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Ternium, Virgin Galactic, Moderna, Pfizer and Johnson & Johnson highlighted as Zacks Bull and Bear of the Day

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For Immediate Release

Chicago, IL – November 18, 2020 – Zacks Equity Research Shares of Ternium S.A. (TX - Free Report) as the Bull of the Day, Virgin Galactic Holdings, Inc. (SPCE - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Moderna, Inc. (MRNA - Free Report) , Pfizer Inc. (PFE - Free Report) and Johnson & Johnson (JNJ - Free Report) .

Here is a synopsis of all five stocks:

Bull of the Day:

When the market is red hot, it’s typically the higher beta names that benefit. Risk appetite returns and folks have no problem adding some speculative names. Naturally, I expect to see these high-fliers in high tech, cutting-edge growth industries. I don’t expect to find them in such boring old industries as steel.

Well, today’s Bull of the Day just so happens to be in the Steel – Producers industry. It’s Zacks Rank #1 (Strong Buy) Ternium. Ternium S.A., through its subsidiaries, manufactures and processes various steel products in Mexico, Argentina, Paraguay, Chile, Bolivia, Uruguay, Brazil, the United States, Colombia, Guatemala, Costa Rica, Honduras, El Salvador, and Nicaragua. It operates in two segments, Steel and Mining. 

In addition to the favorable Zacks Rank, Ternium also features a Zacks Value Style Score of A, Growth of B, and Momentum of B to help it round out with a VGM Composite Score of A.

A monster quarterly report helped analysts push up their earnings estimates for the company. Over the last thirty days, three analysts have increased their estimates for the current year and next year. The bullish moves have increased our Zacks Consensus Estimates for the current year from 57 cents to $1.65 while next year’s number is up from $1.88 to $4.33. Last quarter’s 61 cents EPS handily beat expectations calling for just 23 cents. Over the last three quarters, Ternium has at least doubled estimates. This is a big reason why analysts all over Wall Street have become so bullish on the stock.

The stock bottomed out at $9.59 on March 19th. Since then, shares have risen over 150% to the $25.49 level it trades at today. For only the third time since 2016, Ternium shares saw a Golden Cross happen, as the 50-day crossed over the 200-day. Last time, in early 2020 was a bit of a dud. However, the 2016 cross happened in April 2016 with the stock trading in the $17s. The stock topped out over $40 before the bullish run ended in late 2018.

Bear of the Day:

Before the pitchforks are pulled out on me for this one, I want to specify what it is we try to accomplish here with our Bear of the Day. This is not a “hit piece” nor is it a smear campaign against this stock. All I do here is point out stocks which have seen earnings estimates retreat as of late. This may be of concern for some folks out there, or it could be a total non-issue. I am not here to make up your mind either way on the subject, just point out something we are seeing in our database.

Today’s Bear of the Day is crowd favorite Virgin Galactic. Virgin Galactic, an integrated aerospace company, develops human spaceflight for private individuals and researchers in the United States. It also manufactures air and space vehicles. The company's spaceship operations include commercial human spaceflight, flying commercial research, and development payloads into space. In addition, it engages in the design and development, manufacturing, ground and flight testing, and post-flight maintenance of spaceflight vehicles.

Virgin Galactic is a Zacks Rank #5 (Strong Sell). What is the reason for the unfavorable rank? Analysts all over Wall Street cutting their earnings estimates. Over the last thirty days, three analysts have cut their current year earnings estimates while two have followed suit for next year. The bearish moves have dropped the current year Zacks Consensus Estimate to a $1.26 loss, worse than the $1.05 loss previous forecast. Next year’s numbers have fluctuated a bit, going from a 58-cent loss ninety days ago to a 65-cent loss, back up to 50 cents, now at 54 cents.

Next year is when things could get very good for the company. With space flights set to commence, next year’s revenue is forecast to come in over $50 million. Just to put that in some perspective here, the current market cap of the company is $4.9 billion…with a B. As revenues ramp up in the coming years, you should expect this valuation to reel in considerably. It just feels a bit nebulous as to how much you should be willing to pay for that future growth as far away as it is in this budding industry.  

The Aerospace – Defense industry currently ranks in the Bottom 11% of our Zacks Industry Rank.

