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The Zacks Analyst Blog Highlights: Entegris, Texas Instruments, Avnet, MACOM Technology and Atlassian Corp
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For Immediate Release
Chicago, IL – April 22, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Entegris Inc. (ENTG - Free Report) , Texas Instruments Inc. (TXN - Free Report) , Avnet Inc. (AVT - Free Report) , MACOM Technology Solutions Holdings Inc. (MTSI - Free Report) and Atlassian Corporation Plc. (TEAM - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
5 Tech Stocks to Buy on the Dip, Ahead of Earnings
The first-quarter 2021 earnings season has started with much vigor and results so far are highly impressive. The last quarter was a strong one both in terms of economic data and stock market performance. However, the technology sector, which single-handedly drove Wall Street to exit the coronavirus-induced short bear market and form a new bull market, failed to maintain its momentum in the January to March quarter.
Meanwhile, a handful of technology stocks that are available at attractive valuation with a favorable Zacks Rank, are poised to beat earnings estimates this month. Investment in these stocks is likely to be fruitful going forward.
Technology Sector in Q1 At a Glance
The technology sector had soared 43.6% in 2020. However, in first-quarter 2021, it gained a mere 2.4%. The cyclical sectors like industrials, financials, materials, and oil & energy were the ones that recorded double-digit gains. There were two reasons:
First, the government has intensified nationwide deployment of COVID-19 vaccines and the three FDA-approved vaccine manufacturers have ramped up productions. With the possibility of a faster-than-expected reopening of the U.S. economy, market participants shifted from technology to cyclical stocks that were trading at cheap prices at the beginning of this year.
Second, Wall Street's astonishing rally for the past year prompted investors to shift the allotment of funds from safe-haven government bonds to risky equities. Consequently, yields on the 10-Year U.S. Treasury Note and 30-Year U.S. Treasury Note have spiked.
High risk-free return is detrimental to high-growth industries like technology. Most of the growth companies depend on easy borrowing at cheap rates. A higher market interest rate will raise their cost of projects. As a result, investors reallocated their funds to cyclical stocks from growth stocks.
Robust Early Trends for Q1 Earnings
The first-quarter 2021 earnings season has started with much vigor. As of Apr 16, just 44 S&P 500 companies reported results. Total earnings of these companies are up 93.3% year over year on 7.7% higher revenues, with 81.8% beating both EPS and revenue estimates.
For the first quarter as a whole, total earnings of the S&P 500 companies are expected to be up 27.1% from the same period last year on 6.2% higher revenues. These estimates were higher than the 20.4% jump in earnings on 5.6% higher revenues estimated at the beginning of the reporting cycle.
The estimates are all the more impressive primarily because first-quarter 2020 was partially affected by the global outbreak of the deadly coronavirus.
Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after the earnings releases. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Entegris develops, manufactures, and supplies microcontamination control products, specialty chemicals, and advanced materials handling solutions for manufacturing processes in the semiconductor and other high-technology industries in North America, Taiwan, South Korea, Japan, China, Europe, and Southeast Asia. It operates through three segments: Specialty Chemicals and Engineered Materials (SCEM), Microcontamination Control (MC) and Advanced Materials Handling (AMH). The company has an Earnings ESP of +1.11% for first-quarter 2021.
Entegris has an expected earnings growth rate of 17.32% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1% over the last 7 days. It has a trailing four-quarter earnings surprise of 11.1%, on average. The stock is currently trading at 12.4% discount to its 52-week high price. The company is set to release earnings results on Apr 27, before the opening bell.
Texas Instruments designs, manufactures and sells semiconductors to electronics designers and manufacturers worldwide. The company is seeing particular success in certain fast-growing segments of the automotive market. It operates in two segments, Analog and Embedded Processing. The company has an Earnings ESP of +4.25% for first-quarter 2021.
