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The Zacks Analyst Blog Highlights: ARM Holdings, BASF SE and TOTAL S.A.

For Immediate Release

Chicago, IL – March 14, 2016 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include ARM Holdings plc (ARMH), BASF SE (BASFY) and TOTAL S.A. (TOT).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Friday’s Analyst Blog:

Stronger Euro Bad News for These Stocks

The Euro was the centre of attention yesterday, riding volatility as the European Central Bank’s ("ECB") dramatic moves unfolded.

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True to its earlier commitment to do "whatever it takes" to boost the European economy with easy money, ECB President Mario Draghi announced a slew of bold expansionary measures.

The ECB cut its main refinancing rate to zero yesterday, down from 0.05%, while moving its bank deposit rate farther into the negative territory. The deposit rate is now -0.4%, down from -0.3%.

Additionally, the ECB announced an expansion of its quantitative easing (QE) asset-buying program to €80 billion per month from €60 billion, and included non-bank corporate debt in the bond buying program.

These moves, called “bazooka” by some, were somewhat more extreme than the market was expecting.

The euro, hovering near the three-week high that it hit overnight after the ECB measures, was riding on Draghi’s statement that implied that the bank did not expect to cut rates further. The statement also deepened concerns that European and Japanese policymakers were running out of ammunition with which to increase inflation and weaken their currencies.

In these unusual times, when dollar strength has emerged as a persistent headwind for American companies, investors should be very attentive toward such developments in major currencies.

Here we discuss some companies that are based outside the U.S., which have a direct exposure to the Euro and could be hurt by Euro appreciation. These companies have a Zacks Rank #4 (Sell) or a Zacks Rank #5 (Strong Sell), and have also been witnessing bearish analyst sentiment in recent times.

U.K.-based ARM Holdings plc (ARMH) designs microprocessors, physical intellectual property, and related technology and software. ARM Holdings’ microchip designs cater to the global processor market for smartphones. However, in addition to macroeconomic uncertainties and slowing global growth, another challenge that this Zacks Rank #4 stock may have to deal with is a strengthening Euro.

The company is also seeing negative analyst estimate revisions, which have led to the current year Zacks Consensus Estimate falling from $1.38 per share to $1.29 over the past month.

Headquartered in Germany, BASF SE (BASFY) operates as a chemical company globally. The company’s earnings are being pressured by low earnings from its oil and gas and basic chemicals divisions, leading to lower expectations for sales and profitability in the current year. A stronger Euro builds on top of these existing headwinds, suggesting grim prospects for this Zacks Rank #5 stock.

Also, BASF has recently seen a downtrend in the Zacks Consensus Estimate for 2016, which has fallen to $4.69 per share from $4.97 over the past month.

Another company that fits the screen is TOTAL S.A. (TOT), based in Paris, France. The company operates as an oil and gas company globally through three segments: Upstream, Refining & Chemicals, and Marketing & Services. The company has been grappling with sinking oil prices and the global supply glut, and a strengthening Euro adds to this Zacks Rank #4 stock’s burdens.

It seems that analysts have also turned sour on the company. The current year Zacks Consensus Estimate of this company has fallen from $3.22 per share to $2.97 over the past month.

So instead of playing the usual wait-and-watch game, why not safeguard our portfolio beforehand by getting rid of these vulnerable stocks?

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About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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ARM HOLDNGS ADR (ARMH): Free Stock Analysis Report
 
BASF SE (BASFY): Free Stock Analysis Report
 
TOTAL FINA SA (TOT): Free Stock Analysis Report
 
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