On Aug 3, 2013, Zacks Investment Research upgraded
R.R. Donnelley (
to a Zacks Rank #1 (Strong Buy). With a strong year-to-date
return of 116.4% and a positive estimate revision trend,
Donnelley is an attractive investment opportunity.
ACTIVISION BLZD (ATVI): Free Stock Analysis
BARRETT BUS SVS (BBSI): Free Stock Analysis
MOODYS CORP (MCO): Free Stock Analysis Report
DONNELLEY (RR) (RRD): Free Stock Analysis
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Why the Upgrade?
Impressive second quarter results, incremental revenue growth
from acquisitions, robust logistics result and improving
liquidity contributed to the upgrade. Additionally, Donnelley's
multi-million dollar contract wins from various companies remain
a major positive catalyst.
Donnelley reported second quarter earnings of 45 cents per share
that comfortably surpassed the Zacks Consensus Estimate by a
couple of cents. Revenues increased 1.7% year over year to $2.57
billion and exceeded the Zacks Consensus Estimate by
approximately $30.0 million.
Donnelley's logistics business recorded robust organic revenue
growth of 14.0% on a year-over-year basis, primarily driven by
incremental revenues from acquisitions. Double-digit volume
growth helped premedia revenues to grow 15.0% organically. Book
directory and variable print unit organic revenues declined 2.4%
and 0.6%, respectively in the quarter.
Donnelley reiterated its fiscal 2013 guidance. The company
expects revenues to be in the range of $10.1 billion to $10.3
billion. The guidance assumes approximately $100.0 million
negative impact from foreign exchange rates and lower paper
The Zacks Consensus Estimate for fiscal 2013 increased 2.5% to
$1.62 per share as most of the estimates were revised higher over
the last 7 days. For fiscal 2014, the Zacks Consensus Estimate
jumped 8.6% to $1.65 per share over the same period.
The long-term expected earnings growth rate for Donnelley is
Other Stocks to Consider
Investors can also consider other stocks that are doing well
right now. These include
Activision Blizzard (
Barrett Business Services (
Moody's Corp (
. While Activision and Barrett carry a Zacks Rank #1 (Strong
Buy), Moody's carries a Zacks Rank #2 (Buy).