The Zacks Analyst Blog Highlights: BJ's Restaurants, Maxim Integrated Products, LinkedIn, Intersil and Amazon.com
Zacks Equity Research
For Immediate Release
Chicago, IL – April 24, 2013 – 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 includeBJ’s Restaurants Inc. (BJRI), Maxim Integrated Products (MXIM), LinkedIn Corp. (LNKD), Intersil Corp. (ISIL) and Amazon.com (AMZN).
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Here are highlights from Tuesday’s Analyst Blog:
Is BJ’s Restaurants Expected to Miss?
BJ’s Restaurants Inc. (BJRI) prepares to release its first-quarter 2013 results after the closing bell on Thursday, Apr 25. Last quarter BJ’s Restaurants’ earnings were in line with the Zacks Consensus Estimate. Let’s see how things are shaping up for this announcement.
Factors to Consider this Quarter
Continuous decline in comparable restaurant sales (comps) and increasing cost may hurt the company’s performance in the first quarter.
BJ’s Restaurants’ same-store sales growth has been sluggish in the past two quarters. Even in the first seven weeks of first-quarter 2013, comps were down 0.5% in contrast to a positive 4% for the same period last year. Moreover, with higher payroll taxes, delayed tax refund and increased gasoline prices, the sales environment is also expected to remain choppy, as consumer spending is low.
BJ’s Restaurants’ top-line growth is driven by several sales-building measures, which are pushing up its cost structure. Management expects the higher marketing spends to continue in the first quarter of 2013. We believe that the continuous increase in costs will act as a major headwind for BJ’s Restaurants’ profits in the to-be-reported quarter.
The Zacks Consensus Estimate for 2013 and 2014 has moved down mostly over the last 60 days.
Earnings Whispers?
Our proven model does not conclusively show that BJ’s Restaurants is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank #1, #2 or #3 for this to happen. That is not the case here as you will see below.
Negative Zacks ESP: The Most Accurate Estimate stands at 26 cents per share while the Zacks Consensus Estimate is higher at 28 cents per share. That is a difference of -7.14%.
Zacks Rank #5 (Strong Sell): BJ’s Restaurants carries a Zacks Rank #5 (Strong Sell). We caution against stocks with Zacks Rank #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum which is exactly the case with BJ’s Restaurants.
Will Maxim Miss Earnings Estimates?
Maxim Integrated Products (MXIM) is set to report third quarter 2013 results on Apr 25. Last quarter it posted a 2% positive surprise. Let’s see how things are shaping up for this announcement.
Growth Factors This Past Quarter
Despite posting a year-over-year increase in the top line, primarily boosted by consumer and computing end markets; higher costs and resultant contraction in margins kept the lid on the company’s earnings.
However, management is positive about the automotive end market as it won several design wins in the last quarter. Steady growth in distributor design registrations also boosted revenues. Maxim also witnessed stronger demand for its femtocell offerings.
Maxim believes that its partnership with Avnet may result in new opportunities in industrial markets.
Earnings Whispers?
Our proven model does not conclusively show that Maxim is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank #1, #2 or #3 for this to happen. That is not the case here as you will see below.
Negative Zacks ESP: The Most Accurate estimate stands at 41 cents while the Zacks Consensus Estimate is at 42 cents. That is a difference of -2.38%.
Zacks Rank #2 (Buy): Maxim’s Zacks Rank #2 (Buy) when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
LinkedIn Corp. (LNKD), Earnings ESP of +300.0% and Zacks Rank #3 (Hold)
Intersil Corp. (ISIL), Earning ESP of +62.5% and Zacks Rank #3 (Hold)
Amazon.com (AMZN), Earnings ESP of +100.0% and Zacks Rank #3 (Hold)
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