Yahoo Finance Hubbell and Advance Auto Parts have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – August 02, 2023 – Zacks Equity Research shares Hubbell HUBB as the Bull of the Advance Auto Parts AAP as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Walmart Inc. WMT, The Home Depot, Inc. HD and Costco Wholesale Corp. COST.
Here is a synopsis of all five stocks:
Bull of the Day:
Hubbell is a top international manufacturer of high-quality and reliable utility and electrical solutions that aid non-residential and residential construction, industrial applications, and utility applications.
The company's earnings outlook has positively improved across all timeframes over the last several months, helping land the stock into the highly-coveted Zacks Rank #1 (Strong Buy).
The company resides within the Zacks Manufacturing – Electrical Utilities industry, which is currently ranked in the top 1% of all industries thanks to positive earnings estimate revisions. As many are aware, roughly half of a stock's movement can be attributed to its group, helping to clarify the importance of targeting industries seeing bright outlooks.
Aside from the improved earnings outlook and favorable industry standing, let's take a closer look at a few other traits of Hubbell.
Hubbell
HUBB shares could attract growth-focused investors, further reflected by the Style Score of "B" for Growth. Estimates for its current fiscal year suggest 40% EPS growth in its current fiscal year (FY23) on nearly 10% higher revenues.
Shares aren't stretched regarding valuation on a relative basis, with the current 20.8X forward earnings multiple sitting just a few ticks above the 20.1X five-year median and nicely beneath 2022 highs of 24.9X.
Hubbell recently delivered quarterly results that came in above expectations, exceeding the Zacks Consensus EPS Estimate by more than 12% and reporting revenue modestly above expectations. In fact, the company has surpassed EPS expectations by an average of an impressive 20% across its last four quarters.
The company has enjoyed steady sales growth.
In addition, shares could attract income-focused investors; HUBB shares currently yield 1.4% annually paired with a sustainable payout ratio sitting at 34% of earnings. The company has also consistently boosted its payout, carrying an 8% five-year annualized dividend growth rate.
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.
Hubbell would be an excellent stock for investors to consider, as displayed by its Zack Rank #1 (Strong Buy).
Bear of the Day:
Advance Auto Parts is a leading automotive aftermarket parts provider in North America, serving both the professional installer and do-it-yourself customers.
The company's stores and branches offer a broad selection of brand names, original equipment manufacturer (OEM), and private label automotive replacement parts, accessories, batteries, and maintenance items for domestic and imported cars, vans, sport utility vehicles, and more.
Analysts have taken a bearish stance on the company's earnings outlook, pushing the stock into an unfavorable Zacks Rank #5 (Strong Sell).
Let's take a closer look at what's been happening with the company.
Advance Auto Parts
Advance Auto Parts has posted weak quarterly results as of late, falling short of earnings and revenue expectations in two of its last three releases. In its latest print, the company missed EPS estimates by more than 70% and reported revenue marginally below the consensus.
The market has consistently punished AAP shares post-earnings, with shares facing selling pressure following each of its last four prints. Down nearly 60% just over the previous year, the stock has been a bear's dream.
The company's earnings are expected to take a sizable hit, with estimates for its current fiscal year (FY23) suggesting a 58% pullback. Still, earnings growth resumes in FY24, with estimates calling for a 15% recovery in earnings on 2.3% higher revenues.
The company's next quarterly release is expected on August 22nd: the Zacks Consensus EPS Estimate of $1.59 suggests a 57% decline in earnings from the year-ago quarter, with the estimate down nearly 16% just over the last 60 days.
Further, our consensus revenue estimate for the upcoming release stands at $2.7 billion, 0.3% higher than the year-ago quarter. It's worth noting that the quarterly revenue estimate has been revised 2.3% lower since May.
Bottom Line
Negative earnings estimate revisions from analysts and weak quarterly results paint a challenging picture for the company's shares in the near term.
Advance Auto Parts 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:
3 Blue-Chip Retail Stocks for Steady Growth & Stability
Investing in the stock market can be a rewarding venture, but it comes with its fair share of risks and uncertainties. Investors must carefully assess market dynamics and craft a robust investment strategy. They should look for well-established companies with a history of success and a proven ability to weather economic downturns.
