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.
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).
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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