Texas Instruments has an expected earnings growth rate of 13.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 30 days. It has a trailing four-quarter earnings surprise of 34.9%, on average. The stock is currently trading at 6.2% discount to its 52-week high price. The company is set to release earnings results on Apr 27, after the closing bell.
Avnet is a technology solutions company that markets, sells and distributes electronic components. It operates through two segments, Electronic Components and Farnell. The company has an Earnings ESP of +0.89% for third-quarter fiscal 2021 (ended March 2021).
Avnet has an expected earnings growth rate of 31.2% for the current year (ending June 2021). The Zacks Consensus Estimate for current-year earnings has improved 1% over the last 7 days. It has a trailing four-quarter earnings surprise of more than 100%, on average. The stock is currently trading at 4.3% discount to its 52-week high price. The company is set to release earnings results on Apr 28, after the closing bell.
MACOM Technology Solutions designs and manufactures analog radio frequency, microwave, millimeterwave, and lightwave spectrum products in the United States, China, the Asia Pacific, and internationally. The company has an Earnings ESP of +1.17% for second-quarter fiscal 2021 (ended March 2021).
MACOM Technology has an expected earnings growth rate of 92.9% for the current year (ending September 2021). It has a trailing four-quarter earnings surprise of 35.5%, on average. The stock is currently trading at 16.4% discount to its 52-week high price. The company is set to release earnings results on Apr 29, before the opening bell.
Atlassian Corporation designs, develops, licenses, and maintains various software products worldwide. It provides project tracking, content creation and sharing, and service management products. The company has an Earnings ESP of +24.48% for third-quarter fiscal 2021 (ended March 2021).
Atlassian has an expected earnings growth rate of 3.5% for the current year (ending June 2021). The Zacks Consensus Estimate for current-year earnings has improved 7.2% over the last 7 days. It has a trailing four-quarter earnings surprise of 20.1%, on average. The stock is currently trading at 13.7% discount to its 52-week high price. The company is set to release earnings results on Apr 29, after the closing bell.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Entegris, Texas Instruments, Avnet, MACOM Technology and Atlassian Corp
For Immediate Release
Chicago, IL – April 22, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Entegris Inc. (ENTG - Free Report) , Texas Instruments Inc. (TXN - Free Report) , Avnet Inc. (AVT - Free Report) , MACOM Technology Solutions Holdings Inc. (MTSI - Free Report) and Atlassian Corporation Plc. (TEAM - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
5 Tech Stocks to Buy on the Dip, Ahead of Earnings
The first-quarter 2021 earnings season has started with much vigor and results so far are highly impressive. The last quarter was a strong one both in terms of economic data and stock market performance. However, the technology sector, which single-handedly drove Wall Street to exit the coronavirus-induced short bear market and form a new bull market, failed to maintain its momentum in the January to March quarter.
Meanwhile, a handful of technology stocks that are available at attractive valuation with a favorable Zacks Rank, are poised to beat earnings estimates this month. Investment in these stocks is likely to be fruitful going forward.
Technology Sector in Q1 At a Glance
The technology sector had soared 43.6% in 2020. However, in first-quarter 2021, it gained a mere 2.4%. The cyclical sectors like industrials, financials, materials, and oil & energy were the ones that recorded double-digit gains. There were two reasons:
First, the government has intensified nationwide deployment of COVID-19 vaccines and the three FDA-approved vaccine manufacturers have ramped up productions. With the possibility of a faster-than-expected reopening of the U.S. economy, market participants shifted from technology to cyclical stocks that were trading at cheap prices at the beginning of this year.
Second, Wall Street's astonishing rally for the past year prompted investors to shift the allotment of funds from safe-haven government bonds to risky equities. Consequently, yields on the 10-Year U.S. Treasury Note and 30-Year U.S. Treasury Note have spiked.
High risk-free return is detrimental to high-growth industries like technology. Most of the growth companies depend on easy borrowing at cheap rates. A higher market interest rate will raise their cost of projects. As a result, investors reallocated their funds to cyclical stocks from growth stocks.
