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Illumina and Best Buy have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – August 1, 2022 – Zacks Equity Research shares Illumina (ILMN - Free Report) as the Bull of the Day and Best Buy (BBY - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Starbucks Corporation (SBUX - Free Report) , The Wendy's Co. (WEN - Free Report) and Ulta Beauty (ULTA - Free Report) .
Illumina, is the $32 billion leader of genetic sequencing equipment for biotechnology companies and research labs around the world.
San Diego based Illumina provides tools and integrated systems for analysis of genetic variation and function. Using its proprietary technologies, the company delivers innovative sequencing and array-based solutions for genotyping, copy number variation analysis, methylation studies, and gene expression profiling of DNA and RNA.
Its customers include leading genomic research centers, academic institutions, government laboratories, hospitals and reference laboratories as well as pharmaceutical, biotechnology, agrigenomics, commercial molecular diagnostic and consumer genomics companies.
Illumina generates revenue from two segments – Product and Service.
Product revenues (87.7% of total revenues in 2021; up 45.1% from 2020) are primarily attributed to the partnerships and collaborations to develop distributable clinical in-vitro diagnostics (IVDs) for Illumina sequencers. Product revenues consist of sales proceeds from the Consumables and Instruments segment used in genetic analysis. This includes reagents, flow cells, and BeadChips based on the company's proprietary technologies.
Service revenues (12.3%, up 10.7%) include genotyping and sequencing services as well as instrument maintenance contracts.
Next-Generation Sequencing
Illumina’s portfolio of sequencing platforms represents a family of systems that are designed to meet the workflow, output, and accuracy demands of a full range of sequencing applications.
The company's MiSeq sequencing system is a low-cost desktop sequencing system that provides individual researchers with rapid turnaround time, high accuracy and streamlined workflow.
NextSeq 500 provides flexibility from whole genome sequencing to targeted panels in a desktop platform. The HiSeq 2500 sequencing system allows customers to sequence an entire human genome in approximately a day.
How ILMN Rose Up in the Zacks Rank
Illumina exited first-quarter 2022 with better-than-expected earnings and revenues. The robust year-over-year improvement in Core Illumina businesses looks encouraging.
Revenue contributions from the newly-formed GRAIL business, primarily from Galleri test fees, bode well. NovaSeq consumable and instrument shipments reached new highs during the quarter as the company witnessed robust demand for NextSeq 1000, 2000 from new customers.
The company also saw significant growth in the installed base and a record backlog, instilling optimism. Orders for sequencing consumables surpassed $1 billion for the first time in the quarter, setting a new high for the company.
While there was a significant year-over-year decline in adjusted earnings per share, analysts have been raising estimates for next year. So while this fiscal year will see a 30% drop in EPS, next year bounces right back with a 30% gain.
And more encouraging is the steady topline with projected 15% growth this year to $5.2 billion and next year is forecast to cross $6 billion for a 16.5% advance.
GRAIL Merger Controversy: It's Complicated
Five years ago, Illumina spun-off its GRAIL cancer-detection unit. Last year, management decided it would be better to have the company folded back in.
GRAIL's Galleri blood test detects 50 different cancers before they are symptomatic. Illumina's acquisition of GRAIL will accelerate access and adoption of this life-saving test worldwide.
Since the deal was announced last summer, it has been under tough scrutiny from the EU. This is unfortunate because as Illumina wrote last August...
The Galleri test is available but costs $950 because it is not covered by insurance. Reuniting the two companies is the fastest way to make the test broadly available and affordable. Illumina's expertise in market development and access has resulted in coverage of genomic testing for over 1 billion people around the world already. This experience will help lead to coverage and reimbursement for the Galleri test.
Late last week Reuters reported that Illumina's Grail deal was likely to be blocked by EU regulators. Illumina's proposed takeover of Grail will likely be blocked by EU antitrust regulators amid worries about concessions offered by the U.S. life sciences firm, Reuters' Foo Yun Chee reported, citing people familiar with the matter.
