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07/29/16 04:00:27 PM

Ball Corporation, O''Reilly Automotive Inc., Weingarten Realty Investors

Ball Corporation(BLL) : Citi resumes coverage of Ball Corporation (NYSE: BLL) with a Neutral rating and $77 target price following the $8.5 billion acquisition of Rexam Plc (ADRs previously traded under REXMY on the OTC) and $3.4 billion divestiture of assets. "While we think the merger was strategically sound and will significantly upgrade Ball's global portfolio (especially in Europe, Middle East and Africa), we'd like a more attractive entry point and greater clarity on $300 million plus of deal synergies Ball expects to realize, before taking a position," analyst Anthony Pettinari wrote in a note. The analyst has conservatively modeled $250 million in synergies by year-end 2018. However, he wonders how Ball will realize "procurement savings from a highly consolidated supplier base" without losing said savings to its consolidating customer base, especially given the "limited geographical overlap of the acquired assets." Related Link: Ball Corp 8-K Clears Confusion, Provides Buying Opportunity The company is scheduled to participate in six investor conferences this fall, and will hold an Analyst Day in December, its first since 2013. These appearances will be closely watched as investors gauge confidence in Rexam synergies and the progress of the 90-day review. "We'll also look for any changes in the commercial environment given significant industry changes over the past year, such as a potential ABI-SAB merger, new competitor entries into beverage cans, capacity adds from CanPack & MCC and potential for post-merger market share shift," Pettinari noted. Shares of Ball were trading at $70.69, down 0.32 percent at time of writing. Full ratings data available on Benzinga Pro. Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

O'Reilly Automotive Inc.(ORLY) : UBS maintains its Buy rating and $315 target price on O'Reilly Automotive Inc (NASDAQ: ORLY), saying that the improving trends at the end of the second quarter should set up accelerating results in the second half. Q2 Results The Springfield, Missouri-based company reported second-quarter EPS $2.65 on revenue of $2.18 billion. The results did not meet Wall Street expectations of $2.68 for EPS or the $2.19 billion for revenue. The company now expects third-quarter Q3 EPS $2.77-$2.87, which is lower than the consensus view of $2.93. Further, O'Reilly Automotive expects full-year earnings to be $10.30-$10.70 per share, with revenue in the range of $8.4 billion-$8.6 billion. The Street had expected EPS of $10.70 on revenue of $8.61 billion. Related Link: The Street Simply Hates GM And Ford "While ORLY's 2Q comp of 4.3 percent was a bit light relative to its recent levels, it seems poised to reaccelerate in 2H," analyst Michael Lasser wrote in a note. Weather Effects The recent softness in the company's results was attributed to the weather, with a mild winter and a cool start to the summer. Lasser said the weaker trends gave way to improved results at the end of the second quarter and into July. Importantly, the hot weather is driving elevated sales in seasonal categories including HVAC & batteries. "We think this should set it up for better results in 2H as the heat persists through the summer," Lasser continued. Additionally, the analyst said the company could top its own "conservative" FY EPS outlook with superior execution and strong macro environment. Lasser noted that the company is well positioned to generate about 85 bps of operating margin expansion in the second half given mid-single digit comp growth. At time of writing, shares of O'Reilly were up 0.52 percent to $290.18. Full ratings data available on Benzinga Pro.

Weingarten Realty Investors(WRI) : Weingarten Realty Investors (NYSE: WRI) reported a beat and raise quarter that led UBS to maintain its Buy rating and $45 target price on the stock. The REIT reported second-quarter core funds from operations (FFO) of $0.57 a share, topping consensus view of $0.56, and raised full-year FFO outlook to a range of $2.28-2.32 per share from $2.27-$2.31. 3 Questions Arise From Q2 UBS analyst Jeremy Metz weighed on the results in the form of three questions: 1. What Do Results Mean For The Stock? "Overall, we think it was a good quarter and continue to view WRI as an attractive way to play the shopping center sector with a defensive cash flow stream driven by necessity oriented consumer spending." Related Link: Jefferies Mostly Neutral On REIT Sector 2. What Were The Most Noteworthy Areas In The Report? SSNOI including redevelopments was up +3.3 percent. Redevelopments contributed 70bps. Cash releasing spreads were strong at +18.2 percent. New leases up 29.4 percent. Renewals growing 14.4 percent. However, leased occupancy of 94.9 percent dropped 60bps y/y, with a rejected TSA leased a noted drag. Box occupancy fell 100bps to 97.7 percent, while shop occupancy slipped 10bps to 90.2 percent. 3. What Is The Company's Outlook/Guidance; Did It Change? Weingarten's revised core FFO guidance of $2.28-$2.32 compares to UBS estimate of $2.30 and consensus estimate of $2.29. "Better than expected operations and acquisitions activity is being partially offset by capital markets activity and a $0.02 headwind from TSA (not prev in guidance)," Metz wrote in a note. "Some shifts in redevelopment rent timing was another drag, taking down SSNOI 50bps to 3-4 percent, though core SSNOI was unchanged at 2.5-3.5 percent," Metz added. At the time of writing, shares of Weingarten had risen 2.17 percent on the day to $43.60. Full ratings data available on Benzinga Pro. Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!


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