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 February 1st thousands will flock to Glendale Arizona from Corporate CEOs 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 1/3 of the entire population of the U.S.A.   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 is charging $4.5 million per 30-second commercial spot, or $150,000 per second.  This would represent a 12.5% increase from what Fox charged in last year’s Super Bowl.   

There are some companies that are utilizing most or all of their entire annual advertising budget, like the maker of Super Glue, Loctite (HENKY), and charging accessories maker Mophie.  These “smaller” companies are attempting to get noticed and entice new customers with their lavish ad spending.  

Some other companies have a longstanding tradition with the Super Bowl, like Anheuser-Busch inBev (BUD), Coca-Cola (KO), and McDonald's (MCD).  Yet, BUD and KO are currently a Zacks Rank #3 (Hold), and MCD is a #5 (Strong Sell) due to their 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.  

Pepsi (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 sponsoring 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% YoY improvement in Q4 14.  This might be the reason many automakers are deciding not to advertise in this year’s Super Bowl.  Traditional advertisers like Ford (F), General Motors (GM), and Honda (HMC) have all decided to not advertise in this year’s Super Bowl.  The main reason cited is that the spots do create sizable awareness, but it does 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.  

Advertisers to Watch

But Toyota Motors (TM - Analyst Report), 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 the company 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: yen vs. dollar FX exchange rate is a positive for the company, 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 15, FY 15, Q4 15, and FY 16.  Estimates for each; Q3 15 have increased from $2.95 to $3.16, Q4 15 rose from $2.70 to $2.78, FY 15 jumped from $11.94 to $13.04, and FY 16 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.

Another Super Bowl advertiser is Carnival Cruise Lines (CCL - Analyst Report) a Zacks Rank #2 (Buy) which has seemingly overcome their 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 group to see stronger tailwinds due to the fact they only hedge 50% of their fuel costs while the industry normal is 55%.  While only 5% difference, the low cost of fuel will help Carnival’s bottom line more than their competitors.  

Finally, for the first time in just over 3 years Carnival is going into 2015 with higher booked occupancy and higher booked prices than in 2014.  This has caused earnings estimates for the company to increase over the past 30 days for Q2 15, FY 15, and FY 16.  Q2 15 rose from $0.26 to $0.27, FY 15 increased from $2.52 to $2.54, and FY 16 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 do they beat earnings, but they crush them.  

Carnival Cruise Lines reports Q1 15 results on March 24th.

The chart below shows the price and EPS surprise and the impact a positive surprise had on the overall share price.  

Finally, L Brands (LB - Analyst Report), currently holding a Zacks Rank #2 (Buy), has returned to advertise during the Super Bowl after a seven-LByear hiatus.  The owners of Victoria’s Secret, Bath and Body Works, PINK, La Senza, and Henri Bendel have confirmed one 30-second spot featuring many of the top Victoria's Secret Angel models.  

In January, L Brands posted December sales updates which provided a small upside to their expectations due to positive holiday sales.  Further, same store sales increased 4% overall with Bath and Body Works' +5% increase leading the way for the company.

These positive data points caused the Zacks Consensus Estimates to slightly increase in the past month for Q4 14, FY 15, and FY 16.  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%, suggesting that the company not only beats expectations, but does it consistently.  

L Brands next reports on February 25th.

As you can see in the graph below, L Brands has seen solid price appreciation and increasing estimates over the past few years.  

Bottom Line

Many corporations are investing a large portion of their advertising budget during the Super Bowl in attempt to capture the eyes, and to then entice those eyes into buying their products.  Either with humor, beauty, or via emotions, advertising firms will be pushing every button known to get people to buy their products.  We believe that a mixture of a high Zacks Rank and a solid Super Bowl advertising campaign will put Toyota Motors, Carnival Corp, and L Brands in the hearts and minds of over 110 million viewers worldwide.