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OGE Energy and Sleep Number have been highlighted as Zacks Bull and Bear of the Day

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For Immediate Release

Chicago, IL – April 26, 2022 – Zacks Equity Research shares OGE Energy Corporation (OGE - Free Report) as the Bull of the Day and Sleep Number Corporation (SNBR - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Harley-Davidson Inc. (HOG - Free Report) , Allison Transmission (ALSN - Free Report) and Cummins, Inc. (CMI - Free Report) .

Here is a synopsis of all five stocks:

Bull of the Day:

OGE Energy Corporation, a Zacks Rank #1 (Strong Buy) stock, is a long-term stock market winner within the Zacks Utilities sector. OGE has been a substantial beneficiary from the energy surge over the past year. The company sports a 'B' rating for our Zacks Momentum Style Score, indicating a strong likelihood that the stock propels higher on the powerful combination of positive earnings estimate revisions and stock price performance.

In a sign of strength, OGE recently eclipsed its all-time high before experiencing a mild pullback during the last week. This has created a great buying opportunity for the stock as it continues to gain from an overall uptrend in both utilities and energy. The company's longevity and continued stock price ascent speak to management's ability to adapt to the ever-changing market landscape.

OGE is a component of the Zacks Utility – Electric Power industry group, which currently ranks in the top 38% out of approximately 250 industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months. Historical research studies suggest that approximately half of a stock's future price appreciation is due to its industry grouping. By targeting stocks contained within the top industry groups, we can dramatically improve our odds of success.

Company Description

OGE Energy operates as a domestic energy services provider, offering physical delivery and related services for electricity, natural gas, and crude oil. The company generates, distributes and sells electric energy, providing retail service to nearly 900,000 customers. OGE is the parent company of Oklahoma Gas and Electric Company.

OGE maintains electric generation capacity fueled by low-sulfur coal and natural gas as well as wind and solar sources. The utility company is recognized as a leader in smart grid technology as it prepares for an electric vehicle program that will include a public charging infrastructure and advanced LED street and security lighting.

OGE Energy is Oklahoma's largest electric utility company and also operates a multitude of transmission systems in western Arkansas. OGE was founded in 1902 and is headquartered in Oklahoma City, OK.

Recent Earnings and Future Estimates

OGE has surpassed earnings estimates several times over the past year. The energy provider most recently reported fourth-quarter EPS back in February of $1.59, earning $319.2 million during the period. This represented a 488.9% surge from the same quarter in the prior year. Adjusted for non-recurring gains, earnings came to 27 cents per share.

The utility company has delivered an average earnings surprise of 24.07% over the past four quarters. OGE is scheduled to report its Q1 earnings results on May 5th. Analysts are expecting quarterly EPS of $1.25, which would translate to 380.77% growth relative to the same quarter in 2021.

OGE has also witnessed recent positive earnings estimate revisions for the current year. Analysts have revised 2022 earnings estimates upward by +29.11% in the past 60 days. The Zacks Consensus EPS Estimate now stands at $2.75, reflecting potential growth of 16.53% relative to last year.

Let's Get Technical

OGE has continued its winning ways over the past few months while the market has been in correction mode. This is the kind of stock we want to include in our portfolio – one with both strong fundamentals as well as technicals. The stock has trended very well over the last 12 months.

Both the 50-day (blue line) and 200-day moving average lines are sloping up and the stock continues to make a series of new 52-week highs. While OGE has pulled back slightly in recent trading sessions, the stock is looking to find support and a push back to new all-time highs may be just around the corner. Cautious investors may feel hesitant about investing in a stock that has come this far, but the fact is this elite company is still outperforming.

Other Factors to Consider

Despite the impressive performance, OGE remains relatively undervalued.

The utility company also boasts a strong track record in terms of dividend payments, having steadily increased its dividend over the past nine years. OGE currently pays a $1.64 annual dividend, equating to a 3.94% dividend yield.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. And as we know, OGE Energy has witnessed positive revisions as of late. As long as this trend remains intact (and OGE continues to post earnings beats), the stock should continue its bullish run this year.

Bottom Line

With a robust earnings history and an improving future outlook, OGE Energy represents a great opportunity. The Zacks Rank #1 (Strong Buy) stock is a compelling investment with an attractive dividend yield and strong price momentum.

Solid institutional buying and a high-performing industry group should continue to provide a tailwind for the stock price. Recent positive earnings estimate revisions will help to provide a cushion during any potential market decline. If you're looking for a way to diversify your portfolio, make sure to put OGE on your shortlist.

Bear of the Day:

Sleep Number Corporation is a domestic provider of sleep solutions and related services. SNBR designs, manufactures, and retails beds, sheets, pillows and other products under the Sleep Number and Sleep Number 360 brands. The company sells its products directly to consumers through retail, online, phone, and chat as well as through its e-commerce platform. SNBR operates nearly 650 retail stores in 50 U.S. states. Sleep Number Corporation was founded in 1987 and is based in Minneapolis, MN.

The Zacks Rundown

Formerly known as Select Comfort Corporation, SNBR has been severely underperforming the market over the past year. A Zacks Rank #5 (Strong Sell) stock, SNBR experienced a climax top in March of last year and has been in a price downtrend ever since. The stock is hitting a series of 52-week lows and represents a compelling short opportunity as the market continues its volatile start to the year.

Sleep Number is part of the Zacks Furniture industry group, which currently ranks in the bottom 26% out of approximately 250 industries. Because this industry is ranked in the bottom half of all Zacks Ranked Industries, we expect it to underperform the market over the next 3 to 6 months. Candidates in the bottom half of industry groups can often represent solid potential short candidates. While individual stocks have the ability to outperform even when included in poor-performing industries, their industry association serves as a headwind for any potential rallies.