There are doubts whether the concessions that Illumina offered last week to allay EU concerns about the transaction will increase competition, the author noted. The company has offered competitors royalty-free global licenses for some of its patents and a three-year patent truce with China's BGI in Europe in an attempt to address EU antitrust concerns.
Bullish Analyst Reaction Regardless of Merger
On July 14, Canaccord analyst Kyle Mikson noted the EU court ruled the Illumina merger with GRAIL can continue but he said the ruling is not a reflection of the merits of the merger. The analyst remains positive on Illumina's outlook with or without GRAIL and believes investors underappreciate the company's strong core performance. Mikson reiterated his Buy rating and $520 price target on Illumina shares.
On July 13, Piper Sandler analyst David Westenberg observed that the EU regulatory uncertainty increased the probability that Illumina would have to completely spin off the asset, which would be a "net positive for the stock if it happened." Westenberg, who views the EU ruling as a "head scratcher" since both companies are US-based, says the news delays a "clearing event" for Illumina. Nonetheless, he reiterates an Overweight rating on the shares, saying the company has the most complete sequencing product line in a 20% growth market.
Reproductive and Genetic Health Markets
Illumina is currently keeping well with its goals to strengthen foothold in the multi-billion gene sequencing world-wide market with some highly competitive products in its existing portfolio and pipeline. This market is developing rapidly on a global scale which has allowed the company to witness a persistent growth in the number of non-invasive prenatal test (NIPT) samples.
Here's how the company describes their position in this market...
Based on past experience, when Illumina enters a market, the market expands. When Illumina entered the non-invasive prenatal testing space, prices dropped, reimbursement expanded, the number of providers increased, and more expectant parents had access to testing.
I wholeheartedly agree with this view as I've been a frequent investor in Natera, a $4 billion diagnostics company which specializes in NIPS (non-invasive prenatal screening). This is a vital area that needs to be available to every woman and her baby regardless of cost.
Bottom line on ILMN: Be a long-term buyer near $200. This genomics leader will be doing exciting science and medicine for the next few decades in the Century of Biology.
Disclosure: I own shares of ILMN and NTRA for the Zacks Healthcare Innovators portfolio.
Best Buy has been an early casualty of the recession, with analysts cutting estimates sharply in the past few months.
The current revenue consensus for this fiscal year (ends January) has slipped to $47 billion for a 9% annual decline.
And the driver of the Zacks Rank, EPS revisions, has seen a 21% hair-cut, since the company's last quarterly report in May, from $8.97 to $7.08.
This represents a 29% annual drop in earnings. And next year's EPS consensus forecast has also been slashed 21% from $10.58 to $8.35.
Management Drops the Hammer on Comparable Sales Forecast
Most of the downward EPS revisions came in the last week as the company announced it was trimming forecasts for its comparable sales and operating margins.
A challenging operating environment and softness in consumer demand are making things tough for Best Buy. Higher gasoline and food prices are squeezing disposable income, and consumers are compelled to curtail spending on discretionary items such as electronics.
Corie Barry, Best Buy CEO, said, "As high inflation has continued and consumer sentiment has deteriorated, customer demand within the consumer electronics industry has softened even further, leading to Q2 financial results below the expectations we shared in May."
Best Buy now envisions second-quarter fiscal 2023 comparable sales to decline about 13% against a 19.6% increase registered in the year-ago period. The current projection is significantly lower than what the company had projected in May.
It had earlier guided second-quarter comparable sales to be roughly in line with an 8% decline witnessed in the first quarter.
Management estimates revenues to be approximately 7.5% higher than the pre-pandemic second-quarter fiscal 2020. The electronics retailer foresees non-GAAP operating income rate to be around 3.7%. Additionally, it expects inventory at the end of the second quarter to be roughly flat year over year.
For fiscal 2023, Best Buy now expects comparable sales to decrease around 11% compared with its prior call of a 3-6% decline. It now anticipates non-GAAP operating income rate to be approximately 4%, down from the previously estimated range of 5.2% to 5.4%.