Hence, when it comes to long-term stability and consistent growth, market pundits place their bets on highly reputed companies with humongous market capitalization. These industry titans are commonly referred to as blue-chip companies. Blue-chip stocks are financially resilient, with an impressive track record of solid returns to shareholders.
These companies tend to be less susceptible to sudden stock price fluctuations. For income-oriented investors, blue-chip companies reward shareholders with regular dividend payouts, further enhancing stability.
These stalwarts possess a winning combination of established market positions, strong brand recognition, loyal customer bases and extensive market penetration. Such traits provide these companies with a distinct competitive edge and help unlock new opportunities, thus making them investor favorite.
By investing in blue-chip stocks, investors can build a well-diversified portfolio. Here we have identified three stocks from the Retail - Wholesale sector — Walmart Inc., The Home Depot, Inc. and Costco Wholesale Corp.. Thanks to successful business operations, these bellwethers have withstood multiple market gyrations and delivered returns to investors. These blue-chip stocks have balance sheet strength to tackle any untoward market volatility.
3 Prominent Picks
Walmart: The omnichannel retailer has been doing every bit to solidify its already robust market position. Walmart has been taking several e-commerce initiatives, including buyouts, alliances, and improved delivery and payment systems as well as undertaking efforts to enhance merchandise assortments. The company is innovating in the supply chain and adding capacity as well as building businesses, such as Walmart GoLocal, Walmart Connect, Walmart Luminate, Walmart+, Spark Delivery, Marketplace and Walmart Fulfillment Services.
With a market cap of $430.5 billion as of Jul 31, 2023, Walmart has a long-term earnings growth expectation of 5.5%. This Zacks Rank #2 (Buy) stock has a trailing four-quarter earnings surprise of 12%, on average. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Walmart's current financial-year sales suggests growth of 4.2% from the year-ago period. The company pays out a quarterly dividend of 57 cents ($2.28 annualized) per share, giving a 1.4% yield at the current stock price. WMT's payout ratio is 35, with a five-year dividend growth rate of 1.9%. (Check WMT's dividend history here)
Home Depot: The Atlanta, GA-based company is the world's largest home improvement specialty retailer. HD has been benefiting from ongoing investments in the One Home Depot plan. Continued strength in the Pro and DIY categories and digital momentum have been the key drivers. Its interconnected retail strategy and underlying technology infrastructure have helped boost web traffic for the past few quarters, aiding digital sales.
With a market cap of more than $335.6 billion, Home Depot has a long-term earnings growth expectation of 8.7%. This Zacks Rank #3 (Hold) stock has a trailing four-quarter earnings surprise of 1.7%, on average. The company pays out a quarterly dividend of $2.09 ($8.36 annualized) per share, giving a 2.5% yield at the current stock price. HD's payout ratio is 51, with a five-year dividend growth rate of 14.5%.
Costco: A consumer defensive stock, Costco has been surviving the market turmoil pretty well. Strategic investments, a customer-centric approach, merchandise initiatives and an emphasis on memberships have been the discount retailer's primary strengths. Costco's distinctive membership business model and pricing power set it apart from traditional players.
With a market cap of $248.5 billion, Costco has a long-term earnings growth expectation of 8.3%. This Zacks Rank #3 stock has a trailing four-quarter earnings surprise of 1.8%, on average.
The Zacks Consensus Estimate for Costco's current financial-year sales and EPS suggests growth of 6.8% and 9.7%, respectively, from the year-ago period. The company pays out a quarterly dividend of $1.02 ($4.08 annualized) per share, giving a 0.7% yield at the current stock price. COST's payout ratio is 29, with a five-year dividend growth rate of 12%.
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Walmart Inc. (WMT) : Free Stock Analysis Report
The Home Depot, Inc. (HD) : Free Stock Analysis Report
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
Advance Auto Parts, Inc. (AAP) : Free Stock Analysis Report
Hubbell Inc (HUBB) : Free Stock Analysis Report