Weak Foundation: Falling Short on Earnings and Deteriorating Forecasts

Earnings misses have been a sore spot for SNBR during the past year. The sleep solution provider has fallen short of estimates in three of the past four quarters. SNBR most recently reported Q1 EPS last week of $0.09, missing the $0.33 consensus estimate by -72.73%. Revenues of $527.13 million also missed the mark by -1.92%. Last year, Sleep Number reported earnings in the first quarter of $2.51/share on revenues of $568.26 million. These are the types of negative trends that the bears like to see.

SNBR has posted an average earnings miss of -27.48% over the past four quarters. Analysts have been revising earning estimates downward as of late. For the current quarter, estimates have been slashed -5.62% over the past 60 days. The Q2 Zacks Consensus EPS Estimate now stands at $0.84, translating to a -4.55% earnings regression relative to the same quarter last year.

For the year, analysts have also reduced their EPS estimate by -31.78% in the past 60 days. The 2022 Zacks Consensus EPS Estimate is now $5.11, reflecting a -17.05% decline compared to last year.

Technical Outlook

SNBR stock has been steadily falling since last year and has now established a well-defined downtrend. Notice how both the 50-day (blue line) and 200-day (red line) moving averages are sloping down. Shares have declined more than 60% in the past year. The stock continues to trade below both averages, while the 50-day moving average has acted as steady resistance throughout the down move.

Sleep Number has continued its descent into the new year, with shares falling over 40% and showing no signs of a reversal.

Final Thoughts

The recent earnings misses in addition to deteriorating estimates are both huge red flags and need to be respected. These will likely serve as a ceiling to any potential rallies, nurturing the stock's downtrend.

SNBR's characteristics have resulted in a Zacks Momentum Style Score of 'C', indicating further downside is likely. The fact that SNBR is included in a bottom-performing industry group simply adds to the growing list of concerns. Investors will want to steer clear of SNBR until the situation shows major signs of improvement, or possibly include it as part of a hedge or short strategy.

Additional content:

Things to Note Ahead of Harley-Davidson (HOG - Free Report) Q1 Earnings

Harley-Davidson Inc. is slated to release first-quarter 2022 results on Apr 27, before the bell. The Zacks Consensus Estimate for the quarter's earnings and revenues is pegged at $1.52 a share and $1.34 billion, respectively.

The Zacks Consensus Estimate for Harley-Davidson's first-quarter loss per share has been unchanged over the past 60 days. The bottom-line projection implies a year-over-year decline of 9.5%. Nonetheless, the Zacks Consensus Estimate for quarterly revenues suggests a year-over-year uptick of 8.4%.

This iconic motorcycle manufacturer posted fourth-quarter 2021 earnings against the consensus estimate of a loss per share. Higher-than-anticipated revenues from both Motorcycles & Related Products and Financial Services segments resulted in this outperformance.

Harley-Davidson surpassed the Zacks Consensus Estimate in the trailing four quarters, with the average being 78%.

HarleyDavidson, Inc. price-eps-surprise | HarleyDavidson, Inc. Quote

While investors are keeping their fingers crossed for HOG to retain its earnings beat streak, our model does not predict the same. Let's look at the factors shaping the company's upcoming results.

Factors at Play

Harley-Davidson has been battling severe supply-chain disruptions amid the global microchip shortage, which is likely to have dented the iconic-motorcycle maker's production and shipments in the to-be-reported quarter. Evidently, the Zacks Consensus Estimate for worldwide retail sales is pegged at 44,192 units, implying a decline from 44,234 units sold in first-quarter 2021.

Nonetheless, the Zacks Consensus Estimate for revenues from the Motorcycles and Related Products segment — which constitutes bulk of the firm's overall revenues — is pegged at $1,332 million for the March-end quarter, suggesting an increase from the $1,232 million reported in the year-ago quarter. Also, the consensus mark for operating income from the segment is pegged at $241 million, suggesting growth from the profit of $228 million recorded in the corresponding quarter of 2021.

On the flip side, Harley-Davidson issued a bleak outlook for the Financial Services segment in the last earnings call. The company expects 2022 operating income from the unit to decline 20-25% year over year. The muted projection raises a concern for the upcoming results. The Zacks Consensus Estimate for operating income from Financial Services is pegged at $78 million, depicting a drop from $119 million generated in the comparable year-ago period.

Rising commodity and logistical costs along with elevated capital expenditure associated with product innovation and digital advancement are also expected to have played spoilsports.

Earnings Whispers

Our proven Zacks model does not conclusively predict an earnings beat for Harley-Davidson this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here as elaborated below.

Earnings ESP: Harley-Davidson has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate is on par with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Zacks Rank: Harley-Davidson currently carries a Zacks Rank of 3. You can see the complete list of today's Zacks #1 Rank stocks here.

Stocks with Favorable Combination

While an earnings beat looks uncertain for HOG, here are a few stocks in the auto space, which, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:

Allison Transmission has an Earnings ESP of +10.35% and a Zacks Rank #3. The stock is set to report first-quarter 2022 earnings on Apr 27.

The Zacks Consensus Estimate for Allison's to-be-reported quarter's earnings and revenues is pegged at $1.16 per share and $642 million, respectively. Encouragingly, ALSN surpassed earnings estimates in the last four quarters, with an average of 13.4%.

Cummins, Inc. has an Earnings ESP of +1.68% and a Zacks Rank #3. The stock is set to report first-quarter 2022 earnings on May 3.

The Zacks Consensus Estimate for Cummins' to-be-reported quarter's earnings and revenues is pegged at $3.55 per share and $6.02 billion, respectively. Over the trailing four quarters, CMI surpassed earnings estimates twice for as many misses, with an average surprise of 0.5%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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