In order to navigate the tough macro-economic conditions and mitigate the impact of a weak sales environment, Best Buy is likely to undertake cost-containment actions to manage profitability. It remains committed to a quarterly dividend of 88 cents a share but has halted share repurchases.
Analyst Reactions
DA Davidson analyst Michael Baker lowered his price target on Best Buy to $88 from $110 and kept a Buy rating on the shares. The company negatively pre-announced Q2 and cut its guidance for the year amid weaker discretionary spending, but the analyst believes the market had already anticipated a miss given negative consumer electronics retailers from other retailers like Walmart and Target. Baker adds that the low expectations and de-risking of the estimates may help limit the damage to the stock.
Wells Fargo analyst Zachary Fadem lowered the firm's price target on Best Buy to $70 from $82 and kept an Equal Weight rating on the shares. While investors were bracing for this, Best Buy's second straight outlook reduction runs deep. Still, in the wake of Monday's Walmart reset, "the cross-contagion shouldn't be a total surprise," he concluded.
Bottom line on BBY: When Best Buy reports its Q2 later this month, we could see the trough in both performance and expectations. But there's no rush to buy that trough until we know more about the second half outlook for the economy and the electronics retail business. The Zacks Rank will let you know.
Additional content:
What to Expect from Starbucks' (SBUX - Free Report) Q3 Earnings?
Starbucks Corporation is scheduled to report its third-quarter fiscal 2022 results on Aug 2, after the closing bell. In the last reported quarter, the company delivered an earnings miss of 1.7%.
Q3 Estimates
The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at 77 cents per share, indicating a decline of 23.8% year over year. In the past seven days, earnings estimates for the current quarter have remained stable. The consensus mark for revenues stands at $8.21 billion, suggesting growth of 9.5% from the year-ago quarter.
Factors to Note
The company's fiscal third-quarter top line is likely to have benefited from comps growth and digitalization. An increase in transaction and average ticket growth might have favored comps growth in the quarter to be reported. The company has been gaining from an increase in 90-day active Starbucks Rewards members. The company continues to gain from strong expansion efforts.
Robust North America segment sales are likely to have driven the company's top line. The Zacks Consensus Estimate for revenues for North America and International segments is pegged at $6,141 million and $1,695 million, suggesting a year-over-year improvement of 13.7% and 2.2%, respectively.
However, dismal performance in China is likely to have negatively impacted the company's results. During the second-quarter conference call, the company said that due to uncertainty in China, it is unable to predict its performance in the country during the back half of the year. Due to the Shanghai lockdown and resurgence of the virus in other cities, the company expects its China performance to worsen in third-quarter 2022. At the end of second-quarter 2022, the company noted that nearly one-third of its stores in China remain temporarily closed or are offering mobile ordering channels only.
Inflationary pressures and increased investments in store partner wages and benefits are likely to have hurt the margin in the quarter-to-be reported. We expect the adjusted operating margin in third-quarter 2022 to be 19.9% compared with 20.5% reported in the prior-year quarter.
What the Zacks Model Unveils
Our proven model doesn't conclusively predict an earnings beat for Starbucks this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Earnings ESP: Starbucks has an Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, of -0.80%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Zacks Rank:The company currently carries a Zacks Rank #3 (Hold).
Stocks Poised to Beat Estimates
Here are some stocks worth considering from the Zacks Retail-Wholesale space as our model shows that these have the right combination of elements to beat on earnings this season:
Shares of Wendy's have declined 8.8% in the past year. WEN's earnings surpassed the consensus mark in three out of four quarters and missed once, the average being 14.2%.
Ulta Beauty currently has an Earnings ESP of +2.46% and a Zacks Rank #1. The company is likely to register bottom-line improvement when it reports second-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $4.78 suggests an improvement of 4.8% from the year-ago quarter.
Ulta Beauty's top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues stands at $2.18 billion, which indicates an improvement of 10.8% from the figure reported in the prior-year quarter. ULTA has a trailing four-quarter earnings surprise of 49.8%, on average.
