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Cheniere Energy and PayPal have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – June 6, 2022 – Zacks Equity Research shares Cheniere Energy (LNG - Free Report) as the Bull of the Day and PayPal (PYPL - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Dollar Tree (DLTR - Free Report) , Hess Corp. (HES - Free Report) and Analog Devices (ADI - Free Report)
Energy has been the hottest sector in the market this year. Year-to-date, there are several mega cap energy stocks which are up over 50%. How long can this hot hand last? Nobody knows for sure, but what I do know is that earnings in these companies are going one way...up. It's not only oil, other areas in the energy sector like natural gas have been rocking and rolling as well.
Today's Bull of the Day is one such stock. It's Zacks Rank #1 (Strong Buy) Cheniere Energy. Cheniere Energy, Inc., an energy infrastructure company, primarily engages in the liquefied natural gas (LNG - Free Report) related businesses in the United States. It owns and operates the Sabine Pass LNG terminal in Cameron Parish, Louisiana; and the Corpus Christi LNG terminal near Corpus Christi, Texas. The company also owns Creole Trail pipeline, a 94-mile pipeline interconnecting the Sabine Pass LNG terminal with various interstate pipelines; and operates Corpus Christi pipeline, a 21.5-mile natural gas supply pipeline that interconnects the Corpus Christi LNG terminal with various interstate and intrastate natural gas pipelines.
The reason for the favorable Zacks Rank is the recent earnings estimate revisions coming from analysts all over Wall Street. Over the last sixty days, three analysts have increased their estimates for the current year. Next year, six have pushed up their numbers while only two have cut. The bullish moves have hiked up our Zacks Consensus Estimates for the current year from $11.07 to $15.49 while next year's number is up from $8.84 to $12.22.
The stock has been on a tear since bottoming out at the COVID lows in the low $30s. Since then, the stock has rallied along with the earnings projections. Now, a little over two years since bottoming out, the stock is over $100 higher, closing last Friday at $141.96.
It has been a rough year for tech stocks. The darlings of the market during the post-COVID surge, these stocks have been coming up short on earnings and revenue projections. The result, an absolute collapse. Just take a quick look at the NASDAQ Composite and you'll see exactly what I mean. The tech-heavy index is down 23.2% year-to-date. There have been few places to hide within tech.
Today's Bear of the Day is a stock that used to be one of the darlings in FinTech. Now, it's come under pressure as earnings have contracted. I'm talking about PayPal Holdings, Inc. operates a technology platform that enables digital payments on behalf of merchants and consumers worldwide. It provides payment solutions under the PayPal, PayPal Credit, Braintree, Venmo, Xoom, Zettle, Hyperwallet, Honey, and Paidy names. The company's payments platform allows consumers to send and receive payments in approximately 200 markets and in approximately 100 currencies, withdraw funds to their bank accounts in 56 currencies, and hold balances in their PayPal accounts in 25 currencies.
PayPal is not in the good graces of our Zacks Rank. In fact, it is currently a Zacks Rank #5 (Strong Sell). The reason is the series of negative earnings estimate revisions coming from analysts. Over the last sixty days, fifteen analysts have cut their numbers for the current year, while fourteen have followed suit for next year. The bearish moves have dropped our Zacks Consensus Estimates for the current year from $4.66 to $4.00, while next year's number is off from $5.76 to $4.82.
One feather in the cap of long-term investors here is that there is earnings growth coming back next year. While this year's earnings are going through a 13% contraction, next year growth returns at 20.59%. That's on revenue growth of 11.48% this year and 16.27% next year.
The Internet – Software industry is in the Bottom 41% of our Zacks Industry Rank.
Additional content:
3 Highly-Ranked Large-Cap Stocks Worth a Look
The market was strong yesterday, providing investors with a much-needed day in the green. Today, that fun has seemingly come to a halt, with red sweeping across the board. It's been an exhausting 2022, to say the least, with sellers remaining in control and pushing bulls out of the arena at seemingly every turn.
With the Fed pivoting to a hawkish position, the stock market has priced in the impact of higher borrowing rates. This, in turn, with soaring energy costs and supply-chain bottlenecks, have all spoiled the fun year-to-date.
On a brighter note, the indices are still well above their 2022 lows, which any investor can celebrate. The five-year chart below illustrates that the S&P 500 has bounced off of March 2021 levels so far, another positive note.
A staple found within many portfolios is large-cap stocks. Large-cap stocks are typically classified by companies with market valuations of $10 billion or more.
