For Immediate Release

Chicago, IL – February 15, 2022 – Zacks Equity Research Shares Bunge Limited (BG Quick QuoteBG - Free Report) as the Bull of the Day, Intuitive Surgical, Inc. (ISRG Quick QuoteISRG - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Signature Bank (SBNY Quick QuoteSBNY - Free Report) , Washington Federal, Inc. (WAFD Quick QuoteWAFD - Free Report) and Eastern Bankshares, Inc. (EBC Quick QuoteEBC - Free Report) .

Here is a synopsis of all five stocks:

Bull of the Day:

Bunge Limited saw strong results in 2021 as food has surged to the forefront globally during the pandemic. This Zacks Rank #1 (Strong Buy) has beat on the Zacks Consensus 7 quarters in a row.

Bunge is the world's leader in oilseed processing and a producer and supplier of specialty plant-based oils and fats. Headquartered in St Louis, it has 300 facilities located in more than 40 countries.

Another Beat in the Fourth Quarter

On Feb 9, Bunge reported its fourth quarter results and blew past the Zacks Consensus by $0.44. Earnings were $3.49 versus the Zacks Consensus Estimate of $3.05.

It was the 7th consecutive beat.

Bunge saw strong results across its operations from Agribusiness to Refined and Specialty Oils which saw record Q4 and full year results.

Expects Another Strong Year in 2022

Bunge was bullish with its outlook for 2022 even with such strong results in 2021.

It expects full year adjusted 2022 EPS of at least $9.50 per share, which would be the second highest operation performance in the company's recent history.

Agribusiness is expected to see a decline from a record 2021, primarily due to lower results in Merchandising and softseed crushing, which had been exceptionally strong in prior years.

Bunge isn't expecting the same magnitude of margin enhancing opportunities that they had in 2021, but they do see potential upside to their outlook if strong demand and tight commodity supplies continue.

In Refined and Specialty Oils, 2022 is expected to be up from last year, delivering another record year due to strong demand from food and fuel in their North American and European businesses.

In Milling, 2022 results are also expected to be up from the prior year driven by improved market conditions in Brazil.

Analysts Raise Earnings Estimates

The analysts liked what they heard. 2 analysts raised their earnings estimates since the earnings report, pushing up the 2022 Zacks Consensus Estimate to $10.44 from $10.16 before the report.

That's still an earnings decline from 2021, however, as Bunge made $12.93 last year.

Was 2021 peak earnings?

As you can see on the price and consensus chart, earnings are expected to decline over the next 2 years.

But it has the Zacks #1 Rank of Strong Buy because none of the analysts cut estimates, they only raised for the full year. Earnings estimates are still going in the right direction: higher.

Too Hot to Handle?

Bunge shares are up 30.4% over the last year and have gained 8% in 2022, when many other stocks have been weak to start the year.

Shares are at 5-year highs.

Is it too hot to handle?

Bunge trades with a forward P/E of 9.8, which is cheap.

It also pays a dividend, currently yielding 2.1%.

For those looking for a food play, Bunge is one to keep on the short list.

Bear of the Day:

Intuitive Surgical, Inc. is weathering the coronavirus outbreaks, which continue to impact its business. However, this Zacks Rank #5 (Strong Sell) is now expected to see earnings decline in 2022 from 2021.

Intuitive Surgical is the leader in robotic-assisted, minimally invasive surgery. It manufactures and markets the da Vinci surgical system worldwide.

Another Beat in Q4 2021

On Jan 20, Intuitive Surgical reported its fourth quarter 2021 results and beat on the Zacks Consensus by $0.02. Earnings were $1.30 versus the Zacks Consensus of $1.28.

It was the 11th earnings beat in a row. Intuitive Surgical's last earnings miss was in 2019, before the pandemic.

Worldwide da Vinci procedures rose about 19% compared with the fourth quarter of 2020, driven by growth in the US general surgery procedures and growth in OUS markets.

The compound annual growth rate between the fourth quarter of 2019, or pre-pandemic, and the fourth quarter of 2021, was about 13%.