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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Illumina and Best Buy have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – August 1, 2022 – Zacks Equity Research shares Illumina (ILMN - Free Report) as the Bull of the Day and Best Buy (BBY - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Starbucks Corporation (SBUX - Free Report) , The Wendy's Co. (WEN - Free Report) and Ulta Beauty (ULTA - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Illumina, is the $32 billion leader of genetic sequencing equipment for biotechnology companies and research labs around the world.
San Diego based Illumina provides tools and integrated systems for analysis of genetic variation and function. Using its proprietary technologies, the company delivers innovative sequencing and array-based solutions for genotyping, copy number variation analysis, methylation studies, and gene expression profiling of DNA and RNA.
Its customers include leading genomic research centers, academic institutions, government laboratories, hospitals and reference laboratories as well as pharmaceutical, biotechnology, agrigenomics, commercial molecular diagnostic and consumer genomics companies.
Illumina generates revenue from two segments – Product and Service.
Product revenues (87.7% of total revenues in 2021; up 45.1% from 2020) are primarily attributed to the partnerships and collaborations to develop distributable clinical in-vitro diagnostics (IVDs) for Illumina sequencers. Product revenues consist of sales proceeds from the Consumables and Instruments segment used in genetic analysis. This includes reagents, flow cells, and BeadChips based on the company's proprietary technologies.
Service revenues (12.3%, up 10.7%) include genotyping and sequencing services as well as instrument maintenance contracts.
Next-Generation Sequencing
Illumina’s portfolio of sequencing platforms represents a family of systems that are designed to meet the workflow, output, and accuracy demands of a full range of sequencing applications.
The company's MiSeq sequencing system is a low-cost desktop sequencing system that provides individual researchers with rapid turnaround time, high accuracy and streamlined workflow.
NextSeq 500 provides flexibility from whole genome sequencing to targeted panels in a desktop platform. The HiSeq 2500 sequencing system allows customers to sequence an entire human genome in approximately a day.
How ILMN Rose Up in the Zacks Rank
Illumina exited first-quarter 2022 with better-than-expected earnings and revenues. The robust year-over-year improvement in Core Illumina businesses looks encouraging.
Revenue contributions from the newly-formed GRAIL business, primarily from Galleri test fees, bode well. NovaSeq consumable and instrument shipments reached new highs during the quarter as the company witnessed robust demand for NextSeq 1000, 2000 from new customers.
The company also saw significant growth in the installed base and a record backlog, instilling optimism. Orders for sequencing consumables surpassed $1 billion for the first time in the quarter, setting a new high for the company.
While there was a significant year-over-year decline in adjusted earnings per share, analysts have been raising estimates for next year. So while this fiscal year will see a 30% drop in EPS, next year bounces right back with a 30% gain.
And more encouraging is the steady topline with projected 15% growth this year to $5.2 billion and next year is forecast to cross $6 billion for a 16.5% advance.
GRAIL Merger Controversy: It's Complicated
Five years ago, Illumina spun-off its GRAIL cancer-detection unit. Last year, management decided it would be better to have the company folded back in.
GRAIL's Galleri blood test detects 50 different cancers before they are symptomatic. Illumina's acquisition of GRAIL will accelerate access and adoption of this life-saving test worldwide.
Since the deal was announced last summer, it has been under tough scrutiny from the EU. This is unfortunate because as Illumina wrote last August...
The Galleri test is available but costs $950 because it is not covered by insurance. Reuniting the two companies is the fastest way to make the test broadly available and affordable. Illumina's expertise in market development and access has resulted in coverage of genomic testing for over 1 billion people around the world already. This experience will help lead to coverage and reimbursement for the Galleri test.
Late last week Reuters reported that Illumina's Grail deal was likely to be blocked by EU regulators. Illumina's proposed takeover of Grail will likely be blocked by EU antitrust regulators amid worries about concessions offered by the U.S. life sciences firm, Reuters' Foo Yun Chee reported, citing people familiar with the matter.
