CHICAGO, Aug. 17, 2011 /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: BJ's Wholesale Club Inc.
(NYSE: BJ), Costco Wholesale Corporation (Nasdaq: COST)
Medtronic (NYSE: MDT) St Jude Medical (NYSE: STJ) and
Boston Scientific Corporation (NYSE: BSX).
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Here are highlights from Tuesday's Analyst Blog:
Earnings Preview: BJ's Wholesale
BJ's Wholesale Club Inc. (NYSE: BJ), a leading warehouse
club operator in the United
States, is scheduled to report its second-quarter 2011
financial results before the bell on Wednesday, August 17, 2011. The current Zacks
Consensus Estimate for the quarter is 76
cents a share. The Zacks Consensus estimates revenue at
$3,005 million for the second
quarter.
First-Quarter 2011, a Synopsis
BJ's Wholesale posted better-than-expected first-quarter 2011
results on the heels of a rise in traffic, increase in sales of
perishable foods and gasoline, and effective cost management. The
quarterly earnings of 63 cents a
share beat the Zacks Consensus Estimate of 56 cents, and surpassed its own guidance range of
54 cents to 58 cents. The quarterly
earnings also rose 26% from 50 cents
in the prior-year quarter.
Total revenue, which includes net sales, membership fees and
other revenue, jumped 10% to $2,829
million from the prior-year quarter and came well ahead of
the Zacks Consensus Estimate of $2,802
million. Comparable club sales for the quarter grew 6.3%,
including a positive impact of 3.9% from gasoline sales.
Second-Quarter 2011 Consensus
The analysts surveyed by Zacks expect BJ's Wholesale to post
second-quarter 2011 earnings of 76
cents a share. The current Zacks Consensus Estimate compares
with 67 cents a share earned in the
year-ago quarter. The estimates in the current Zacks Consensus for
the quarter range from a low of 72
cents to a high of 80
cents.
Zacks Agreement & Magnitude
Of the 13 analysts following the stock, only 1 analyst revised
the estimate upwards in the last 30 days, having no material impact
on the Zacks Consensus Estimate of 76
cents. In the last 7 days, none of the analysts revised
their estimates keeping the Zacks Consensus Estimate unchanged.
Mixed Earnings Surprise History
With respect to earnings surprises, BJ's Wholesale has missed as
well as topped the Zacks Consensus Estimate over the last four
quarters in the range of negative 8.2% to positive 19.4%. The
average remained at positive 6.8%. This suggests that BJ's
Wholesale has beaten the Zacks Consensus Estimate by an average of
6.8% in the trailing four quarters.
BJ's in Neutral Lane
BJ's will sustain its investments in Club payroll, Club remodels
and technology to augment the sales of perishable items, which have
helped in increasing sales, improving traffic count and gaining
market share. The company has also benefited from rising gasoline
prices.
Further, a negligible debt-load and healthy cash reserves augur
well for future operating performance. However, a sluggish economic
recovery and an erratic consumer behavior could intensify pricing
competition. Moreover, BJ's clubs being highly concentrated in
northeastern U.S. may see cannibalization of sales with the opening
of new stores in existing markets.
Currently, we have a long-term 'Neutral' recommendation on the
stock. Moreover, BJ's Wholesale, which faces stiff competition from
Costco Wholesale Corporation (Nasdaq: COST), holds a Zacks
#3 Rank that translates into a short-term 'Hold' rating.
Promising Therapy from Medtronic
Leading medical devices player, Medtronic (NYSE: MDT)
recently announced positive data for its InterStim therapy. It was
observed that the therapy could improve the quality of life in a
majority of patients after three years of follow -up. Earlier, in
April 2011, the company had received
approval from the US Food and Drug Administration (FDA) for its
InterStim therapy for bowel control. The therapy was also
prescribed for treating overactive bladder and non-obstructive
urinary retention.
The three-year follow-up data on 120 patients was published in
the September issue of "Diseases of the Colon and Rectum".
The analysis was carried out to check the safety and effectiveness
of the InterStim therapy. Among the 77 patients who completed all
the three follow-up assessments, 86% witnessed a 50% reduction in
the number of incontinent episodes per week compared to baseline.
Moreover, patients experienced significant improvements in
overall quality of life at 12, 24 and 36 months of follow-up.
In the third quarter of fiscal 2011, this segment generated
$432 million in sales, up 5% (4% at
CER) from the year-ago period. Following the FDA approval of
InterStim therapy for bowel control, the company is working on
securing reimbursement as it plans to expedite its launch in fiscal
2012.
Fiscal 2011 has been one of the most challenging years for
Medtronic precipitated by the macroeconomic downturn and decreased
utilization. According to the company's estimates, its markets are
currently growing in the low-single digits versus 6−7% in the
previous year. Although the situation is improving gradually, the
two biggest segments at Medtronic – CRDM and Spinal continue to
remain under pressure. As a result, the company is focused on
developing new technologies to make up for lost sales.
Over the past few years, Medtronic has been reallocating
resources towards new therapies and emerging markets to drive
growth. Meaningful acquisitions include Ardian, Invatec, Osteotech
and ATS Medical. Following the launch of Protecta and Revo MRI in
the US, pricing and market share are expected to improve. However,
the company faces tough competition from players like St Jude
Medical (NYSE: STJ) and Boston Scientific Corporation
(NYSE: BSX).
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