D&B Jumps to Strong Buy - Analyst Blog

By Zacks | January 04, 2013 AAA

On January 3, Zacks Investment Research upgraded Dun & Bradstreet Corp (DNB) to a Zacks #1 Rank (Strong Buy). Why the Upgrade?

The company reported upbeat third quarter 2012 results wherein both top and bottom lines beat the Zacks Consensus Estimate. Moreover, D&B delivered positive earnings surprises in 3 of the last 4 quarters with an average earnings beat of 4.9%. The long-term expected earnings growth rate for this stock is 12.9%.

D&B's third quarter earnings per share of $1.76 was ahead of the Zacks Consensus Estimate of $1.60 and increased 23.9% from the year-ago quarter aided by lower costs and solid margin expansion.

The company also reiterated its fiscal 2012 guidance of an earnings growth of 8% to 11%.

The Zacks Consensus Estimate of $6.97 for fiscal 2012 indicates that the reported earnings are expected to be in the high end of the guidance range.  Moreover, the Zacks Consensus Estimate represents a 9% year-over-year increase in fourth quarter earnings to $2.41 a share.

Going forward, D&B's initiatives in the Data-as-a-Service (DaaS) segment, which enables customers to use D&B's data through their Customer Relationship Management platform, will be a great positive. Partnerships with salesforce.com (CRM), Microsoft (MSFT) and Oracle (ORCL) in this segment are also expected drive growth for D&B. The products that are expected to be in focus include the MaxCV data platform and B2B trade portal. MaxCV is expected to accelerate revenue growth and reduce expenses for customers by improving data quality and timeliness, increasing the speed of product innovation and significantly reducing technology costs.

Other Stocks to Consider

The following companies in the sector also have favorable Zacks Ranks and are therefore worth considering.

1) Arbitron Inc. (ARB) carries a Zacks #2 Rank (Buy)

2) LifeLock, Inc. (LOCK) has a Zacks #2 Rank (Buy)

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