There are doubts whether the concessions that Illumina offered last week to allay EU concerns about the transaction will increase competition, the author noted. The company has offered competitors royalty-free global licenses for some of its patents and a three-year patent truce with China's BGI in Europe in an attempt to address EU antitrust concerns.
Bullish Analyst Reaction Regardless of Merger
On July 14, Canaccord analyst Kyle Mikson noted the EU court ruled the Illumina merger with GRAIL can continue but he said the ruling is not a reflection of the merits of the merger. The analyst remains positive on Illumina's outlook with or without GRAIL and believes investors underappreciate the company's strong core performance. Mikson reiterated his Buy rating and $520 price target on Illumina shares.
On July 13, Piper Sandler analyst David Westenberg observed that the EU regulatory uncertainty increased the probability that Illumina would have to completely spin off the asset, which would be a "net positive for the stock if it happened." Westenberg, who views the EU ruling as a "head scratcher" since both companies are US-based, says the news delays a "clearing event" for Illumina. Nonetheless, he reiterates an Overweight rating on the shares, saying the company has the most complete sequencing product line in a 20% growth market.
Reproductive and Genetic Health Markets
Illumina is currently keeping well with its goals to strengthen foothold in the multi-billion gene sequencing world-wide market with some highly competitive products in its existing portfolio and pipeline. This market is developing rapidly on a global scale which has allowed the company to witness a persistent growth in the number of non-invasive prenatal test (NIPT) samples.
Here's how the company describes their position in this market...
Based on past experience, when Illumina enters a market, the market expands. When Illumina entered the non-invasive prenatal testing space, prices dropped, reimbursement expanded, the number of providers increased, and more expectant parents had access to testing.
I wholeheartedly agree with this view as I've been a frequent investor in Natera, a $4 billion diagnostics company which specializes in NIPS (non-invasive prenatal screening). This is a vital area that needs to be available to every woman and her baby regardless of cost.
Bottom line on ILMN: Be a long-term buyer near $200. This genomics leader will be doing exciting science and medicine for the next few decades in the Century of Biology.
Disclosure: I own shares of ILMN and NTRA for the Zacks Healthcare Innovators portfolio.
Bear of the Day:
Best Buy has been an early casualty of the recession, with analysts cutting estimates sharply in the past few months.
The current revenue consensus for this fiscal year (ends January) has slipped to $47 billion for a 9% annual decline.
And the driver of the Zacks Rank, EPS revisions, has seen a 21% hair-cut, since the company's last quarterly report in May, from $8.97 to $7.08.
This represents a 29% annual drop in earnings. And next year's EPS consensus forecast has also been slashed 21% from $10.58 to $8.35.
Management Drops the Hammer on Comparable Sales Forecast
Most of the downward EPS revisions came in the last week as the company announced it was trimming forecasts for its comparable sales and operating margins.
A challenging operating environment and softness in consumer demand are making things tough for Best Buy. Higher gasoline and food prices are squeezing disposable income, and consumers are compelled to curtail spending on discretionary items such as electronics.
Corie Barry, Best Buy CEO, said, "As high inflation has continued and consumer sentiment has deteriorated, customer demand within the consumer electronics industry has softened even further, leading to Q2 financial results below the expectations we shared in May."
Best Buy now envisions second-quarter fiscal 2023 comparable sales to decline about 13% against a 19.6% increase registered in the year-ago period. The current projection is significantly lower than what the company had projected in May.
It had earlier guided second-quarter comparable sales to be roughly in line with an 8% decline witnessed in the first quarter.
Management estimates revenues to be approximately 7.5% higher than the pre-pandemic second-quarter fiscal 2020. The electronics retailer foresees non-GAAP operating income rate to be around 3.7%. Additionally, it expects inventory at the end of the second quarter to be roughly flat year over year.
For fiscal 2023, Best Buy now expects comparable sales to decrease around 11% compared with its prior call of a 3-6% decline. It now anticipates non-GAAP operating income rate to be approximately 4%, down from the previously estimated range of 5.2% to 5.4%.
