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United Rentals and FedEx have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – October 6, 2022 – Zacks Equity Research shares United Rentals, Inc. (URI - Free Report) as the Bull of the Day and FedEx (FDX - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onExxon Mobil Corporation (XOM - Free Report) , TotalEnergiesSE (TTE - Free Report) and Equinor ASA (EQNR - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
The Zacks Building Products – Miscellaneous Industry is currently ranked in the top 21% of all Zacks Industries (52 out of 251).
According to studies, 50% of a stock's price movement can be attributed to its group, making it clear why it’s critical for investors to target stocks in a thriving industry.
A stock in the realm, United Rentals, Inc. sports the highly-coveted Zacks Rank #1 (Strong Buy) paired with an overall VGM Score of an A.
United Rentals, Inc. is the largest equipment rental company in the world, with an integrated network of rental locations in the United States, Canada, and Europe.
URI’s customer base includes construction and industrial companies, utilities, municipalities, government agencies, independent contractors and homeowners, and other individuals that use equipment for projects that range from simple repairs to major renovations.
Analysts have been bullish across the board over the last several months, pushing the stock into a Zacks Rank #1 (Strong Buy).
Let’s take a closer look.
Share Performance
Year-to-date, URI shares have been notably defensive, down roughly 11% and widely outperforming the general market. In fact, URI shares have even outperformed the S&P 500 over a much longer five-year timeframe, up a triple-digit 106% vs. the S&P 500’s 66% return. Posting market-beating returns across several timeframes indicates that buyers have consistently been present.
Valuation
URI shares are more than reasonably priced, further bolstered by its Style Score of an A for Value.
The company carries a 9.3X forward earnings multiple, nicely beneath its 10.8X five-year median and reflecting a rock-solid 20% discount relative to its Zacks Industry.
Growth Estimates
URI’s growth profile is inspiring; the Zacks Consensus EPS Estimate of $31.73 for FY22 reflects a sizable 43% Y/Y uptick in earnings.
Further, the company’s bottom line is projected to tack on an additional 11% of growth in FY23.
And look out for URI’s upcoming quarterly print – the Zacks Consensus EPS Estimate of $8.88 suggests earnings growth of 35% from the year-ago quarter.
Quarterly Performance
To top it off, United Rentals has consistently exceeded quarterly estimates, penciling in eight EPS beats over its last ten quarters. Just in its latest release, URI registered a sizable 20% bottom line beat.
Revenue results paint the same positive story; URI has beat top line estimates in nine of its last ten quarterly prints. Below is a chart illustrating the company’s revenue on a quarterly basis.
Bottom Line
One of the best ways investors can find expected winners is by utilizing the Zacks Rank – one of the most potent market tools out there that gives investors a massive advantage.
A portfolio consisting of Zacks Rank #1 (Strong Buy) stocks has beaten the market in 26 of the last 31 years with an average annual return of 24%.
Additionally, the top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.
United Rentals, Inc. would be an excellent stock for investors to keep on their watchlists, as displayed by its Zack Rank #1 (Strong Buy).
Bear of the Day:
In an announcement that shook the market in September, FedEx withdrew its FY23 earnings forecast due to a volatile operating environment.
It was a major shock, as the original guidance was given just a few months back in June, the same month that long-time CEO Fred Smith vacated his post.
Following a multi-year uphill battle with the integration of its TNT Express acquisition, the news further pushed sentiment down.
Analysts have taken note of the new guidance, slashing their bottom-line outlook across all timeframes with a 100% revision agreement and pushing the stock into a Zacks Rank #5 (Strong Sell).
Let’s take a quick look under the hood.
Share Performance
Year-to-date, FDX shares have undergone adverse price action, down nearly 40% and widely underperforming the general market. Upon viewing a longer five-year timeframe, the share performance paints a similar story; down nearly 24%, FDX shares have widely lagged behind the S&P 500’s 66% gain over the last five years. As briefly mentioned earlier, a so-far unfavorable acquisition of TNT Express in 2016 has weighed heavily on the stock, with the acquisition ending up costing millions more than previously expected.
Quarterly Results
FDX has struggled to exceed bottom line estimates as of late, falling short of the Zacks Consensus EPS Estimate in five of its last six quarterly reports. Just in its latest print, FDX missed on the bottom line by nearly 7%.
While bottom line results have left much to be desired, the company’s top line appears to be in much better shape – FDX has penciled in nine revenue beats over its last ten quarters.
