For Immediate Release
Chicago, IL – January 28, 2022 – Zacks Equity Research shares Potlach PCH as the Bull of the Day and Fisker FSR asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Apple AAPL, Mondelez MDLZ and Visa V.
Here is a synopsis of all five stocks:
Bull of the Day:
Inflation is a word that scares many investors. I am not sure why. In the grand scheme of things, inflation can be very good for the right kinds of stocks. I understand that it increases the input costs of goods across the board, but what if you are in the business of providing those inputs? Wouldn’t that be a big shot in the arm? Of course it would be.
Today’s Bull of the Day is a stock that is benefiting from a spike up in inflation. I’m talking about Zacks Rank #1 (Strong Buy) Potlach.Potlach is in the Building Products – Wood industry which ranks in the Top 4% of our Zacks Industry Rank. PotlatchDeltic (NASDAQ:PCH) is a leading Real Estate Investment Trust (REIT) that owns 1.8 million acres of timberlands in Alabama, Arkansas, Idaho, Louisiana, Minnesota and Mississippi. Through its taxable REIT subsidiary, the company also operates six sawmills, an industrial-grade plywood mill, a residential and commercial real estate development business and a rural timberland sales program.
The reason for the favorable rank is the recent positive earnings estimate revisions coming from analysts. Over the last sixty days, two analysts have increased their estimates for the current year while one has done so for next year. The bullish sentiment has bumped up our Zacks Consensus Estimate for the current year from $6.03 to $6.20 while next year’s number is up from $2.58 to $3.07.
These estimates have bumped up recently, but that was not always the case. Looking back to the first half of last year, estimates peaked then came down to Earth. A good chunk of that action can be attributed to the huge spike in lumber prices. Those prices have normalized recently, which has reeled in earnings estimates for this stock. Still, that inflationary pressure should remain a tailwind for the stock in the intermediate term.
Bear of the Day:
It does not take a rocket scientist to realize that the stock market is reeling. The Fed’s hawkish stance has put investors on edge. The bears are beginning to take control and the downside continues to frighten us in the short-term. While it won’t last forever, it is still rough to see. In a market like this, you need to look to companies with the strongest earnings trends. These stocks will stand the test of time and be able to last over the long run.
One way to find these stocks is to lean on the tried and true power of our Zacks Rank. Stocks in the good graces of our Zacks Rank have the strongest earnings trends while those with weak ranks struggle behind the pack. Today’s Bear of the Day is a stock that is not in the good graces of our Zacks Rank. I’m talking about Zacks Rank #5 (Strong Sell) Fisker.Fisker, Inc. focuses on design, development, manufacture, and sale of electric vehicles. The company was founded in 2016 and is headquartered in Manhattan Beach, California.
Fisker is in the Automotive – Domestic industry which ranks in the Bottom 38% of our Zacks Industry Rank. Currently a Zacks Rank #5 (Strong Sell), Fisker has seen some downside action in earnings estimates. Over the last thirty days, analysts have cut their estimates for next year. While the current year Zacks Consensus Estimate is off from a $1.03 loss to a $1.13 loss, next year’s number is off from a 92-cent loss to a 99-cent loss.
Additional content:
Apple's Q1 Surprise to the Upside, Visa Also Beats
Market indexes spent another afternoon in the red, after enjoying something of a Thursday morning rally on strong Q4 GDP numbers and slow improvement in jobless claims. Market participants also had several hours to digest Fed Chair Powell’s comments on tightening monetary policy upon its early March Federal Open Market Committee (FOMC) meeting, and looked like buying up oversold equities, especially among blue-chips, was the way to go.
But, as we’ve seen lately, volatility claimed the mantle again around mid-day; in fact, it wasn’t so much volatility as a straight sell-off after the early gains. The Dow has mostly spent the last few days within the 34-34.5K range, the S&P between 4.3-4.35K, while the Nasdaq continues its steady slide begun roughly two weeks ago.
The Dow finished -0.02% on the day, while the S&P stayed -10% from its all-time highs reached early this month. The Nasdaq dropped another -1.40% today, while the small-cap Russell 2000 continues to take it on the chin worse than the other indexes, -2.29% on the day.
Apple reported fiscal Q1 earnings after Thursday’s close, once again outperforming expectations on both top and bottom lines. Earnings of $2.10 per share beat the Zacks consensus of $1.89 and Apple’s year-ago quarterly EPS of $1.68. Revenues in the quarter accelerated to $123.90 billion, +11% year over year and above the $118.13 billion expected. Gross margins were a better-than-expected 43.8%, with outperformance in every category save iPad.
The largest goods producer/retailer in the world sold $71.6 billion in iPhones in the past quarter — an admirable feat in any market condition, but fairly extraordinary considering shortages in microchips. Growth in the quarter was +9%, again favorable compared to other tech companies over the same time period. Further, Apple has over $202 billion in cash on hand — more than several sovereign nations combined. Shares of AAPL are +3.4% in late trading, after falling -12.5% in 2022 so far.
International snack giant Mondelez put up a mixed Q4 earnings report after today’s closing bell, with earnings of 71 cents per share missing estimates by a penny but $7.66 billion in revenues out ahead of the $7.54 billion in the Zacks consensus. Organic revenues grew +5.2% in the quarter, beating expectations of +4.7%, but costs of goods on supply-chain issues have kept profits limited, even after having raised price points in the quarter. Shares are down -3% in late trading.
Visa shares are up +5% on its fiscal Q1 earnings report this afternoon. The credit card major — which never, ever missed earnings estimates — outpace the Zacks consensus yet again in the December quarter: earnings of $1.81 per share easily surpassed the $1.69 estimates and $1.42 per share reported in the year-ago quarter, while $7.06 billion in revenues accelerated past the $6.77 billion expected. Shares are still slightly in the red from the start of 2022.Questions or comments about this article and/or its author? Click here>>
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
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Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How to Profit from Trillions on Spending for Infrastructure >>Click to get this free reportApple Inc. (AAPL): Free Stock Analysis ReportVisa Inc. (V): Free Stock Analysis ReportFisker Inc. (FSR): Free Stock Analysis ReportPotlatch Corporation (PCH): Free Stock Analysis ReportMondelez International, Inc. (MDLZ): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchThe views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
