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Tenet Healthcare and Skyworks Solutions have been highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – June 6, 2024 – Zacks Equity Research shares Tenet Healthcare Corp. (THC - Free Report) as the Bull of the Day and Skyworks Solutions Inc. (SWKS - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on The Williams Companies, Inc. (WMB - Free Report) , Enbridge Inc. (ENB - Free Report) and Kinder Morgan, Inc. (KMI - Free Report) .
Tenet Healthcare Corp. is an investor-owned healthcare services company that owns and operates general hospitals and related healthcare facilities for urban and rural communities in numerous states.
Its hospitals offer acute care services, operating and recovery rooms, radiology services, respiratory therapy services, clinical laboratories, pharmacies, and more.
The company's earnings outlook has become notably bright over the last several months, pushing the stock into a highly coveted Zacks Rank #1 (Strong Buy).
In addition to favorable earnings estimate revisions, the stock resides in the Zacks Medical - Hospital industry, currently ranked in the top 12% of all Zacks industries. Let's take a closer look at how the company currently stacks up.
Tenet Healthcare Posts Robust Results
The company's latest set of quarterly results blew away expectations, with shares melting higher post-earnings. Concerning headline figures, THC beat the Zacks Consensus EPS estimate by 120% and reported sales 4% ahead of expectations, representing Y/Y growth rates of 127% and 7%, respectively.
Up 80% in 2024, quarterly results have kept shares hot.
The results blew away prior guidance, with the company also upping its FY24 financial outlook – THC's adjusted EBITDA is now expected to be in a band of $3.5 - $3.7 billion, reflecting a $215 million increase from prior views.
CEO Saum Sutaria confirmed the strong results, stating, "Our operational excellence and focus on continuous improvement helped enable our momentum as we transform our company through strategic portfolio decisions, disciplined capital allocation, and debt reduction."
The company's cash-generating abilities have also seen a nice boost, with free cash flow of $346 million throughout its latest quarter jumping from the $214 million mark in the same period last year. It's also involved in a buyback program, scooping up $278 million in shares throughout its latest quarter.
Bottom Line
Investors can implement a stellar strategy to find expected winners by taking advantage of the Zacks Rank – one of the most powerful market tools that provides a massive edge.
The top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.
Tenet Healthcare would be an excellent stock for investors to consider, as displayed by its Zack Rank #1 (Strong Buy).
Skyworks Solutions Inc. designs, manufactures, and markets a broad range of high-performance analog and mixed-signal semiconductors that enable wireless connectivity. The company's products include power amplifiers (PAs), front-end modules (FEMs), radio frequency (RF) sub-systems, and cellular systems.
Analysts have taken a bearish stance on the company's outlook, pushing it into a Zacks Rank #5 (Strong Sell).
Let's take a closer look at the current state of the company.
Skyworks Solutions Shares Fall Post-Earnings
SWKS shares have struggled to find their footing year-to-date, down 16% compared to the S&P 500's impressive 12% gain. The company's latest set of quarterly results caused post-earnings selling pressure, with analysts also taking expectations lower following the release.
Earnings fell 26% year-over-year, whereas sales pulled back roughly 9%.
CEO Liam Griffin spoke on the results: "During the March quarter, in our mobile business, we saw below normal seasonal trends, with lower-than-expected end market demand. Over the long-term, we intend to leverage our connectivity technology across edge-connected IoT devices, automotive electrification and advanced safety systems, and AI infrastructure."
So, while the company remains positive from a long-term standpoint, the near-term outlook remains cloudy, reflected by the downward earnings estimate revisions. The company is in the midst of a growth cooldown, with consensus expectations for its current fiscal year suggesting a 26% pullback in earnings on 12% lower sales.
Bottom Line
Negative earnings estimate revisions from analysts paint a challenging picture for the company's shares in the near term.
Skyworks Is a Zacks Rank #5 (Strong Sell), indicating that analysts have taken a bearish stance on the company's earnings outlook.
For those seeking strong stocks, a great idea would be to focus on stocks carrying a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy) – these stocks sport a notably stronger earnings outlook paired with the potential to deliver explosive gains in the near term.
Additional content:
Nat Gas Powering AI Centers: 3 Midstream Stocks to Gain
Analysts and investors have observed that during recent earnings calls, natural gas and oil pipeline companies have addressed the rising demand for electricity driven by data centers processing AI applications. With natural gas continuing to contribute significantly to electricity generation in the United States, it is interesting to analyze how midstream energy stocks with extensive natural gas pipeline networks are poised to gain.