Below is a chart illustrating the company’s revenue on a quarterly basis.
Growth Estimates
FedEx’s earnings are forecasted to take a sizable hit in its current fiscal year (FY23), with the Zacks Consensus EPS Estimate of $15.20 reflecting a steep 26% Y/Y decrease.
Still, things look to kick back into the green for FY24, with estimates calling for 25% Y/Y earnings growth.
Focusing more on the near-term, the Zacks Consensus EPS Estimate of $3.12 for its upcoming earnings report suggests a 35% drop off in quarterly earnings from year-ago quarterly EPS of $4.83.
Bottom Line
Disheartening bottom line results and recently slashed guidance paint a grim picture for the company in the short term.
FedEx is a Zacks Rank #5 (Strong Sell), telling us it has a weak near-term earnings outlook.
Instead, investors should pivot to stocks that either carry a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) – these stocks have a much stronger earnings outlook and potential to deliver explosive gains in the short-term.
Additional content:
3 Energy Companies Set to Win the Race to Net-Zero Emissions
Although fossil fuels are the prime sources of global energy, economies across the world are steadily transitioning to clean energy. Oil and gas companies continue to progress toward a low-carbon future, as there has been constant pressure to curb climate change.
Several companies are readily modifying businesses to incorporate renewables in their operations. This year has been a game-changer as major oil producers convinced investors with their proposals to lower carbon emissions. Although renewable energy can satisfy the global energy demand, it will not eliminate oil and natural gas demand. Hydrocarbon demand will increase at a slower rate.
Per the U.S. Energy Information Administration, renewable consumption will grow through 2050 at an accelerating pace. Over the same period, the demand for oil and natural gas will grow, but at a slower pace. Renewables are expected to account for 95% of the increase in global power capacity through 2026.
As the focus on energy transition accelerates, let's look at some of the energy companies outlining net-zero commitments by 2050. Three integrated energy companies are Exxon Mobil Corporation, TotalEnergiesSE and Equinor ASA.
ExxonMobil is making efforts to create more-efficient fuels while reducing emissions. XOM plans to reduce greenhouse gas emissions by 40-50% by 2030 from its upstream business. The aggressive plan will be followed by the reduction in methane intensity and flaring intensity by 70-80% and 60-70%, respectively.
ExxonMobil plans to invest more than $15 billion over the next six years on projects associated with reducing emissions. XOM is committed to helping customers reduce emissions by investing in carbon capture and storage, hydrogen, and biofuels.
TotalEnergies aims to achieve net-zero emissions by 2050 and is taking the necessary measures to attain the same. TTE plans to expand the clean energy business to reach 35 gigawatts (GW) and 100 GW of gross production capacity from renewable sources by 2025 and 2030, respectively.
TotalEnergies is building a portfolio of low-carbon businesses, which could account for 15-20% of sales by 2040. In the near term, TTE plans to have more than 16 GW of renewable gross capacity in operation by the end of 2022.
Equinor's key strategy is to capitalize on the renewable energy space and align operations with the Paris Climate Agreement. To capitalize on the rising clean energy demand, EQNR is actively investing in renewable energy projects, comprising power generation from solar and wind energy.
Equinor expects to boost production capacities from renewables to 4-6 GW by 2026. By 2035, it plans to boost the capacity to 12-16 GW. In 2021, Equinor recorded capital gains of $1.4 billion from renewables.
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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United Rentals and FedEx have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – October 6, 2022 – Zacks Equity Research shares United Rentals, Inc. (URI - Free Report) as the Bull of the Day and FedEx (FDX - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Exxon Mobil Corporation (XOM - Free Report) , TotalEnergiesSE (TTE - Free Report) and Equinor ASA (EQNR - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
The Zacks Building Products – Miscellaneous Industry is currently ranked in the top 21% of all Zacks Industries (52 out of 251).
According to studies, 50% of a stock's price movement can be attributed to its group, making it clear why it’s critical for investors to target stocks in a thriving industry.
A stock in the realm, United Rentals, Inc. sports the highly-coveted Zacks Rank #1 (Strong Buy) paired with an overall VGM Score of an A.
United Rentals, Inc. is the largest equipment rental company in the world, with an integrated network of rental locations in the United States, Canada, and Europe.
