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TAL Education Group, Spirit Airlines, Walmart Stores, Deere & Company and Best Buy highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – August 17, 2017 – Zacks Equity Research highlightsTAL Education Group (NYSE:(TAL - Free Report) – Free Report) as the Bull of the Day Spirit Airlines (NASDAQ:(SAVE - Free Report) – Free Report)as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Walmart Stores, Inc. (NYSE:WMT – Free Report), Deere & Company (NYSE:DE – Free Report) and Best Buy Co., Inc. (NYSE:BBY – Free Report).
Chinese stocks have come into favor recently as investors have become more comfortable with the reporting. I remember the skepticism investors had over early Alibaba numbers. Are the books cooked? That skepticism carried over across the entire spectrum of Chinese ADRs. Now that these companies have been around for a few years, that skepticism is starting to fade and investors are more and more open to investing in China.
One such company is today’s Bull of the Day, TAL Education Group (NYSE:(TAL - Free Report) – Free Report). TAL Education Group, through its subsidiaries, provides K-12 after-school tutoring services in the People's Republic of China. It offers tutoring services to K-12 students covering various academic subjects, including mathematics, physics, chemistry, biology, history, geography, political science, English, and Chinese. The company also provides tutoring services primarily through small classes, including Xueersi Peiyou, Mobby, and Firstleap tutoring services, personalized premium services under Izhikang name, and online courses.
TAL has been a Zacks Rank #1 (Strong Buy) because of the estimate revisions analysts have made on this year and next year’s numbers. Two analysts have increased their estimates for the current year while three analysts have done so for next year’s numbers. The overall effect has increased our Zacks Consensus Estimate from $1.92 to $2.03 for the current year while pushing up next year’s number from $3.00 to $3.44. These numbers represent growth of 56% for the current year, accelerating to 69.18% for next year. It’s important to note that these EPS numbers have not been adjusted for yesterday’s 6 to 1 stock split.
Bear:
When oil prices were low and the US dollar was riding high, Airplane stocks were soaring. Over the last year, the industry has returned 10.6%. Lagging well behind the rest of the airline industry, down 33.9% YTD, is today’s Bear of the Day, Spirit Airlines (NASDAQ:(SAVE - Free Report) – Free Report).
Spirit Airlines, Inc. provides low-fare airline services. As of February 7, 2017, it operated approximately 420 daily flights to 59 destinations in the United States, the Caribbean, and Latin America. As of December 31, 2016, the company had a fleet of 95 Airbus single-aisle aircraft comprising 29 A319s, 45 A320ceos, 5 A320neos, and 16 A321ceos. It offers tickets through its call centers and airport ticket counters, as well as online through www.spirit.com; and through various third parties, including online, traditional travel agents, and electronic global distribution systems.
Spirit Airlines is a Zacks Rank #5 (Strong Sell) because of multiple earnings estimate revisions to the downside. Over the last thirty days, eight analysts have dropped their EPS estimates for the current year while seven analysts have dropped their estimates for next year. The overall impact has cut down the Zacks Consensus Estimate for the current year from $4.21 to $3.68. Next year’s consensus has plummeted from $4.88 to $4.26. Based on these revisions, the current year EPS is slated to contract 10.82%.
That’s the bad news, the good news is that next year the company should return to EPS growth, with 15.57% year-over-year numbers projected. Revenue growth this year should come in around 15.86% in the face of the EPS contraction.
Not enough to convince investors to support the current share price though. After failing to break through the $60 level in May 2017 shares have been in a freefall. Following the most recent earnings report shares have gapped down and sold off under $40. The 50-day moving average looms above as overhead resistance around $48.
Additional content:
Earnings Season Not Over: 3 Stocks That Could Still Beat Estimates
Second-quarter earnings season is wrapping up, and results have—once again—proven to be relatively strong across the board. Sure, certain industries are struggling, but the economy appears to be healthy and our major indexes are continuing to hover near all-time highs.
With that said, there’s obviously been plenty of positive earnings surprises that have led to skyrocketing share prices. But if you’re worried that you missed out on a chance to profit from an earnings beat, have no fear—earnings season isn’t over just yet.
Luckily, we can use the Zacks Earnings ESP to gauge whether a company is poised to beat earnings estimates. Earnings ESP (Expected Surprise Prediction) looks to find earnings surprises by focusing on the most recent analyst revisions.
This is done because, generally speaking, if an analyst reevaluates their earnings estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.