AI Data Centers Demand Huge Electricity
Several factors contribute to the significant electricity consumption by AI data centers. Deep learning and other AI workloads demand extensive computational power, requiring powerful processors such as Graphics Processing Units (GPUs) and Tensor Processing Units (TPUs) to perform billions of calculations during the training of large neural networks. This intense processing activity results in high electricity consumption.
Additionally, data storage systems, particularly those optimized for high-speed access and redundancy, consume substantial amounts of electricity, contributing significantly to overall energy usage.
Furthermore, high-performance processors generate considerable heat, necessitating extensive cooling systems to maintain optimal temperatures and prevent hardware damage. However, these cooling systems themselves consume a significant amount of electricity.
Natural Gas Pipeline Stocks to Gain
As the popularity of AI data centers continues to soar in the forthcoming years, the need for electricity is anticipated to multiply significantly, placing inevitable strain on the transmission grid. Consequently, to meet the increased demand for electricity, some utilities may find it necessary to invest in additional natural gas power plants. This, in turn, will drive up the demand for midstream infrastructures such as pipeline networks, essential for supplying gas to these plants.
3 Stocks in the Spotlight
Considering the backdrop, it is advisable to keep an eye on major energy companies like The Williams Companies, Inc., Enbridge Inc. and Kinder Morgan, Inc., which could be a huge beneficiary of this AI trend. Each stock presently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
With an extensive network spanning 33,000 miles, The Williams Companies operates a vast system of natural gas pipelines. As a result, WMB plays a crucial role in transporting a significant portion of the nation's natural gas to strategic regions, including areas where this resource is utilized in the production of low-carbon electricity. The Williams Companies believes that the rate at which the demand for electricity is increasing each year in this decade is three times greater than in previous decades, thanks to the rise of new, large-load data centers.
Enbridge, in its first-quarter earnings call, acknowledged the fact that there will be a material increase in demand for power generation following the expansion and development of data centers and generative AI. ENB's gas transportation business places it in a favorable position to capitalize on the opportunity, as about 45% of North America's natural gas-powered electricity generation sites are situated within 50 miles of the company's midstream assets.
Kinder Morgan foresees that by 2030, data centers will consume approximately 20% of the electricity in the United States, a significant increase from the 2.5% recorded in 2022. Given the expected reliance on natural gas for electricity generation, KMI, one of the foremost operators of natural gas pipelines in the country, is strategically positioned to benefit.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Tenet Healthcare and Skyworks Solutions have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – June 6, 2024 – Zacks Equity Research shares Tenet Healthcare Corp. (THC - Free Report) as the Bull of the Day and Skyworks Solutions Inc. (SWKS - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on The Williams Companies, Inc. (WMB - Free Report) , Enbridge Inc. (ENB - Free Report) and Kinder Morgan, Inc. (KMI - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Tenet Healthcare Corp. is an investor-owned healthcare services company that owns and operates general hospitals and related healthcare facilities for urban and rural communities in numerous states.
Its hospitals offer acute care services, operating and recovery rooms, radiology services, respiratory therapy services, clinical laboratories, pharmacies, and more.
The company's earnings outlook has become notably bright over the last several months, pushing the stock into a highly coveted Zacks Rank #1 (Strong Buy).
In addition to favorable earnings estimate revisions, the stock resides in the Zacks Medical - Hospital industry, currently ranked in the top 12% of all Zacks industries. Let's take a closer look at how the company currently stacks up.
Tenet Healthcare Posts Robust Results
The company's latest set of quarterly results blew away expectations, with shares melting higher post-earnings. Concerning headline figures, THC beat the Zacks Consensus EPS estimate by 120% and reported sales 4% ahead of expectations, representing Y/Y growth rates of 127% and 7%, respectively.
Up 80% in 2024, quarterly results have kept shares hot.
The results blew away prior guidance, with the company also upping its FY24 financial outlook – THC's adjusted EBITDA is now expected to be in a band of $3.5 - $3.7 billion, reflecting a $215 million increase from prior views.
CEO Saum Sutaria confirmed the strong results, stating, "Our operational excellence and focus on continuous improvement helped enable our momentum as we transform our company through strategic portfolio decisions, disciplined capital allocation, and debt reduction."
The company's cash-generating abilities have also seen a nice boost, with free cash flow of $346 million throughout its latest quarter jumping from the $214 million mark in the same period last year. It's also involved in a buyback program, scooping up $278 million in shares throughout its latest quarter.
Bottom Line
Investors can implement a stellar strategy to find expected winners by taking advantage of the Zacks Rank – one of the most powerful market tools that provides a massive edge.
The top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.
Tenet Healthcare would be an excellent stock for investors to consider, as displayed by its Zack Rank #1 (Strong Buy).