Robust Early Trends for Q1 Earnings
The first-quarter 2021 earnings season has started with much vigor. As of Apr 16, just 44 S&P 500 companies reported results. Total earnings of these companies are up 93.3% year over year on 7.7% higher revenues, with 81.8% beating both EPS and revenue estimates.
For the first quarter as a whole, total earnings of the S&P 500 companies are expected to be up 27.1% from the same period last year on 6.2% higher revenues. These estimates were higher than the 20.4% jump in earnings on 5.6% higher revenues estimated at the beginning of the reporting cycle.
The estimates are all the more impressive primarily because first-quarter 2020 was partially affected by the global outbreak of the deadly coronavirus.
Our Top Picks
We have narrowed down our search to five technology stocks slated to release earnings results this month. Each of these stocks carries a Zacks Rank # 2 (Buy) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after the earnings releases. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Entegris develops, manufactures, and supplies microcontamination control products, specialty chemicals, and advanced materials handling solutions for manufacturing processes in the semiconductor and other high-technology industries in North America, Taiwan, South Korea, Japan, China, Europe, and Southeast Asia. It operates through three segments: Specialty Chemicals and Engineered Materials (SCEM), Microcontamination Control (MC) and Advanced Materials Handling (AMH). The company has an Earnings ESP of +1.11% for first-quarter 2021.
Entegris has an expected earnings growth rate of 17.32% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1% over the last 7 days. It has a trailing four-quarter earnings surprise of 11.1%, on average. The stock is currently trading at 12.4% discount to its 52-week high price. The company is set to release earnings results on Apr 27, before the opening bell.
Texas Instruments designs, manufactures and sells semiconductors to electronics designers and manufacturers worldwide. The company is seeing particular success in certain fast-growing segments of the automotive market. It operates in two segments, Analog and Embedded Processing. The company has an Earnings ESP of +4.25% for first-quarter 2021.
Texas Instruments has an expected earnings growth rate of 13.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 30 days. It has a trailing four-quarter earnings surprise of 34.9%, on average. The stock is currently trading at 6.2% discount to its 52-week high price. The company is set to release earnings results on Apr 27, after the closing bell.
Avnet is a technology solutions company that markets, sells and distributes electronic components. It operates through two segments, Electronic Components and Farnell. The company has an Earnings ESP of +0.89% for third-quarter fiscal 2021 (ended March 2021).
Avnet has an expected earnings growth rate of 31.2% for the current year (ending June 2021). The Zacks Consensus Estimate for current-year earnings has improved 1% over the last 7 days. It has a trailing four-quarter earnings surprise of more than 100%, on average. The stock is currently trading at 4.3% discount to its 52-week high price. The company is set to release earnings results on Apr 28, after the closing bell.
MACOM Technology Solutions designs and manufactures analog radio frequency, microwave, millimeterwave, and lightwave spectrum products in the United States, China, the Asia Pacific, and internationally. The company has an Earnings ESP of +1.17% for second-quarter fiscal 2021 (ended March 2021).
MACOM Technology has an expected earnings growth rate of 92.9% for the current year (ending September 2021). It has a trailing four-quarter earnings surprise of 35.5%, on average. The stock is currently trading at 16.4% discount to its 52-week high price. The company is set to release earnings results on Apr 29, before the opening bell.
Atlassian Corporation designs, develops, licenses, and maintains various software products worldwide. It provides project tracking, content creation and sharing, and service management products. The company has an Earnings ESP of +24.48% for third-quarter fiscal 2021 (ended March 2021).
Atlassian has an expected earnings growth rate of 3.5% for the current year (ending June 2021). The Zacks Consensus Estimate for current-year earnings has improved 7.2% over the last 7 days. It has a trailing four-quarter earnings surprise of 20.1%, on average. The stock is currently trading at 13.7% discount to its 52-week high price. The company is set to release earnings results on Apr 29, after the closing bell.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>
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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/performance for information about the performance numbers displayed in this press release.