For Immediate Release
Chicago, IL – June 27, 2016– Zacks Equity Research highlights Carrols Restaurant Group (TAST) as the Bull of the Day and HSBC Holdings (LON:HSBA) (HSBC) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Barclays (LON:BARC) PLC (BCS),Morgan Stanley (NYSE:MS) (MS) and JPMorgan Chase & Co (NYSE:JPM). ( JPM).
Here is a synopsis of all five stocks:
That whole Brexit event sure rocked the domestic stock and international equity markets last week. But that doesn’t mean that there aren’t some great deals to be had out there. When looking for which stocks you should be swooping in and buying here you should stick to the basics. I’m searching for stocks which analysts are still very bullish on in the intermediate term that do a majority of their business domestically. That’s why I’ve made today’sBull of the Day the purveyor of fast food here in the US, Carrols Restaurant Group (TAST).
The company basically serves as a proxy for shares of Burger King. The company owns and operates 705 locations in 16 states. Analysts have been forced to jack up their earnings estimates for the company as they just keep on surprising to the upside. Last quarter analysts were looking for an 8 cent loss and the company came in at 5 cent EPS. The quarter before, the company reported 18 cents while analysts were only looking for 3.
So when looking at the current year, analysts had been looking for 53 cents sixty days ago. Now two analysts have increased their estimates, pushing our Zacks Consensus Estimate up to 58 cents. The increased estimates and recent surprises are a big reason for the Zacks Rank #1 (Strong Buy) the stock currently enjoys.
If you’ve read some of my other pieces you’d see that it’s been a long while since I’ve been bullish on European banks. For me, there’s just too much going on over there with BASAL regulatory requirements and contingent convertible securities (also known as CoCos). If you haven’t heard of CoCos, you should check out my Trending Stocks video on it, “European Banks are in Love with the CoCo.”
In my opinion, the recent Brexit vote has only put more stress on European Banks. So it should come as no surprise that these recent events have done little to sway my opinion of them. Today’s Bear of the Day is Zacks Rank #5 (Strong Sell) HSBC Holdings (HSBC). HSBC Holdings is one of the largest banking and financial services organizations in the world and is headquartered at Ground Zero for Brexit, London, England.
Recent earnings estimate revisions for HSBC have been to the downside. Two analysts have dropped their earnings estimates for the current year over the last sixty days. The bearish sentiment has lowered our Zacks Consensus Estimates from $3.60 to $3.13 for the current year. A single analyst has also dropped their estimate for next year, lowering the Zacks Consensus Estimate from $3.44 to $3.21 for next year.
It’s been a tough ride for shares of HSBC over the course of the last several months. The stock was trading in the high $40s ahead of the August 2015 market selloff that sent major market indexes tumbling to lows. Since then the stock’s price has struggled to recover, bouncing between $29 and $34 for the last several months. Friday’s selloff took shares down over 9% to $30.68.
Additional content:
Brexit Wins, But at What Cost?
As Britain voted to leave the European Union (EU), the British Prime Minister David Cameron announced his resignation. The European project of greater unity that was conceived from the ashes of World War 2 also received a deathblow, making this the most significant historical moment, perhaps of all times.
Of course, a Brexit poses serious treats to the British economy. While Britain’s banks took a $130 billion battering, with Lloyds (LON:LLOY) and Barclays PLC ( BCS) getting hammered the most, tech majors are also subjected to disappointment. Most of the tech majors were for “Bremain” as Britain’s tech firms need unrestricted access to the European market in order to compete efficiently. British firms will now face skill shortage, regulatory headaches and less investment on top of rising borrowing costs that they had to bear because of the uncertainty ahead of the referendum on EU membership.
Bank of England and the European Central Bank have promised to protect markets from Brexit panic by injecting liquidity if required, but, for the time being the global markets are subject to fresh bouts of volatility and one hardly expects Britain to be spared.
Britain Votes to Leave European Union
British voters have decided to leave the EU, a stunning development indeed! Market pundits had warned that a Brexit will negatively affect financial conditions and the global economy. Fed Chair Janet Yellen had said that such a move would “usher in a period of uncertainty” and fuel volatility in world markets. We have already witnessed the pound crashing to its lowest level since 1985, with the sterling falling below $1.35.
The “leave” campaign secured around 51.8% vote, while the “remain” camp received 48.1% vote. England overwhelmingly voted for Brexit, but, Scotland and Northern Ireland backed “remain,” indicating a split down the middle. Those who campaigned for Brexit must be on cloud nine as the U.K. escaped EU’s shackles and are now in a position to utilize its full potential as a thriving economy. However, we shouldn’t forget that such a vote goes against common wisdom of economic prudence and the redoubtable opinions of notable economists.
Brexit to Hamper Britain’s Economy
As U.K. opts to leave the EU, their future relationship hangs in the balance. Spanning across 28 countries and encompassing more than 500 million consumers, the EU is Britain’s biggest trading partner. About 75% of British firms that trade goods globally do so with the EU. Access to a single market has helped British firms expand their business.
But, a Brexit will now push Britain’s economy into a recession, resulting in a drop of 3.6% in GDP and around 500,000 job cuts. U.K also stands to lose other essential benefits including free movement of goods, services, capital and people. Moreover, U.K. won’t be able to tweak or play a significant role in influencing the laws of the single market.
Cameron had earlier cautioned that a potential Brexit will adversely affect British spending on healthcare. He forewarned that Brexit will dry up around 40 billion pounds in U.K. public finances by 2020.
Britain’s Financial Sector Faces the Axe
Financial services that account for almost 10% of the U.K’s economic activity will largely be affected by the vote. Around 2.2 million financial industry workers face years of uncertainty. Many also fear the risk of job cuts, as London’s status as Europe’s premier financial hub is now at stake. All international and British banks had warned that they could move thousands of jobs if Britain opts out of the EU.
Morgan Stanley (MS) had said that it could move around 1,000 of its roughly 6,000 employees currently in Britain to the EU. The CEO of rival firm, JPMorgan Chase & Co. ( JPM), Jamie Dimon told staffers that the bank “may have no choice” but to overhaul its UK business model, casting doubts over its 16,000 workforce.
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CARROLS RESTRNT (TAST): Free Stock Analysis Report
HSBC HOLDINGS (HSBC): Free Stock Analysis Report
BARCLAY PLC-ADR (BCS): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis Report
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