On Jun 4, Zacks Investment Research upgraded
Avon Products Inc
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Avon has been witnessing rising earnings estimates on the back
of better-than-expected bottom-line results in the first quarter
of 2013. For the second consecutive quarter, this global beauty
company's earnings per share beat the Zacks Consensus Estimate
after reporting lower-than-expected earnings in the past 6
quarters. Moreover, we believe that Avon's strategic move of
improving the health of its balance sheet through refinancing
activities helped in the upward movement of estimates.
Avon posted first-quarter adjusted earnings of 26 cents per
share on Apr 30, easily beating the Zacks Consensus Estimate of
14 cents, and increasing twofold from the comparable year-ago
quarter number of 10 cents.
Of late, Avon has been encountering challenges on various
fronts including declining top and bottom lines and
highly-leveraged balance sheet. In Nov 2012, Avon outlined some
strategic measures focused on accelerating the top-line growth,
trimming down costs and improving working capital.
As part of its strategy, Avon decreased its quarterly dividend
by 6 cents to 23 cents per share and now aims to slash costs by
$400 million through 2016. We believe that the Avon's turnaround
strategies are paying off, as is evident from its improved
operating results in the last 2 quarters.
The Zacks Consensus Estimate for 2013 increased 11.7% to $1.15
per share as most of the estimates were revised upward over the
last 60 days. Moreover, for 2014, the estimates were revised
upward over the same time-frame, thereby lifting the Zacks
Consensus Estimate by 6.9% to $1.40 per share.
Other Stocks to Consider
Apart from Avon,
Nu Skin Enterprises Inc.
) with a Zacks Rank #1 (Strong Buy) is performing well in the
soaps-cosmetics industry. Other stocks in the same sector that
warrants a look include
International Flavors & Fragrances Inc.
Inter Parfums Inc
), both of which carry a Zacks Rank #2 (Buy).
AVON PRODS INC (AVP): Free Stock Analysis
INTL F & F (IFF): Free Stock Analysis
INTER PARFUMS (IPAR): Free Stock Analysis
NU SKIN ENTERP (NUS): Free Stock Analysis
To read this article on Zacks.com click here.