Large-cap companies are generally more mature, well-known companies within established industries. These stocks are less volatile, have greater coverage, and typically pay dividends. Additionally, they provide stability and pose less risk – these companies are less likely to face an economic or business circumstance that will cause insolvency.
Let's look at three large-cap stocks – Dollar Tree, Hess Corp., and Analog Devices – that all sport the highly coveted Zacks Rank #1 (Strong Buy) and why these stocks would be solid bets for investors looking for large-cap exposure.
Hess Corporation
Hess Corp. is a globally integrated energy company engaging in the exploration, production, development, transportation, purchase and sale of crude oil, natural gas liquids, and natural gas. Year-to-date, shares have been blistering hot, increasing nearly 73% in value and easily outperforming the S&P 500.
The company has reported strong quarterly results. Over its last four quarters, the average EPS surprise has been a double-digit 13%, and in its latest quarter, HES beat bottom-line estimates by a solid 16%.
In addition to solid quarterly results, analysts have been upping their bottom-line outlook rapidly over the last 60 days. For the upcoming quarterly release, the $2.24 EPS estimate reflects a jaw-dropping 830% expansion in the bottom line from the year-ago quarter.
Additionally, for FY22, earnings are expected to expand by a triple-digit 310%, and for FY23, the bottom line is expected to grow by an additional 40%.
The company's forward price-to-sales ratio of 3.5X is well below 2021 highs of 4.5X and represents a steep 31% discount relative to the S&P 500's value of 4.1X.
For investors who seek a stream of income, HES has that covered with its 1.19% annual dividend yield with a payout ratio sitting at 56% of earnings. Additionally, the company has increased its dividend once over the last five years, with a five-year annualized dividend growth rate of 2.3%.
The dividend yield is just marginally below the S&P 500's 1.43% yield.
Dollar Tree
Dollar Tree is an operator of discount variety stores offering merchandise and other assortments, operating in all types of sized cities. Year-to-date, DLTR shares have been a hot item, increasing nearly 15% in value and easily outpacing the general market.
The company has chained together an impressive streak of ten consecutive bottom-line beats dating back to 2020, and over its last four quarterly reports, Dollar Tree has exceeded earnings estimates by 13%, on average. Furthermore, the company smoked EPS estimates by a sizable 20% in its latest quarterly release.
The Consensus Estimate Trend for the upcoming quarter has retraced by a concerning 8%, but the $1.56 EPS estimate still displays a notable 26% growth in earnings from the year-ago quarter. Additionally, earnings are forecasted to grow 40% in FY22 and an additional 14% in FY23.
Looking at valuation levels, Dollar Tree's forward price-to-sales ratio of 1.3X is nicely below highs of 1.4X earlier this year and just above its median of 1.0X over the last five years. Additionally, the value represents a steep 67% discount relative to the S&P 500's value.
Analog Devices
Analog Devices is an original equipment manufacturer of semiconductor devices, specifically analog, mixed-signal, and digital signal processing integrated circuits. Year-to-date, shares have displayed a valuable level of defense relative to the S&P 500, decreasing 5% in value.
The company has been on a blazing-hot earnings streak, exceeding EPS expectations in ten consecutive quarters. Over its last four quarterly reports, the company has an average EPS surprise of a notable 7.7%, and in its latest quarter, ADI beat bottom-line estimates by a substantial 13%.
Analysts have been upping their earnings outlook across the board over the last 60 days, undoubtedly a bullish signal. For the upcoming quarter, the $2.42 EPS estimate reflects a sizable 43% growth in earnings from the year-ago quarter.
Additionally, earnings are expected to climb 43% in FY22 and an additional 9.3% in FY23.
ADI's forward earnings multiple sits at 18.3X, well below the median of 21.1X over the last five years and nowhere near 2020 highs of 29.2X. Furthermore, the value represents a slight 2% discount relative to the S&P 500's forward P/E ratio of 18.6X.
ADI enjoys rewarding its shareholders via its 1.8% annual dividend yield with a payout ratio sitting at 39% of earnings. Over the last five years, ADI has increased its dividend five times, with a five-year annualized dividend growth rate of a sizable 11.3%. Additionally, the yield is higher than that of the S&P 500.
Bottom Line
Large-cap stocks provide a higher level of defense compared to others. Additionally, these companies have proven themselves over their lifetime and operate within established industries.
All three companies carry the highly coveted Zacks Rank #1 (Strong Buy), which further instills confidence as to why they would be solid additions for any large-cap investor.
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.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
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/performancefor information about the performance numbers displayed in this press release.
