Yahoo Finance Chipotle and Kohl's have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – May 3, 2023 – Zacks Equity Research shares Chipotle CMG as the Bull of the Day and Kohl’s KSS as the Bear of the Day. In addition, Zacks Equity Research provides analysis on New Jersey Resources Corp. NJR, NiSource Inc. NI and Vistra Corp. VST.
Here is a synopsis of all five stocks.
Bull of the Day:
Today’s Bull of the Day is a stock that used to be one of the best long-term performers who had a fall from grace. But recently, there has been a resurrection. Increased earnings and revenue growth has led to a return near the top. Is now the time to load back up on this early Fast Casual Restaurant pioneer?
The Bull of the Day is Chipotle. The fast-casual dining industry has been experiencing robust growth in recent years, driven by consumers' desire for healthier and more customizable meal options. Chipotle is well-positioned within this industry, offering a unique menu that caters to various dietary preferences and health-conscious customers. This competitive advantage sets Chipotle apart from its rivals and provides a solid foundation for future growth.
The stock is a Zacks Rank #1 (Strong Buy). The reason for the favorable Zacks Rank is the recent upside earnings estimate revisions coming from analysts following a big earnings beat. Last quarter’s EPS number came in $1.61 or 18.1% better than expectations. That prompted no fewer than 11 analysts to up the ante on their current year EPS estimates. That has also resulted in 9 analysts doing the same for next year. The bullish moves have pushed up our Zacks Consensus Estimate for the current year from $41.38 to $43.38 while next year’s number is up from $50.30 to $52.14.
Chipotle has ambitious expansion plans, aiming to open new locations and increase its market presence. The company has also been testing new menu items and exploring innovative initiatives, such as its recent venture into the world of virtual kitchens. These efforts are expected to drive further growth and enhance the company's profitability in the long run.
Bear of the Day:
Today’s Bear of the Day is a stock that has been with several headwinds. An intensely competitive retail landscape, with both online and brick-and-mortar giants vying for market share, the rise of e-commerce platforms like Amazon and the resurgence of competitors like Walmart and Target have put significant pressure on today’s Bear of the Day, Kohl’s.
Kohl's is a leading retail company that has been facing some challenges lately. While Kohl's has shown resilience in the past, there are several factors that suggest caution for investors considering the stock in the short term.
Kohl's earnings performance has been inconsistent in recent quarters, with the company missing consensus EPS estimates in some instances. This uneven financial track record raises concerns about the company's ability to navigate the challenges it faces and deliver stable results for investors.
Over the last sixty days, 4 analysts have cut their earnings expectations for the current year while three have done so for last year. The bearish move has dropped our Zacks Consensus Estimates for the current year from $3.20 to $2.35 while next year’s number is off from $3.23 to $2.85. That is the reason why the company is currently a Zacks Rank $5 (Strong Sell) as estimates continue to come under pressure.
Kohl’s is in the Retail – Regional Department Stores Industry which ranks in the Bottom 6% of our Zacks Industry Rank. There are currently no stocks within this industry which are in the good graces of our Zacks Rank.
Additional content:
3 Utility Stocks to Add to Your Portfolio as Volatility Grips the Markets
Volatility has gripped markets as fears of an imminent recession continue to dent investors’ confidence. Fears escalated further on May 1, following the failure of First Republic Bank last week.
The Fed had to intervene and forcibly auction the bank, with JP Morgan Chase emerging the winner over the weekend auction. Despite the takeover, the collapse of First Republic Bank has ignited fresh fears that the crisis could balloon and spread to other midsized banks.
This comes as the Fed gears up for another round of interest rate hikes this week, with investors reeling under fears of the economy slipping into a recession. The Fed had already indicated that rate hikes would continue for a long period than earlier expected to fight multi-decade high inflation.
It would thus be prudent to invest in defensive stocks like utilities with a favorable Zacks Rank. These are likely to strengthen one’s portfolio.
Markets Volatile on Multiple Fears
Fresh fears over the stability of the U.S. financial sector gripped markets following the collapse of First Republic Bank, the third casualty of the biggest financial crisis since 2008.
The Fed intervened and all the deposits of the troubled lender and most of its assets were acquired by JP Morgan Chase. Yet, market participants have been reeling under fears that the crisis could spread to other midsized banks.
This sparked fears among depositors who fled regional banks, leading to a selloff in shares of several regional banks. The financial sector weighed on the broader markets, with the Dow, the S&P 500 and the Nasdaq all ending in negative territory.
Investors are already worried that further rate hikes, which are going to make borrowing expensive, could now push the economy into a recession. The Fed is expected to increase interest rates by another 25 basis points on May 3, its tenth straight interest rate hike in just over a year.
Investments in utility stocks would thus be safe in this situation. The utilities sector is fundamentally sound and mature, considering that demand for these services is often resistant to changes in the economic cycle. These companies provide necessary services that are always in demand, such as telecommunications, energy, gas and water.
This means that including companies from the utility basket often increases a portfolio's resilience in a tumultuous market situation. The sector is also known for the stability and transparency of its cash flows and profitability.
Moreover, utilities are mostly low-beta stocks (beta >0 but <1). Given this situation, investing in low-beta stocks with a high dividend yield and a favorable Zacks Rank may be the best option.
Our Picks
We have narrowed our search to four low-beta utility stocks that are regular dividend payers. These stocks have seen positive earnings estimate revisions within the last 60 days. Each of our picks carries a Zacks Rank #1 (Strong Buy) or #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
New Jersey Resources Corp. is an energy services holding company that, through its subsidiaries, provides safe and reliable natural gas and clean energy services, including transportation, distribution, asset management and home services. NJR operates through four segments: Natural Gas Distribution, Clean Energy Ventures, Energy Services, and Storage and Transportation.
New Jersey Resources has an expected earnings growth rate of 5.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.1% over the last 60 days. NJR carries a Zacks Rank #2. New Jersey Resourceshas a beta of 0.65 and a current dividend yield of 3.02%.
NiSource Inc. is an energy holding company and, together with its subsidiaries, provides natural gas, electricity and other products and services in the United States. NI’s operating subsidiaries deliver energy to roughly 4 million customers in seven states — Ohio, Pennsylvania, Virginia, Kentucky, Maryland, Indiana and Massachusetts.
NiSource has an expected earnings growth rate of 6.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.3% over the last 60 days. NI carries a Zacks Rank #2. NiSource has a beta of 0.47 and a current dividend yield of 3.51%.
Vistra Corp. offers electricity and power generation, distribution and transmission solutions. VST is based in Dallas, TX.
Vistra has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.8% over the last 60 days. VST sports a Zacks Rank #1. Vistrahas a beta of 0.97 and a current dividend yield of 3.31%.
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NiSource, Inc (NI) : Free Stock Analysis Report
Kohl's Corporation (KSS) : Free Stock Analysis Report
Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report
NewJersey Resources Corporation (NJR) : Free Stock Analysis Report
Vistra Corp. (VST) : Free Stock Analysis Report