It shipped 385 da Vinci Surgical Systems, up 18% from the year ago fourth quarter. Both quarters were impacted by COVID outbreaks.

Fourth quarter revenue jumped 17% to $1.55 billion from $1.33 billion. The compound annual growth rate between Q4 2019 and Q4 2021 was about 10%.

Intuitive Surgical ended the fourth quarter 2021 with $8.6 billion in cash, cash equivalents and investments, an increase of $400 million during the quarter.

Analysts Cut 2022 Estimates

The analysts, however, were not impressed when looking forward to 2022.

Intuitive Surgical said that COVID outbreaks continue to impact their business, at different times and ways, globally.

6 estimates were lowered in the last 30 days for 2022 which pushed the Zacks Consensus Estimate down to $4.87 from $5.51.

That's an earnings decline of 1.8% as Intuitive Surgical made $4.96 last year.

These estimate cuts are the reason that Intuitive Surgical is a Zacks Strong Sell. No analysts raised earnings estimates for 2022. They were only cutting.

Therefore, the analysts are in agreement and the earnings consensus fell. That's when you will get a Strong Sell rank.

Shares Sell Off in 2022

Intuitive Surgical has been a big winner for many investors over the years. Shares are up 250% in the last 5 years, easily beating the S&P 500 which has gained 88% during that time.

But like a lot of growth stocks, the shares have taken a dive in 2022.

Intuitive Surgical shares are down 22% year-to-date.

Yet, they aren't cheap. Intuitive Surgical trades with a forward P/E of 58.

While earnings are expected to decline in 2022, analysts see a rebound in 2023, with earnings growing 18%.

Those investors who have been waiting on the sidelines on Intuitive Surgical, might want to put it on their wish list for when the earnings estimates improve and/or it gets a lot cheaper on a fundamental basis.

Additional content:

Raging Inflation Ups Chances of Greater Rate Hike: 3 Banks to Buy

The Federal Reserve’s approach to tackle the red-hot inflation has raised the prospects of a bigger hike in interest rates in March. The consumer price index jumped 7.5% year over year this January. This marked the highest 12-month gain in 40 years.

The rate hike had been in the cards since the December 2021 FOMC meeting when the Fed officials signaled plans to accelerate the speed to pare its bond purchases. This positioned the central bank to raise the ultra-low interest rates sooner than expected. Nonetheless, with the inflation showing no signs of abatement, the Fed is now expected to announce a 50 basis points (bps) hike in rates instead of the usual 25 bps.

Per the CME FedWatch Tool data, at present, there is a 56% chance that the Fed will raise the interest rates by 50 bps in March. Also, market participants are predicting as many as seven rate hikes this year. Thus, thriving in a higher interest rate environment, banks are likely to remain in the spotlight. Hence, we have picked — Signature Bank, Washington Federal, Inc. and Eastern Bankshares, Inc. — as these will benefit from the Fed’s hawkish stance.

Interestingly, following the release of January inflation data, there has been a rise in market expectations that the Fed will be more aggressive in taming inflation and may even announce an emergency rate hike before March.   

Despite high inflation, the U.S. economy is improving steadily. It expanded 5.7% in 2021, marking the fastest pace of growth since 1984 and a resounding reversal from the contraction of 3.4% in 2020. Further, solid job growth and higher consumer confidence are expected to support economic expansion amid supply chain concerns.

Hence, banks, witnessing shrinking net interest margin and net interest income (NII) since March 2020, are expected to benefit. An improving economy, increase in demand for loans and efforts to diversify operations will also support banks’ financial performance, going forward.

Our Choices

On the back of these favorable developments, this is the right time to buy bank stocks to generate solid returns in 2022 and beyond.

Short-listed banks have earnings growth rate expectation of 10% or more for 2022 and a market cap of not less than $2 billion. Also, these banks currently carry a Zacks Rank #1 (Strong Buy) or #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Over the past year, these banks have outperformed both the Zacks Finance sector’s rally of 14.7% and the S&P 500 Index gain of 12.3%.

Signature Bank is a New York-based full-service commercial bank with 37 private client offices located in the New York metropolitan area, Connecticut, California and North Carolina. Founded in 2001, SBNY became a member of the S&P 500 Index on Dec 20, 2021. It has a market cap of $20.4 billion.