Bear of the Day:
Skyworks Solutions Inc. designs, manufactures, and markets a broad range of high-performance analog and mixed-signal semiconductors that enable wireless connectivity. The company's products include power amplifiers (PAs), front-end modules (FEMs), radio frequency (RF) sub-systems, and cellular systems.
Analysts have taken a bearish stance on the company's outlook, pushing it into a Zacks Rank #5 (Strong Sell).
Let's take a closer look at the current state of the company.
Skyworks Solutions Shares Fall Post-Earnings
SWKS shares have struggled to find their footing year-to-date, down 16% compared to the S&P 500's impressive 12% gain. The company's latest set of quarterly results caused post-earnings selling pressure, with analysts also taking expectations lower following the release.
Earnings fell 26% year-over-year, whereas sales pulled back roughly 9%.
CEO Liam Griffin spoke on the results: "During the March quarter, in our mobile business, we saw below normal seasonal trends, with lower-than-expected end market demand. Over the long-term, we intend to leverage our connectivity technology across edge-connected IoT devices, automotive electrification and advanced safety systems, and AI infrastructure."
So, while the company remains positive from a long-term standpoint, the near-term outlook remains cloudy, reflected by the downward earnings estimate revisions. The company is in the midst of a growth cooldown, with consensus expectations for its current fiscal year suggesting a 26% pullback in earnings on 12% lower sales.
Bottom Line
Negative earnings estimate revisions from analysts paint a challenging picture for the company's shares in the near term.
Skyworks Is a Zacks Rank #5 (Strong Sell), indicating that analysts have taken a bearish stance on the company's earnings outlook.
For those seeking strong stocks, a great idea would be to focus on stocks carrying a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy) – these stocks sport a notably stronger earnings outlook paired with the potential to deliver explosive gains in the near term.
Additional content:
Nat Gas Powering AI Centers: 3 Midstream Stocks to Gain
Analysts and investors have observed that during recent earnings calls, natural gas and oil pipeline companies have addressed the rising demand for electricity driven by data centers processing AI applications. With natural gas continuing to contribute significantly to electricity generation in the United States, it is interesting to analyze how midstream energy stocks with extensive natural gas pipeline networks are poised to gain.
AI Data Centers Demand Huge Electricity
Several factors contribute to the significant electricity consumption by AI data centers. Deep learning and other AI workloads demand extensive computational power, requiring powerful processors such as Graphics Processing Units (GPUs) and Tensor Processing Units (TPUs) to perform billions of calculations during the training of large neural networks. This intense processing activity results in high electricity consumption.
Additionally, data storage systems, particularly those optimized for high-speed access and redundancy, consume substantial amounts of electricity, contributing significantly to overall energy usage.
Furthermore, high-performance processors generate considerable heat, necessitating extensive cooling systems to maintain optimal temperatures and prevent hardware damage. However, these cooling systems themselves consume a significant amount of electricity.
Natural Gas Pipeline Stocks to Gain
As the popularity of AI data centers continues to soar in the forthcoming years, the need for electricity is anticipated to multiply significantly, placing inevitable strain on the transmission grid. Consequently, to meet the increased demand for electricity, some utilities may find it necessary to invest in additional natural gas power plants. This, in turn, will drive up the demand for midstream infrastructures such as pipeline networks, essential for supplying gas to these plants.
3 Stocks in the Spotlight
Considering the backdrop, it is advisable to keep an eye on major energy companies like The Williams Companies, Inc., Enbridge Inc. and Kinder Morgan, Inc., which could be a huge beneficiary of this AI trend. Each stock presently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
With an extensive network spanning 33,000 miles, The Williams Companies operates a vast system of natural gas pipelines. As a result, WMB plays a crucial role in transporting a significant portion of the nation's natural gas to strategic regions, including areas where this resource is utilized in the production of low-carbon electricity. The Williams Companies believes that the rate at which the demand for electricity is increasing each year in this decade is three times greater than in previous decades, thanks to the rise of new, large-load data centers.
Enbridge, in its first-quarter earnings call, acknowledged the fact that there will be a material increase in demand for power generation following the expansion and development of data centers and generative AI. ENB's gas transportation business places it in a favorable position to capitalize on the opportunity, as about 45% of North America's natural gas-powered electricity generation sites are situated within 50 miles of the company's midstream assets.
Kinder Morgan foresees that by 2030, data centers will consume approximately 20% of the electricity in the United States, a significant increase from the 2.5% recorded in 2022. Given the expected reliance on natural gas for electricity generation, KMI, one of the foremost operators of natural gas pipelines in the country, is strategically positioned to benefit.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
Zacks Investment Research
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https://www.zacks.com
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.