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Cheniere Energy and PayPal have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – June 6, 2022 – Zacks Equity Research shares Cheniere Energy (LNG - Free Report) as the Bull of the Day and PayPal (PYPL - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Dollar Tree (DLTR - Free Report) , Hess Corp. (HES - Free Report) and Analog Devices (ADI - Free Report)
Here is a synopsis of all five stocks:
Bull of the Day:
Energy has been the hottest sector in the market this year. Year-to-date, there are several mega cap energy stocks which are up over 50%. How long can this hot hand last? Nobody knows for sure, but what I do know is that earnings in these companies are going one way...up. It's not only oil, other areas in the energy sector like natural gas have been rocking and rolling as well.
Today's Bull of the Day is one such stock. It's Zacks Rank #1 (Strong Buy) Cheniere Energy. Cheniere Energy, Inc., an energy infrastructure company, primarily engages in the liquefied natural gas (LNG - Free Report) related businesses in the United States. It owns and operates the Sabine Pass LNG terminal in Cameron Parish, Louisiana; and the Corpus Christi LNG terminal near Corpus Christi, Texas. The company also owns Creole Trail pipeline, a 94-mile pipeline interconnecting the Sabine Pass LNG terminal with various interstate pipelines; and operates Corpus Christi pipeline, a 21.5-mile natural gas supply pipeline that interconnects the Corpus Christi LNG terminal with various interstate and intrastate natural gas pipelines.
The reason for the favorable Zacks Rank is the recent earnings estimate revisions coming from analysts all over Wall Street. Over the last sixty days, three analysts have increased their estimates for the current year. Next year, six have pushed up their numbers while only two have cut. The bullish moves have hiked up our Zacks Consensus Estimates for the current year from $11.07 to $15.49 while next year's number is up from $8.84 to $12.22.
The stock has been on a tear since bottoming out at the COVID lows in the low $30s. Since then, the stock has rallied along with the earnings projections. Now, a little over two years since bottoming out, the stock is over $100 higher, closing last Friday at $141.96.
Bear of the Day:
It has been a rough year for tech stocks. The darlings of the market during the post-COVID surge, these stocks have been coming up short on earnings and revenue projections. The result, an absolute collapse. Just take a quick look at the NASDAQ Composite and you'll see exactly what I mean. The tech-heavy index is down 23.2% year-to-date. There have been few places to hide within tech.
Today's Bear of the Day is a stock that used to be one of the darlings in FinTech. Now, it's come under pressure as earnings have contracted. I'm talking about PayPal Holdings, Inc. operates a technology platform that enables digital payments on behalf of merchants and consumers worldwide. It provides payment solutions under the PayPal, PayPal Credit, Braintree, Venmo, Xoom, Zettle, Hyperwallet, Honey, and Paidy names. The company's payments platform allows consumers to send and receive payments in approximately 200 markets and in approximately 100 currencies, withdraw funds to their bank accounts in 56 currencies, and hold balances in their PayPal accounts in 25 currencies.
PayPal is not in the good graces of our Zacks Rank. In fact, it is currently a Zacks Rank #5 (Strong Sell). The reason is the series of negative earnings estimate revisions coming from analysts. Over the last sixty days, fifteen analysts have cut their numbers for the current year, while fourteen have followed suit for next year. The bearish moves have dropped our Zacks Consensus Estimates for the current year from $4.66 to $4.00, while next year's number is off from $5.76 to $4.82.
One feather in the cap of long-term investors here is that there is earnings growth coming back next year. While this year's earnings are going through a 13% contraction, next year growth returns at 20.59%. That's on revenue growth of 11.48% this year and 16.27% next year.
The Internet – Software industry is in the Bottom 41% of our Zacks Industry Rank.
Additional content:
3 Highly-Ranked Large-Cap Stocks Worth a Look
The market was strong yesterday, providing investors with a much-needed day in the green. Today, that fun has seemingly come to a halt, with red sweeping across the board. It's been an exhausting 2022, to say the least, with sellers remaining in control and pushing bulls out of the arena at seemingly every turn.
With the Fed pivoting to a hawkish position, the stock market has priced in the impact of higher borrowing rates. This, in turn, with soaring energy costs and supply-chain bottlenecks, have all spoiled the fun year-to-date.
On a brighter note, the indices are still well above their 2022 lows, which any investor can celebrate. The five-year chart below illustrates that the S&P 500 has bounced off of March 2021 levels so far, another positive note.
A staple found within many portfolios is large-cap stocks. Large-cap stocks are typically classified by companies with market valuations of $10 billion or more.