Additional content:

3 Stocks to Win Big as Race for Coronavirus Vaccine Heats Up

The relentless rise in new coronavirus infections in the United States raised a lot of concern among health officials, with several states adding restrictions. What’s more, states like Minnesota, Tennessee and Alabama recently reported a staggering number of death cases in a single day, bolstering the requirement of a vaccine to curb the spread of the deadly virus.

No doubt, several drug manufacturing companies, including biotech firms, are striving to come up with a cure by conducting extensive clinical trials. It’s worth mentioning that to develop and distribute a vaccine in the retail market, it takes almost a decade. But given the gravity of the scenario, the race toward a coronavirus vaccine at the earliest has certainly picked up.

And now we may expect good news! After all, some of the drug manufactures are on the brink of introducing a coronavirus vaccine, which surely calls for keeping an eye on such stocks. At the same time, the COVID-19 vaccine market is pretty vast, which unquestionably gives other players the scope to make the most of the opportunity as well.

Among the front runners, of course, is Moderna. The company’s Phase 3 clinical trials have shown that its coronavirus vaccine candidate has been 94.5% effective at protecting people from the virus. The month-long clinical study was conducted on 30,000 volunteers, with only 95 people being reported to have developed COVID-19 symptoms.

The clinical trial has been conducted on young people, elderly and even ethnic minorities, and the vaccine has shown enough signs of safety. Moderna has asked the federal regulatory authority to clear its vaccine candidate for emergency usage as early as feasible. However, the authority is still willing to wait till the end of this month for further safety reports from the study.

Nevertheless, if Moderna’s vaccine, jointly developed by the National Institute of Allergy and Infectious Diseases, gets a green signal from the regulators by the end of this month, it may well be the first company to launch the COVID-19 vaccine, a heartening development amid the rising coronavirus cases and hospitalization.

Moderna’s vaccine candidate, by the way, uses mRNA technology. It’s a relatively new technique that utilizes genetic material to activate the immune system in a body. Meanwhile, on Nov 16, Stéphane Bancel, Chief Executive Officer of Moderna, in the press release said that “this is a pivotal moment in the development of our COVID-19 vaccine candidate. Since early January, we have chased this virus with the intent to protect as many people around the world as possible. All along, we have known that each day matters. This positive interim analysis from our Phase 3 study has given us the first clinical validation that our vaccine can prevent COVID-19 disease, including severe disease.”

Obviously, shares of Moderna jumped 9.6% on Nov 16. In fact, the company’s expected earnings growth rate for the current year as well as the next five years is 20% and 43.4%, respectively. Additionally, the Zacks Consensus Estimate for its next-year earnings has risen more than 100% over the past 60 days. Most importantly, Moderna currently has an encouraging debt profile, a Growth Score of A and a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Interestingly, Moderna’s vaccine news came in just a week after Pfizer claimed that its coronavirus vaccine candidate was more than 90% effective. Pfizer, in collaboration with BioNTech, developed the vaccine candidate, which hasn’t found any major safety issues and is currently seeking emergency authorization for people aged 16 to 85. Notably, the Pfizer and BioNTech vaccine, like Moderna, also uses mRNA technology (read more: 2 Stocks to Watch on Pfizer's 90% Effective COVID-19 Vaccine).

The Zacks Consensus Estimate for Pfizer’s current-year earnings has moved up 1.1% over the past 60 days. In addition, the company’s expected earnings growth rate for the next five-year period is 3.2%. Presently, Pfizer possesses a Zacks Rank #3.

Lastly, unlike Moderna and Pfizer, pharma behemoth Johnson & Johnson isn’t claiming the effectiveness of its coronavirus vaccine at present. But its vaccine candidate isn’t lagging behind and is now going through Phase 3 clinical trial. In fact, what stands out for Johnson & Johnson is that compared to its peers, it has a robust distribution system and doesn’t require new infrastructure to get the vaccine to people who require it.

The company’s supply chain boasts latest technologies like robots and self-driving cars, to name a few. Nevertheless, the Zacks Consensus Estimate for its current-year earnings has risen 1.5% over the past 60 days. The company’s expected earnings growth rate for the next five years is 5.7%. Johnson & Johnson too has a Zacks Rank #3.

Shares of Moderna, Pfizer and Johnson & Johnson, in the meantime, have gained 45.2%, 5.2% and 10%, month to date, respectively.

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