Signature Bank has been focusing on cutting-edge technologies to adapt and adopt the expansion of its digital assets business. It was the first FDIC-insured bank to launch a blockchain-based digital payments platform, Signet.

Such dynamic moves by this Zacks Rank #1 company are fueling deposit growth. Deposits witnessed a five-year (2017-2021) CAGR of 33.5%, while net loans recorded a CAGR of 18.7% for the same period. Thus, deposit and loan balances are poised to increase further with support from a gradually improving economy and efforts to diversify lending segments.

Driven by these favorable developments, NII witnessed a compound annual growth rate (CAGR) of 11% over the last five years (ended 2021). The uptrend resulted from the rise in average interest-earning assets, backed by robust average deposit and loan growth. Hence, Signature Bank is well-positioned to maintain its revenue momentum given its client-centric business model and expansion in strategic markets.

Over the past year, SBNY has gained 57.2%. The Zacks Consensus Estimate for 2022 earnings has been revised 10.1% upward over the past 30 days to $19.16. This indicates year-over-year growth of 27.5%.

Headquartered in Seattle, WA, Washington Federal operates as a non-diversified unitary savings and loan holding company. It conducts operations through its federally insured savings and loan association subsidiary, WaFd Bank.

Washington Federal, which currently carries a Zacks Rank of 2, is focused on its organic growth efforts, with revenues witnessing a CAGR of 3.5% over the last six fiscal years (2016-2021). The upswing was largely driven by improving net loan balances, which saw a CAGR of 6.9% over the same time frame. Given the robust loan demand and solid economic growth, the company’s top line is expected to continue improving in the quarters ahead.

WAFD’s balance sheet position remains solid. As of Dec 31, 2021, the company had total debt worth $1.72 billion and cash and cash equivalents worth $1.88 billion. Given the company’s decent earnings strength and liquidity position, Washington Federal is expected to continue meeting debt obligations, even if the economic situation worsens.

Washington Federal’s strong balance sheet position and its trend of returning capital to shareholders are expected to boost investors’ confidence in the stock. The bank has been increasing its quarterly dividend on a regular basis, with the latest one announced in January 2022. Also, as of Dec 31, 2021, it had 3.7 million shares remaining under the buyback authorization.

The stock, with a market cap of $2.3 billion, rallied 19.1% over the past year. WAFD’s earnings estimates for fiscal 2022 have moved 3.2% north over the past 30 days to $2.92. This shows a 22.2% year-over-year increase in earnings.

Eastern Bankshares, based in Boston, MA, provides commercial banking, investment and insurance products and services primarily to retail, commercial and small business customers. EBC operates through more than 120 locations in eastern Massachusetts, southern and coastal New Hampshire and Rhode Island.

As of Dec 31, 2021, this Zacks Rank #2 bank had $23.5 billion in total assets. EBC has been expanding through acquisitions. In November 2021, the company completed the buyout of Century Bancorp, Inc. for $642 million. Also, it has been expanding its insurance business with regular strategic acquisitions since 2002. These efforts are expected to keep supporting the company’s financials.

This apart, EBC has witnessed solid revenue growth. Over the last five years, the same has witnessed a CAGR of 3.8% (ended 2021). Given the synergies from acquisitions and rise in demand for loans, Eastern Bankshares’ top line is expected to continue improving in the quarters ahead.

Further, Eastern Bankshares has impressive capital deployment activities, driven by a solid liquidity position. As of Dec 31, 2021, it had total borrowing of $34.3 million and cash and cash equivalents balance of $1.23 billion. In January 2022, the company hiked its quarterly dividend by 25% to 10 cents per share. As of Dec 31, 2021, almost 8.2 million shares were available under EBC’s buyback authorization, which is set to expire this November end.

The stock, which has a market cap of $3.9 billion, rallied 25.8% in the past 12 months. Over the past month, EBC’s 2022 earnings estimates have been revised 4.5% upward to $1.17. This suggests a 20.6% rise in earnings on a year-over-year basis.

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