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The Zacks Analyst Blog Highlights AutoNation, Westlake, G-III Apparel Group, Jabil, and Dow
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For Immediate Release
Chicago, IL – April 13, 2022 – 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 AutoNation Inc. (AN - Free Report) , Westlake Corp. (WLK - Free Report) , G-III Apparel Group Ltd. (GIII - Free Report) , Jabil Inc. (JBL - Free Report) and Dow Inc. (DOW - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Buy These 5 Value Stocks to Stay Safe in a Volatile Market
Wall Street has suffered from severe volatility since the beginning of 2022 with no sign of a near-term trend reversal. Market participants were skeptical about the Fed's policy shift toward a tougher-than-expected line. Moreover, the lingering geopolitical conflict between Russia and Ukraine has raised serious doubts about global economic growth.
At this stage, it would be prudent to pick value stocks with a favorable Zacks Rank to cushion the portfolio as well as to make some gains from the upside potential. These stocks could prove to be valuable once the rally resumes. Five of them are AutoNation Inc., Westlake Corp., G-III Apparel Group Ltd., Jabil Inc., and Dow Inc..
Near-Term Concerns
At present, the major concern for both the U.S. and global economies are mounting inflation. The outbreak of coronavirus has significantly devastated the global supply-chain system in the last two years. Input costs have soared for businesses. At the same time, strong pent-up demand supported by massive personal savings in the last two years resulted in soaring inflation.
In the United States, several measures of inflation are currently at 40-year high levels. In order to combat skyrocketing inflation, the Fed terminated its $120 billion per month bond-buy program in March and raised the benchmark interest rate by 25 basis points for the first time in three years. On Apr 5, Fed Governor Lael Brainard said that a steady increase in the benchmark interest rate and an aggressive balance sheet reduction is needed to bring back the price level.
The March FOMC minutes also revealed that Fed officials almost unanimously agreed that the central bank must reduce the size of its $9 trillion balance sheet by around $95 per month starting from May. Moreover, the minutes revealed that most officials have agreed that the Fed must raise the interest rate by 50 basis points in the next two FOMC's in May and June.
Market participants are highly concerned that inflation will remain elevated in the near term due to the prolonged war between Russia and Ukraine and the recent resurgence of coronavirus in China.
At the same time, a tougher-than-expected monetary policy adopted by the Fed may result in stagflation as higher cost of funds is likely to deter businesses to do away with expansionary strategies. Soaring inflation may result in lower personal spending, which may reduce U.S. GDP.
Long-Term Catalysts
In 2022, the biggest drivers of the U.S. stock markets should be the nation's strong economic fundamentals. The labor market has returned to the pre-pandemic level. Aggregate demand remained strong despite skyrocketing inflation.
Moreover, the U.S. economy will get more upside from the government's infrastructure spending. On Nov 15, President Joe Biden signed a bipartisan infrastructure bill of $550 billion in addition to the previously approved funds of $450 billion for five years. Total spending may go up to $1.2 trillion if the plan is extended to eight years.
The infrastructure development project will be a key catalyst for the U.S. stock markets in 2022. Various segments of the economy such as basic materials, industrials, utilities and telecommunications should benefit immensely for more job creation.
Additionally, the White House put pressure on Congress to quickly pass legislation providing $52 billion to help computer chip manufacturers and ease the shortage of the components vital to many industries.
Our Top Picks
At this juncture, investors should be prepared to minimize fluctuations in their portfolio and consequently rebalance it with suitable financial assets to maintain stability. We have narrowed our search to five value stocks. Each of our picks carries a Zacks Rank #1 (Strong Buy) and a Value Score of A. You can see the complete list of today's Zacks #1 Rank stocks here.
AutoNation is the largest automotive retailer in the United States. A diversified product mix, strong footprint, large dealer network and aggressive store expansion efforts are set to fuel AN's profitability. Acquisition of Peacock Automotive Group and Priority 1 have strengthened AutoNation's portfolio.
Enhanced digital solutions have helped AN to further boost profitability and market presence. With the launch of its digital platform AutoNation Express — which enables customers to buy and sell vehicles online — the company has stepped up its digitization game, which is driving its top-line growth. Increased focus on cost discipline is also aiding margins. A strong liquidity profile and investor-friendly moves instill optimism for AN.
The forward P/E for the current financial year is 5.3X, lower than the industry average of 6.2X. AN has a PEG ratio of 0.2, lower than the industry average of 0.4. AutoNation has expected earnings growth of 11.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the last 7 days.
Westlake Chemical is benefiting from synergies from the Axiall acquisition. The buyout has diversified its product portfolio and geographical operations. The NAKAN acquisition has also allowed WLK to boost its compounding business globally. Further, Westlake Chemical sees favorable demand trends for polyethylene and polyvinyl chloride resin.
Strong demand in the polyethylene business is likely to continue, especially in food packaging. Also, rising housing starts in the United States augur well for WLK's downstream vinyl products business and domestic demand for PVC. Westlake Chemical should also benefit from its capacity expansion projects.