When combining a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks have produced a positive earnings about 70% of the time. Want to target stocks that are more likely to beat estimates before Q2 reporting season is over? Check out these three companies that have yet to report:
Walmart has been pumping a ton of cash into revamping its stores and expanding its e-commerce business. Therefore, it will likely face tough year-over-year comparisons this quarter. In fact, the current Zacks Consensus Estimate is calling for earnings of $1.07 per share, which would represent a decline of nearly 0.5% from the year-ago quarter.
However, analyst sentiment has been improving recently, and the Most Accurate Estimate currently sits a penny higher—giving Walmart a positive Earnings ESP of 0.94%. Combined with the stock’s Zacks Rank #2 (Buy), this should give investors additional confidence heading into its earnings announcement on Thursday morning.
Best known for its line of John Deere agricultural equipment, Deere & Company is scheduled to release its fiscal third-quarter earnings on Friday morning. The Zacks Consensus Estimate is currently calling for earnings of $1.95 per share—a nearly 26% increase from the prior-year result. Deere & Company has also surpassed the Zacks Consensus Estimate by an average of over 70% in each of the trailing four quarters.
Analyst sentiment is strong heading into the report, as we’ve seen three positive estimate revisions in just the past seven days. Additionally, the Most Accurate Estimate sits at $1.98 per share, which gives Deere & Company a positive Earnings ESP of 1.54%. This fact, along with the stock’s Zacks Rank #2 (Buy) and the company’s strong earnings surprise history, should have investors more confident about the chances of a beat.
The retail sector has had a tough earnings season, but Best Buy has proven its ability to fend off competition from the likes of Amazon recently. In fact, the company has surpassed consensus estimates by an average of nearly 34% in each of the last four quarters. This quarter, the Zacks Consensus Estimate is calling for earnings of $0.63 per share, which would represent year-over-year growth of just over 10%.
Best Buy is scheduled to announce its earnings results before the market opens on August 29, and heading into the report, the company is sporting a positive Earnings ESP of 1.59%. The stock also has an “A” grade for Value in our Style Scores system, and its Zacks Rank #2 (Buy) is looking strong as we approach its report date.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaries," but that should still leave plenty of money for regular investors who make the right trades early.See Zacks' 3 Best Stocks to Play This Trend >>
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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 analyst 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.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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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TAL Education Group, Spirit Airlines, Walmart Stores, Deere & Company and Best Buy highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – August 17, 2017 – Zacks Equity Research highlightsTAL Education Group (NYSE:(TAL - Free Report) – Free Report) as the Bull of the Day Spirit Airlines (NASDAQ:(SAVE - Free Report) – Free Report)as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Walmart Stores, Inc. (NYSE:WMT – Free Report), Deere & Company (NYSE:DE – Free Report) and Best Buy Co., Inc. (NYSE:BBY – Free Report).
Here is a synopsis of all three stocks:
Bull of the Day:
Chinese stocks have come into favor recently as investors have become more comfortable with the reporting. I remember the skepticism investors had over early Alibaba numbers. Are the books cooked? That skepticism carried over across the entire spectrum of Chinese ADRs. Now that these companies have been around for a few years, that skepticism is starting to fade and investors are more and more open to investing in China.
One such company is today’s Bull of the Day, TAL Education Group (NYSE:(TAL - Free Report) – Free Report). TAL Education Group, through its subsidiaries, provides K-12 after-school tutoring services in the People's Republic of China. It offers tutoring services to K-12 students covering various academic subjects, including mathematics, physics, chemistry, biology, history, geography, political science, English, and Chinese. The company also provides tutoring services primarily through small classes, including Xueersi Peiyou, Mobby, and Firstleap tutoring services, personalized premium services under Izhikang name, and online courses.
TAL has been a Zacks Rank #1 (Strong Buy) because of the estimate revisions analysts have made on this year and next year’s numbers. Two analysts have increased their estimates for the current year while three analysts have done so for next year’s numbers. The overall effect has increased our Zacks Consensus Estimate from $1.92 to $2.03 for the current year while pushing up next year’s number from $3.00 to $3.44. These numbers represent growth of 56% for the current year, accelerating to 69.18% for next year. It’s important to note that these EPS numbers have not been adjusted for yesterday’s 6 to 1 stock split.
Bear:
When oil prices were low and the US dollar was riding high, Airplane stocks were soaring. Over the last year, the industry has returned 10.6%. Lagging well behind the rest of the airline industry, down 33.9% YTD, is today’s Bear of the Day, Spirit Airlines (NASDAQ:(SAVE - Free Report) – Free Report).
