The biggest American football game of the year, millions watching, thousands in attendance and billions of dollars spent. Decadence at its finest, with high-flying parties, corporate functions and private jets galore, which are all now synonymous with Super Bowl Week!
On Feb. 1, thousands will flock to Glendale, Arizona from corporate CEO’s to fashion models (and a few actual fans), who will be attending the annual spectacle known as the Super Bowl.
If you have ever been to a Super Bowl, you will know that the game is almost secondary to the pre, during and post-game parties (unless you are one of the few rabid fans who actually gets a ticket, then the game is the most important aspect of the weekend). And what does most everyone want, Exposure! To be seen, remembered and known. From the host city, to the sponsor of the parking lots, the goal is to be seen and remembered.
The real prize is not the Lombardi Trophy, but the number of eyeballs on the TV. In 2014, 111.5 million people watched the Super Bowl breaking the previous record of 111.3 million viewers in 2012. To put into perspective, that is just over one-third of the entire population of the U.S.
That is why corporate sponsors pay ridiculous amounts of money each and every year to be part of this epic event!
Nowhere else can any corporate sponsor get such a high level of exposure or such a captive and attentive audience. That is also why NBC, which is owned by General Electric Company (NYSE:GE), is charging $4.5 million per 30-second commercial spot or $150,000 per second — a 12.5% increase last year’s Super Bowl.
There are some companies that are utilizing most or all of their entire annual advertising budgets. These “smaller” companies are attempting to get noticed and entice new customers with lavish ad spending.
Some other companies have a long-standing traditions with the Super Bowl, like Anheuser Busch InBev SA (ADR) (NYSE:BUD), The Coca-Cola Co (NYSE:KO) and McDonald’s Corporation (NYSE:MCD). Yet, BUD and KO are currently Zacks Rank #3 “holds,” and MCD is a #5 “strong sell” due to recent market pressures. Therefore, these traditional advertisers are attempting to spur desire and positive correlations with their products in attempt to boost sales and product awareness.
PepsiCo, Inc. (NYSE:PEP) a Zacks Rank #4 “sell” is one of the largest advertisers for Super Bowl XLIX, purchasing at least three 30-second commercial spots and the entire half-time show highlighted by a Katy Perry performance.
Then there are the automakers, who took a beating last quarter as the sector declined 21.6% year over year and are only currently expected to show a 3.7% year over year improvement in Q4 2014. This might be the reason many automakers are deciding not to advertise in this year’s Super Bowl.
Traditional advertisers like Ford Motor Company (NYSE:F), General Motors Company (NYSE:GM) and Honda Motor Co Ltd (ADR) (NYSE:HMC) have all decided to not ad in this year’s Super Bowl. The main reason cited is that the spots do create sizable awareness but do not always equate to increased vehicles sold. And given the poor performance by autos during the last two last quarters, it makes sense that the companies are cutting back on expenditures.
Here are the three advertisers to watch for this Super Bowl Sunday:
Toyota Motor Corp (ADR) (NYSE:TM)
But Toyota Motor Corp (ADR) (NYSE:TM), currently holding a Zacks Rank #2 “buy” is one of the few auto companies advertising this weekend and has purchased at least one 60-sec spot, making it the third consecutive year Toyota has advertised during the Super Bowl. Toyota is one of the few bright spots in the auto segment.
Recently, Toyota has seen increasing estimates due to a few factors: the yen versus dollar exchange rate is a positive, improved competitiveness and growth prospects, new products, and increased factory capacity.
These positives have caused estimates for Toyota to increase over the past week for Q3 2015, fiscal year 2015, Q4 2015 and fiscal year 2016. Estimates for each; Q3 2015 have increased from $2.95 to $3.16, Q4 2015 rose from $2.70 to $2.78, fiscal year 2015 jumped from $11.94 to $13.04, and fiscal year 2016 increased from $12.78 to $13.01.
Toyota Motors reports Q3 15 earnings results on Feb 3.
As you can see in the table below, Toyota Motors has seen solid price appreciation along with increasing consensus estimates.
Carnival Corporation (NYSE:CCL)
Another Super Bowl advertiser is Carnival Corporation (NYSE:CCL) a Zacks Rank #2 “buy,” which has seemingly overcome its negative image due to ship accidents a few years back by becoming BrandIndex’s Buzz Rankings #1 most improved U.S. brand in consumer perception earlier this month.
Further adding to the good news for Carnival Cruise Lines is the drop in fuel prices. Carnival is best positioned in the cruise line group to see stronger tailwinds due to the fact it only hedges 50% of its fuel costs while the industry standard is 55%. Despite the small 5% difference, the low cost of fuel will help Carnival’s bottom line more than its competitors.
Finally, for the first time in just over three years Carnival is going into 2015 with higher booked occupancy and higher booked prices than in 2014. This has caused earnings estimates for CCL stock to increase over the past 30 days for Q2 2015, fiscal year 2015 and fiscal year 2016. Q2 2015 rose from 26 cents per share to 27 cents per share, fiscal year 2015 increased from $2.52 to $2.54 and fiscal year 2016 rose from $3.24 to $3.25.
Further, Carnival has beaten the Zacks Consensus Estimate for the past four consecutive quarters with an average positive earnings surprise of 138.15%. Showing that not only does CCL stock beat earnings, CCL stock crushes them.
Carnival Cruise Lines reports Q1 2015 results on Mar. 24.
The chart below shows the price, earnings surprise and the impact a positive surprise had on the overall price of CCL stock.
L Brands Inc (NYSE:LB)
Finally, L Brands Inc (NYSE:LB) currently holding a Zacks Rank #2 “buy” has returned to advertise during the Super Bowl after a seven-year hiatus. L Brands, the owners of Victoria’s Secret, Bath & Body Works, PINK, La Senza and Henri Bendel, has confirmed one 30-second spot featuring many of the top Victoria Secret’s models.
In January, L Brands posted December sales updates, which provided a small upside to its expectations due to positive holiday sales. Further, same-store sales increased 4% overall with Bath & Body Works’ 5% increase leading the way for L Brands.
These positive data points caused the Zacks Consensus Estimates to slightly increase in the past month for Q4 2014, fiscal year 2015 and fiscal year 2016. Further, L Brands has beaten the Zacks Consensus Earnings Estimates for the past four consecutive quarters, posting an average positive earnings surprise of 4.5%. LB stock not only beats expectations but does so consistently.
L Brands next reports on Feb. 25, and as you can see in the graph below, L Brands has seen solid price appreciation and increasing estimates over the past few years.
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