The forward P/E for the current financial year is 6.3X, lower than the industry average of 6.7X. WLK has a PEG ratio of 0.2, lower than the industry average of 0.22. Westlake Chemical has expected earnings growth of 17.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 7.8% over the last 7 days.
G-III Apparel is a manufacturer, designer and distributor of apparel and accessories under licensed, owned and private label brands. Solid gains from GIII's brands and digital business have been driving performance. Higher sales at the Wholesale division aided the overall sales of G-III Apparel.
Although retail business persists being soft, management completed the division's restructuring and the new model is poised to attain profitability. GIII's digital business also continued to exhibit strength in the last reported quarter. Management remains optimistic about its global power brands, including DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris.
The forward P/E for the current financial year is 6.5X, lower than the industry average of 10.1X. GIII has a PEG ratio of 0.4, lower than the industry average of 1.4. G-III Apparel has expected earnings growth of 5.2% for the current year (ending January 2023). The Zacks Consensus Estimate for current-year earnings has improved 10.1% over the last 30 days.
Jabil provides manufacturing services and solutions worldwide. JBL is benefiting from solid demand in key end markets together with excellent operational execution and skillful management of supply chain dynamics.
Jabil is well-positioned to witness strong top-line growth in healthcare, automotive, mobility, industrial and semiconductor, and 5G wireless and cloud businesses. JBL announced that its Photonics business unit and EFFECT Photonics have joined forces to develop next-generation coherent optical modules. Jabil's efforts to optimize its manufacturing footprint are likely to drive profits.
The forward P/E for the current financial year is 7.8X, lower than the industry average of 8.6X. JBL has a PEG ratio of 0.65, lower than the industry average of 0.66. Jabil has expected earnings growth of 29.2% for the current year (ending August 2022). The Zacks Consensus Estimate for current-year earnings has improved 10.2% over the last 30 days.
Dow should gain from cost synergy savings and productivity initiatives. Dow is focused on maintaining cost and operational discipline through cost synergy and stranded cost-removal initiatives. Actions to reduce operating costs are expected to support DOW earnings in 2022.
Dow's restructuring program is also expected to deliver margin benefits. Investment in high-return projects should also be accretive to its earnings. Management is investing in several high-return growth projects including expanding downstream silicones capacity.
The forward P/E for the current financial year is 8.5X, lower than the industry average of 11.1X. Dow has a PEG ratio of 0.3, lower than the industry average of 0.8. The Zacks Consensus Estimate for current-year earnings improved 4% over the last 30 days.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
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 AutoNation, Westlake, G-III Apparel Group, Jabil, and Dow
For Immediate Release
Chicago, IL – April 13, 2022 – 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 AutoNation Inc. (AN - Free Report) , Westlake Corp. (WLK - Free Report) , G-III Apparel Group Ltd. (GIII - Free Report) , Jabil Inc. (JBL - Free Report) and Dow Inc. (DOW - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Buy These 5 Value Stocks to Stay Safe in a Volatile Market
Wall Street has suffered from severe volatility since the beginning of 2022 with no sign of a near-term trend reversal. Market participants were skeptical about the Fed's policy shift toward a tougher-than-expected line. Moreover, the lingering geopolitical conflict between Russia and Ukraine has raised serious doubts about global economic growth.
At this stage, it would be prudent to pick value stocks with a favorable Zacks Rank to cushion the portfolio as well as to make some gains from the upside potential. These stocks could prove to be valuable once the rally resumes. Five of them are AutoNation Inc., Westlake Corp., G-III Apparel Group Ltd., Jabil Inc., and Dow Inc..
Near-Term Concerns
At present, the major concern for both the U.S. and global economies are mounting inflation. The outbreak of coronavirus has significantly devastated the global supply-chain system in the last two years. Input costs have soared for businesses. At the same time, strong pent-up demand supported by massive personal savings in the last two years resulted in soaring inflation.
In the United States, several measures of inflation are currently at 40-year high levels. In order to combat skyrocketing inflation, the Fed terminated its $120 billion per month bond-buy program in March and raised the benchmark interest rate by 25 basis points for the first time in three years. On Apr 5, Fed Governor Lael Brainard said that a steady increase in the benchmark interest rate and an aggressive balance sheet reduction is needed to bring back the price level.
The March FOMC minutes also revealed that Fed officials almost unanimously agreed that the central bank must reduce the size of its $9 trillion balance sheet by around $95 per month starting from May. Moreover, the minutes revealed that most officials have agreed that the Fed must raise the interest rate by 50 basis points in the next two FOMC's in May and June.
Market participants are highly concerned that inflation will remain elevated in the near term due to the prolonged war between Russia and Ukraine and the recent resurgence of coronavirus in China.
At the same time, a tougher-than-expected monetary policy adopted by the Fed may result in stagflation as higher cost of funds is likely to deter businesses to do away with expansionary strategies. Soaring inflation may result in lower personal spending, which may reduce U.S. GDP.
