E*TRADE, Bunge, Facebook, Alphabet and Twitter as Zacks Bull and Bear of the Day

For Immediate Release         

Chicago, IL – February 21, 2018 – Zacks Equity Research highlights E*TRADE Financial Corporation ETFC as the Bull of the Day and Bunge Limited BG as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Facebook FB, Alphabet GOOGL and Twitter TWTR.

Here is a synopsis of all five stocks:

Bull of the Day:

Founded in 1982 and headquartered in New York City, E*TRADE Financial Corporation provides online brokerage and related products and services primarily to individual retail investors.

The company IPO’d in 1996 and currently has 30 retail branches across the US and approximately 3,600 employees. They also operate a bank primary for maximizing the value of deposits generated through brokerage business.

Better-than-expected Results

The company reported Q4 adjusted earnings of 64 cents per share, beating the Zacks Consensus Estimate of 62 cents. Net revenue for the reported quarter came in at $637 million, also ahead of the Zacks Consensus Estimate of $633 million, and up 25.1% from the year-ago quarter.

“The fourth quarter results we delivered placed an exclamation mark on an exceptional year, and I am extremely proud of what the team accomplished. Amid a fiercely competitive environment, and unprecedented markets, we were able to stay focused on our efforts and drive results for shareholders,” said the CEO.

The brokerage also announced a definitive agreement to acquire more than one million retail brokerage accounts with $18 billion in customer assets from Capital One Financial Corporation for a price of $170 million.

Excellent Industry Outlook

Investors and traders now increasingly prefer digital platforms for trading. Per ETFC, the direct space now represents more than 20% of the total brokerage industry. With cutting edge technology and continued innovation, digital brokerages may continue to gain market share.

E*TRADE’s digital platform is further complemented by professional advice and support provided by 24/7 customer service and over 300 financial consultants available via phone or at branches.

Rising Estimates

Analysts have been raising their estimates for the company after better-than-expected results. Zacks Consensus Estimates for the current and next year have increased to $3.25 share and $3.68 per share from $2.62 and $2.95 respectively, 60 days back.

Bear of the Day:

Headquartered in White Plains, NY, Bunge Limited is a leading agribusiness and food company with integrated operations all over the world. It is a global leader in oilseed processing, and grain & oilseed marketing. The company has five business segments: Agribusiness, Edible Oil Products, Milling Products, Sugar and Bioenergy, and Fertilizer.

The company IPO’d in 2001 and has expanded though many significant acquisitions since then.

Disappointing Fourth Quarter Results

The company reported a GAAP loss of 48 cents per share for the fourth quarter due to charges related to restructuring and tax reform

Adjusted earnings of 67 cents per share, missing the Zacks Consensus Estimate of $1.48. Their Agribusiness division was impacted by weak margins whereas Sugar & Bioenergy was hurt by adverse weather.

"While industry headwinds persisted through the end of the year, we made good progress in 2017 towards our strategic objectives by taking proactive steps to improve our cost structure and create a more balanced business, said the CEO.

“Fourth quarter oilseed margins did not recover as quickly as expected, and sugarcane milling results were negatively impacted by a sustained period of rain late in the quarter.”

Falling Estimates

Analysts have been slashing their estimates for the company after weak results. Zacks Consensus Estimates for the current and next year have fallen to $4.16 per share and $5.05 per share from $4.53 and $5.39 respectively, 30 days back.

The Bottom Line

Farmers and agribusinesses have been struggling due to bumper crops over the past few years.

As the company generates most of its revenues from its Agribusiness segment, it remains vulnerable to commodity price, weather and foreign exchange trends. Further the company does not have any pricing power and operates on thin margins.

Additional content:

Despite Russia Woes, Facebook (FB) Remains a Buy

Facebook has found itself in the news for all the wrong reasons over the last few days as Special Counsel Robert Mueller and his team release more information regarding their investigation into Russian interference with the 2016 U.S. Presidential election.

Still, as the social media giant stares down what could prove to be a prolonged period of heightened scrutiny and possible government regulation, its stock seems highly enticing.

Last Friday, Mueller indicted 13 Russian nationals and three Russian groups for interfering with the 2016 U.S. elections, with the purchasing of ads on Facebook being one of many illicit activities mentioned (also read: Mueller Indicts 13 Russians Linked to Facebook & Twitter Ads).

Then, over the weekend, Facebook advertising executive Rob Goldman drew attention for a series of tweets that pointed to a much broader Russian goal of interfering with the American democratic process in general—which Facebook later noted reflected only his personal opinion.

Mueller’s Russian investigation will likely reveal far more information and could have wide-ranging implications far beyond Facebook. But Mark Zuckerberg’s firm is also not alone, and the Mueller investigation has also pointed to attempts by Russians to use Alphabet’s YouTube, Twitter and Instagram to sway U.S. public opinion, dating back to 2014.

“We already have about 10,000 people working on safety and security, and we're planning to double that to 20,000 in the next year to better enforce our Community Standards and review ads,” Zuckerberg said in a recent statement.

With that said, let’s take a look at why Facebook is still a stock to consider buying even as the Mueller investigation heats up.

Why Buy Facebook

Investor should think of Facebook with one word in mind: advertising. Advertising accounted for 98.5% of the company’s $12.972 billion Q4 revenues. The average price per ad on Facebook rose by 43% last quarter, and as advertisers find it increasingly hard to reach users via television and print, this number could climb even higher.

Going forward, Facebook investors should note that the social media giant is expected to account for 11.3% of all U.S. advertising spending in 2019, passing the entire print category, according to a recent eMarketer report.

Facebook has never been more trafficked or profitable, especially as it grows outside of the U.S. For instance, the world’s second largest country, India, is experiencing a mobile phone and internet boom.

Aside from its user base and advertising reach, Facebook currently presents shareholders with a ton of bang for their buck. At the moment, Facebook is trading at 24.37x earnings, which marks the cheapest price investors have ever been able to buy the social media giant’s stock in its history. While this could mean that enough investors think that Facebook’s growth-fueled glory days are over, expansion does seem to be in the cards for the foreseeable future.

The company is projected to see its sales surge nearly 42% in the current quarter, based on our current Zacks Consensus Estimates. Looking ahead to the rest of fiscal 2018, Facebook is expected to see its revenues hit $55.41 billion, which would mark a 36% year-over-year jump. The company is also projected to expand its bottom-line by nearly 17%.

Furthermore, Facebook has witnessed 17 earnings estimate revisions with 100% agreement to the upside for 2018, as well as ten upward estimates for the following year. The firm is expected to see its earnings expand at a strong annualized rate of 26.51% over the next three to five years.

Facebook is currently a Zacks Rank #1 (Strong Buy) and boasts “B” grades for both Growth and Momentum in our Style Scores system. And due to the recent market-wide selloff, shares of Facebook rest nearly 10% below their 52-week high, which means investors might consider scooping up the social media power while some have ditched the stock.

Can Hackers Put Money INTO Your Portfolio?

Earlier this month, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.

Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.

Download the new report now>>

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.

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Facebook, Inc. (FB) : Free Stock Analysis Report
 
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
 
Twitter, Inc. (TWTR) : Free Stock Analysis Report
 
E*TRADE Financial Corporation (ETFC) : Free Stock Analysis Report
 
Bunge Limited (BG) : Free Stock Analysis Report
 
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