Spirit Airlines, Inc. provides low-fare airline services. As of February 7, 2017, it operated approximately 420 daily flights to 59 destinations in the United States, the Caribbean, and Latin America. As of December 31, 2016, the company had a fleet of 95 Airbus single-aisle aircraft comprising 29 A319s, 45 A320ceos, 5 A320neos, and 16 A321ceos. It offers tickets through its call centers and airport ticket counters, as well as online through www.spirit.com; and through various third parties, including online, traditional travel agents, and electronic global distribution systems.
Spirit Airlines is a Zacks Rank #5 (Strong Sell) because of multiple earnings estimate revisions to the downside. Over the last thirty days, eight analysts have dropped their EPS estimates for the current year while seven analysts have dropped their estimates for next year. The overall impact has cut down the Zacks Consensus Estimate for the current year from $4.21 to $3.68. Next year’s consensus has plummeted from $4.88 to $4.26. Based on these revisions, the current year EPS is slated to contract 10.82%.
That’s the bad news, the good news is that next year the company should return to EPS growth, with 15.57% year-over-year numbers projected. Revenue growth this year should come in around 15.86% in the face of the EPS contraction.
Not enough to convince investors to support the current share price though. After failing to break through the $60 level in May 2017 shares have been in a freefall. Following the most recent earnings report shares have gapped down and sold off under $40. The 50-day moving average looms above as overhead resistance around $48.
Additional content:
Earnings Season Not Over: 3 Stocks That Could Still Beat Estimates
Second-quarter earnings season is wrapping up, and results have—once again—proven to be relatively strong across the board. Sure, certain industries are struggling, but the economy appears to be healthy and our major indexes are continuing to hover near all-time highs.
With that said, there’s obviously been plenty of positive earnings surprises that have led to skyrocketing share prices. But if you’re worried that you missed out on a chance to profit from an earnings beat, have no fear—earnings season isn’t over just yet.
Luckily, we can use the Zacks Earnings ESP to gauge whether a company is poised to beat earnings estimates. Earnings ESP (Expected Surprise Prediction) looks to find earnings surprises by focusing on the most recent analyst revisions.
This is done because, generally speaking, if an analyst reevaluates their earnings estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.
When combining a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks have produced a positive earnings about 70% of the time. Want to target stocks that are more likely to beat estimates before Q2 reporting season is over? Check out these three companies that have yet to report:
1. Walmart Stores, Inc. (NYSE:WMT – Free Report)
Walmart has been pumping a ton of cash into revamping its stores and expanding its e-commerce business. Therefore, it will likely face tough year-over-year comparisons this quarter. In fact, the current Zacks Consensus Estimate is calling for earnings of $1.07 per share, which would represent a decline of nearly 0.5% from the year-ago quarter.
However, analyst sentiment has been improving recently, and the Most Accurate Estimate currently sits a penny higher—giving Walmart a positive Earnings ESP of 0.94%. Combined with the stock’s Zacks Rank #2 (Buy), this should give investors additional confidence heading into its earnings announcement on Thursday morning.
2. Deere & Company (NYSE:DE – Free Report)
Best known for its line of John Deere agricultural equipment, Deere & Company is scheduled to release its fiscal third-quarter earnings on Friday morning. The Zacks Consensus Estimate is currently calling for earnings of $1.95 per share—a nearly 26% increase from the prior-year result. Deere & Company has also surpassed the Zacks Consensus Estimate by an average of over 70% in each of the trailing four quarters.
Analyst sentiment is strong heading into the report, as we’ve seen three positive estimate revisions in just the past seven days. Additionally, the Most Accurate Estimate sits at $1.98 per share, which gives Deere & Company a positive Earnings ESP of 1.54%. This fact, along with the stock’s Zacks Rank #2 (Buy) and the company’s strong earnings surprise history, should have investors more confident about the chances of a beat.
3. Best Buy Co., Inc. (NYSE:BBY – Free Report)
The retail sector has had a tough earnings season, but Best Buy has proven its ability to fend off competition from the likes of Amazon recently. In fact, the company has surpassed consensus estimates by an average of nearly 34% in each of the last four quarters. This quarter, the Zacks Consensus Estimate is calling for earnings of $0.63 per share, which would represent year-over-year growth of just over 10%.
Best Buy is scheduled to announce its earnings results before the market opens on August 29, and heading into the report, the company is sporting a positive Earnings ESP of 1.59%. The stock also has an “A” grade for Value in our Style Scores system, and its Zacks Rank #2 (Buy) is looking strong as we approach its report date.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaries," but that should still leave plenty of money for regular investors who make the right trades early.See Zacks' 3 Best Stocks to Play This Trend >>
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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 analyst 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.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
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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.