In order to navigate the tough macro-economic conditions and mitigate the impact of a weak sales environment, Best Buy is likely to undertake cost-containment actions to manage profitability. It remains committed to a quarterly dividend of 88 cents a share but has halted share repurchases.
Analyst Reactions
DA Davidson analyst Michael Baker lowered his price target on Best Buy to $88 from $110 and kept a Buy rating on the shares. The company negatively pre-announced Q2 and cut its guidance for the year amid weaker discretionary spending, but the analyst believes the market had already anticipated a miss given negative consumer electronics retailers from other retailers like Walmart and Target. Baker adds that the low expectations and de-risking of the estimates may help limit the damage to the stock.
Wells Fargo analyst Zachary Fadem lowered the firm's price target on Best Buy to $70 from $82 and kept an Equal Weight rating on the shares. While investors were bracing for this, Best Buy's second straight outlook reduction runs deep. Still, in the wake of Monday's Walmart reset, "the cross-contagion shouldn't be a total surprise," he concluded.
Bottom line on BBY: When Best Buy reports its Q2 later this month, we could see the trough in both performance and expectations. But there's no rush to buy that trough until we know more about the second half outlook for the economy and the electronics retail business. The Zacks Rank will let you know.
Additional content:
What to Expect from Starbucks' (SBUX - Free Report) Q3 Earnings?
Starbucks Corporation is scheduled to report its third-quarter fiscal 2022 results on Aug 2, after the closing bell. In the last reported quarter, the company delivered an earnings miss of 1.7%.
Q3 Estimates
The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at 77 cents per share, indicating a decline of 23.8% year over year. In the past seven days, earnings estimates for the current quarter have remained stable. The consensus mark for revenues stands at $8.21 billion, suggesting growth of 9.5% from the year-ago quarter.
Factors to Note
The company's fiscal third-quarter top line is likely to have benefited from comps growth and digitalization. An increase in transaction and average ticket growth might have favored comps growth in the quarter to be reported. The company has been gaining from an increase in 90-day active Starbucks Rewards members. The company continues to gain from strong expansion efforts.
Robust North America segment sales are likely to have driven the company's top line. The Zacks Consensus Estimate for revenues for North America and International segments is pegged at $6,141 million and $1,695 million, suggesting a year-over-year improvement of 13.7% and 2.2%, respectively.
However, dismal performance in China is likely to have negatively impacted the company's results. During the second-quarter conference call, the company said that due to uncertainty in China, it is unable to predict its performance in the country during the back half of the year. Due to the Shanghai lockdown and resurgence of the virus in other cities, the company expects its China performance to worsen in third-quarter 2022. At the end of second-quarter 2022, the company noted that nearly one-third of its stores in China remain temporarily closed or are offering mobile ordering channels only.
Inflationary pressures and increased investments in store partner wages and benefits are likely to have hurt the margin in the quarter-to-be reported. We expect the adjusted operating margin in third-quarter 2022 to be 19.9% compared with 20.5% reported in the prior-year quarter.
What the Zacks Model Unveils
Our proven model doesn't conclusively predict an earnings beat for Starbucks this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Earnings ESP: Starbucks has an Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, of -0.80%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Zacks Rank:The company currently carries a Zacks Rank #3 (Hold).
Stocks Poised to Beat Estimates
Here are some stocks worth considering from the Zacks Retail-Wholesale space as our model shows that these have the right combination of elements to beat on earnings this season:
The Wendy's Co. has an Earnings ESP of +0.46% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.
Shares of Wendy's have declined 8.8% in the past year. WEN's earnings surpassed the consensus mark in three out of four quarters and missed once, the average being 14.2%.
Ulta Beauty currently has an Earnings ESP of +2.46% and a Zacks Rank #1. The company is likely to register bottom-line improvement when it reports second-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $4.78 suggests an improvement of 4.8% from the year-ago quarter.
Ulta Beauty's top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues stands at $2.18 billion, which indicates an improvement of 10.8% from the figure reported in the prior-year quarter. ULTA has a trailing four-quarter earnings surprise of 49.8%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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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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.