whack and the estimate revisions haven’t been moving in the right direction.

Over the last ninety days two analysts have dropped their earnings estimates for the current year, while a single analyst has done so for next year’s numbers. The bearish sentiment has dropped the current year Zacks Consensus Estimate from $5.23 to $3.96. Looking at next year’s numbers, consensus has gone from $5.67 down to $4.50. The bearishness follows up on a drastic quarter for the company where EPS came in at 51 cents versus estimates calling for 87 cents.

The stock has been surprisingly resilient in the face of these downward earnings estimates. Since bottoming out just above $100 in October, the stock has approached $130 on several occasions. The most recent push to the highs stalled out just a few weeks ago. There is a bullish trend line providing support just below the current price action. And the Commodity Channel Index just crossed the zero line. So in the short term there’s actually a lot of momentum here.

However, eventually the fundamentals win out. Stocks tend to track with their earnings and if analysts are right about dropping their estimates, then this stock could be setting up for disaster in the intermediate term.

Additional content:

Disney (DIS) Misses Earnings 1st Time in 5 Years, Stock Falls 6%

Entertainment titan The Walt Disney Company (DIS) reported fiscal Q2 earnings results after the closing bell Tuesday, and the company missed estimates on both earnings and sales for the first timein 5 years -- since Q2 2011. Earnings per share of $1.36 missed the $1.40 expected, whereas revenues reached $12.97 billion, down from the $13.26 billion in the Zacks consensus estimate. Shares of DIS fell 6 percent immediately.

Most concerns related to Disney's massive span of global business has recently been concentrated on its Cable Network segment, which houses the ESPN sports network. "Cutting the cord" by consumers in the U.S. made this aspect of Disney's overall business risky, and Cable Networks finished down 2 percent in the quarter. The overall Media Networks group came in under expectations, although Operating Income was up 9 percent year over year.

Parks & Resorts also lagged in Disney's Q2 a bit, with foreign currency headwinds leading to a worse-than-expected overseas market. Domestically, however, Parks & Resorts was up 22 percent from Q2 2015, and this as Disney prepares the new Star Wars Land amusement park in time for the next installment of the Star Wars film franchise in 2017. Also, Disney World Shanghai is slated to open this June.

And all this before discussing Disney has been the quickest film company to bring in $1 billion in sales ever in history, benefitting its Studio Entertainment group. Revenues for the segment rose 46 percent year over year, and this is without factoring two recently released global blockbusters, Jungle Book and Captain America: Civil War.

Although Disney had long made a habit of beating expectations in its quarterly reports, there had been an overall negative bias from analysts downwardly revising earnings estimates notably over the past 60 days. Zacks ESP was also predicting a miss in the quarter. Some of this may have stemmed from the announcement last month that Disney COO Thomas Staggs -- thought by some to be heir-apparent to CEO Bob Iger -- was leaving the company.

Disney is far from through delivering fireworks, however, so the lower DIS stock trades in the after-market today, the more attractive the valuation becomes. We will check all analyst estimate changes on the Zacks Rank #3 (Hold) stock, moving forward.

Want the latest recommendations from Zacks Investment Research? Today, you can download7 Best Stocks for the Next 30 Days. Click to get this free report >>

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About the Analyst Blog

Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today. Find out What is happening in the stock market today on zacks.com.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
MOLSON COORS-B (TAP): Free Stock Analysis Report
 
ANHEUSER-BU ADR (BUD): Free Stock Analysis Report
 
DISNEY WALT (DIS): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research