Large-cap companies are generally more mature, well-known companies within established industries. These stocks are less volatile, have greater coverage, and typically pay dividends. Additionally, they provide stability and pose less risk – these companies are less likely to face an economic or business circumstance that will cause insolvency.
Let's look at three large-cap stocks – Dollar Tree, Hess Corp., and Analog Devices – that all sport the highly coveted Zacks Rank #1 (Strong Buy) and why these stocks would be solid bets for investors looking for large-cap exposure.
Hess Corporation
Hess Corp. is a globally integrated energy company engaging in the exploration, production, development, transportation, purchase and sale of crude oil, natural gas liquids, and natural gas. Year-to-date, shares have been blistering hot, increasing nearly 73% in value and easily outperforming the S&P 500.
The company has reported strong quarterly results. Over its last four quarters, the average EPS surprise has been a double-digit 13%, and in its latest quarter, HES beat bottom-line estimates by a solid 16%.
In addition to solid quarterly results, analysts have been upping their bottom-line outlook rapidly over the last 60 days. For the upcoming quarterly release, the $2.24 EPS estimate reflects a jaw-dropping 830% expansion in the bottom line from the year-ago quarter.
Additionally, for FY22, earnings are expected to expand by a triple-digit 310%, and for FY23, the bottom line is expected to grow by an additional 40%.
The company's forward price-to-sales ratio of 3.5X is well below 2021 highs of 4.5X and represents a steep 31% discount relative to the S&P 500's value of 4.1X.
For investors who seek a stream of income, HES has that covered with its 1.19% annual dividend yield with a payout ratio sitting at 56% of earnings. Additionally, the company has increased its dividend once over the last five years, with a five-year annualized dividend growth rate of 2.3%.
The dividend yield is just marginally below the S&P 500's 1.43% yield.
Dollar Tree
Dollar Tree is an operator of discount variety stores offering merchandise and other assortments, operating in all types of sized cities. Year-to-date, DLTR shares have been a hot item, increasing nearly 15% in value and easily outpacing the general market.
The company has chained together an impressive streak of ten consecutive bottom-line beats dating back to 2020, and over its last four quarterly reports, Dollar Tree has exceeded earnings estimates by 13%, on average. Furthermore, the company smoked EPS estimates by a sizable 20% in its latest quarterly release.
The Consensus Estimate Trend for the upcoming quarter has retraced by a concerning 8%, but the $1.56 EPS estimate still displays a notable 26% growth in earnings from the year-ago quarter. Additionally, earnings are forecasted to grow 40% in FY22 and an additional 14% in FY23.
Looking at valuation levels, Dollar Tree's forward price-to-sales ratio of 1.3X is nicely below highs of 1.4X earlier this year and just above its median of 1.0X over the last five years. Additionally, the value represents a steep 67% discount relative to the S&P 500's value.
Analog Devices
Analog Devices is an original equipment manufacturer of semiconductor devices, specifically analog, mixed-signal, and digital signal processing integrated circuits. Year-to-date, shares have displayed a valuable level of defense relative to the S&P 500, decreasing 5% in value.
The company has been on a blazing-hot earnings streak, exceeding EPS expectations in ten consecutive quarters. Over its last four quarterly reports, the company has an average EPS surprise of a notable 7.7%, and in its latest quarter, ADI beat bottom-line estimates by a substantial 13%.
Analysts have been upping their earnings outlook across the board over the last 60 days, undoubtedly a bullish signal. For the upcoming quarter, the $2.42 EPS estimate reflects a sizable 43% growth in earnings from the year-ago quarter.
Additionally, earnings are expected to climb 43% in FY22 and an additional 9.3% in FY23.
ADI's forward earnings multiple sits at 18.3X, well below the median of 21.1X over the last five years and nowhere near 2020 highs of 29.2X. Furthermore, the value represents a slight 2% discount relative to the S&P 500's forward P/E ratio of 18.6X.
ADI enjoys rewarding its shareholders via its 1.8% annual dividend yield with a payout ratio sitting at 39% of earnings. Over the last five years, ADI has increased its dividend five times, with a five-year annualized dividend growth rate of a sizable 11.3%. Additionally, the yield is higher than that of the S&P 500.
Bottom Line
Large-cap stocks provide a higher level of defense compared to others. Additionally, these companies have proven themselves over their lifetime and operate within established industries.
All three companies carry the highly coveted Zacks Rank #1 (Strong Buy), which further instills confidence as to why they would be solid additions for any large-cap investor.
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.
See Stocks Free >>
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
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/performancefor information about the performance numbers displayed in this press release.