Long-Term Catalysts
In 2022, the biggest drivers of the U.S. stock markets should be the nation's strong economic fundamentals. The labor market has returned to the pre-pandemic level. Aggregate demand remained strong despite skyrocketing inflation.
Moreover, the U.S. economy will get more upside from the government's infrastructure spending. On Nov 15, President Joe Biden signed a bipartisan infrastructure bill of $550 billion in addition to the previously approved funds of $450 billion for five years. Total spending may go up to $1.2 trillion if the plan is extended to eight years.
The infrastructure development project will be a key catalyst for the U.S. stock markets in 2022. Various segments of the economy such as basic materials, industrials, utilities and telecommunications should benefit immensely for more job creation.
Additionally, the White House put pressure on Congress to quickly pass legislation providing $52 billion to help computer chip manufacturers and ease the shortage of the components vital to many industries.
Our Top Picks
At this juncture, investors should be prepared to minimize fluctuations in their portfolio and consequently rebalance it with suitable financial assets to maintain stability. We have narrowed our search to five value stocks. Each of our picks carries a Zacks Rank #1 (Strong Buy) and a Value Score of A. You can see the complete list of today's Zacks #1 Rank stocks here.
AutoNation is the largest automotive retailer in the United States. A diversified product mix, strong footprint, large dealer network and aggressive store expansion efforts are set to fuel AN's profitability. Acquisition of Peacock Automotive Group and Priority 1 have strengthened AutoNation's portfolio.
Enhanced digital solutions have helped AN to further boost profitability and market presence. With the launch of its digital platform AutoNation Express — which enables customers to buy and sell vehicles online — the company has stepped up its digitization game, which is driving its top-line growth. Increased focus on cost discipline is also aiding margins. A strong liquidity profile and investor-friendly moves instill optimism for AN.
The forward P/E for the current financial year is 5.3X, lower than the industry average of 6.2X. AN has a PEG ratio of 0.2, lower than the industry average of 0.4. AutoNation has expected earnings growth of 11.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the last 7 days.
Westlake Chemical is benefiting from synergies from the Axiall acquisition. The buyout has diversified its product portfolio and geographical operations. The NAKAN acquisition has also allowed WLK to boost its compounding business globally. Further, Westlake Chemical sees favorable demand trends for polyethylene and polyvinyl chloride resin.
Strong demand in the polyethylene business is likely to continue, especially in food packaging. Also, rising housing starts in the United States augur well for WLK's downstream vinyl products business and domestic demand for PVC. Westlake Chemical should also benefit from its capacity expansion projects.
The forward P/E for the current financial year is 6.3X, lower than the industry average of 6.7X. WLK has a PEG ratio of 0.2, lower than the industry average of 0.22. Westlake Chemical has expected earnings growth of 17.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 7.8% over the last 7 days.
G-III Apparel is a manufacturer, designer and distributor of apparel and accessories under licensed, owned and private label brands. Solid gains from GIII's brands and digital business have been driving performance. Higher sales at the Wholesale division aided the overall sales of G-III Apparel.
Although retail business persists being soft, management completed the division's restructuring and the new model is poised to attain profitability. GIII's digital business also continued to exhibit strength in the last reported quarter. Management remains optimistic about its global power brands, including DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris.
The forward P/E for the current financial year is 6.5X, lower than the industry average of 10.1X. GIII has a PEG ratio of 0.4, lower than the industry average of 1.4. G-III Apparel has expected earnings growth of 5.2% for the current year (ending January 2023). The Zacks Consensus Estimate for current-year earnings has improved 10.1% over the last 30 days.
Jabil provides manufacturing services and solutions worldwide. JBL is benefiting from solid demand in key end markets together with excellent operational execution and skillful management of supply chain dynamics.
Jabil is well-positioned to witness strong top-line growth in healthcare, automotive, mobility, industrial and semiconductor, and 5G wireless and cloud businesses. JBL announced that its Photonics business unit and EFFECT Photonics have joined forces to develop next-generation coherent optical modules. Jabil's efforts to optimize its manufacturing footprint are likely to drive profits.
The forward P/E for the current financial year is 7.8X, lower than the industry average of 8.6X. JBL has a PEG ratio of 0.65, lower than the industry average of 0.66. Jabil has expected earnings growth of 29.2% for the current year (ending August 2022). The Zacks Consensus Estimate for current-year earnings has improved 10.2% over the last 30 days.
Dow should gain from cost synergy savings and productivity initiatives. Dow is focused on maintaining cost and operational discipline through cost synergy and stranded cost-removal initiatives. Actions to reduce operating costs are expected to support DOW earnings in 2022.
Dow's restructuring program is also expected to deliver margin benefits. Investment in high-return projects should also be accretive to its earnings. Management is investing in several high-return growth projects including expanding downstream silicones capacity.
The forward P/E for the current financial year is 8.5X, lower than the industry average of 11.1X. Dow has a PEG ratio of 0.3, lower than the industry average of 0.8. The Zacks Consensus Estimate for current-year earnings improved 4% over the last 30 days.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
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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.