URI’s customer base includes construction and industrial companies, utilities, municipalities, government agencies, independent contractors and homeowners, and other individuals that use equipment for projects that range from simple repairs to major renovations.
Analysts have been bullish across the board over the last several months, pushing the stock into a Zacks Rank #1 (Strong Buy).
Let’s take a closer look.
Share Performance
Year-to-date, URI shares have been notably defensive, down roughly 11% and widely outperforming the general market. In fact, URI shares have even outperformed the S&P 500 over a much longer five-year timeframe, up a triple-digit 106% vs. the S&P 500’s 66% return. Posting market-beating returns across several timeframes indicates that buyers have consistently been present.
Valuation
URI shares are more than reasonably priced, further bolstered by its Style Score of an A for Value.
The company carries a 9.3X forward earnings multiple, nicely beneath its 10.8X five-year median and reflecting a rock-solid 20% discount relative to its Zacks Industry.
Growth Estimates
URI’s growth profile is inspiring; the Zacks Consensus EPS Estimate of $31.73 for FY22 reflects a sizable 43% Y/Y uptick in earnings.
Further, the company’s bottom line is projected to tack on an additional 11% of growth in FY23.
And look out for URI’s upcoming quarterly print – the Zacks Consensus EPS Estimate of $8.88 suggests earnings growth of 35% from the year-ago quarter.
Quarterly Performance
To top it off, United Rentals has consistently exceeded quarterly estimates, penciling in eight EPS beats over its last ten quarters. Just in its latest release, URI registered a sizable 20% bottom line beat.
Revenue results paint the same positive story; URI has beat top line estimates in nine of its last ten quarterly prints. Below is a chart illustrating the company’s revenue on a quarterly basis.
Bottom Line
One of the best ways investors can find expected winners is by utilizing the Zacks Rank – one of the most potent market tools out there that gives investors a massive advantage.
A portfolio consisting of Zacks Rank #1 (Strong Buy) stocks has beaten the market in 26 of the last 31 years with an average annual return of 24%.
Additionally, the top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.
United Rentals, Inc. would be an excellent stock for investors to keep on their watchlists, as displayed by its Zack Rank #1 (Strong Buy).
Bear of the Day:
In an announcement that shook the market in September, FedEx withdrew its FY23 earnings forecast due to a volatile operating environment.
It was a major shock, as the original guidance was given just a few months back in June, the same month that long-time CEO Fred Smith vacated his post.
Following a multi-year uphill battle with the integration of its TNT Express acquisition, the news further pushed sentiment down.
Analysts have taken note of the new guidance, slashing their bottom-line outlook across all timeframes with a 100% revision agreement and pushing the stock into a Zacks Rank #5 (Strong Sell).
Let’s take a quick look under the hood.
Share Performance
Year-to-date, FDX shares have undergone adverse price action, down nearly 40% and widely underperforming the general market. Upon viewing a longer five-year timeframe, the share performance paints a similar story; down nearly 24%, FDX shares have widely lagged behind the S&P 500’s 66% gain over the last five years. As briefly mentioned earlier, a so-far unfavorable acquisition of TNT Express in 2016 has weighed heavily on the stock, with the acquisition ending up costing millions more than previously expected.
Quarterly Results
FDX has struggled to exceed bottom line estimates as of late, falling short of the Zacks Consensus EPS Estimate in five of its last six quarterly reports. Just in its latest print, FDX missed on the bottom line by nearly 7%.
While bottom line results have left much to be desired, the company’s top line appears to be in much better shape – FDX has penciled in nine revenue beats over its last ten quarters.
Below is a chart illustrating the company’s revenue on a quarterly basis.
Growth Estimates
FedEx’s earnings are forecasted to take a sizable hit in its current fiscal year (FY23), with the Zacks Consensus EPS Estimate of $15.20 reflecting a steep 26% Y/Y decrease.
Still, things look to kick back into the green for FY24, with estimates calling for 25% Y/Y earnings growth.
Focusing more on the near-term, the Zacks Consensus EPS Estimate of $3.12 for its upcoming earnings report suggests a 35% drop off in quarterly earnings from year-ago quarterly EPS of $4.83.
Bottom Line
Disheartening bottom line results and recently slashed guidance paint a grim picture for the company in the short term.
FedEx is a Zacks Rank #5 (Strong Sell), telling us it has a weak near-term earnings outlook.
Instead, investors should pivot to stocks that either carry a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) – these stocks have a much stronger earnings outlook and potential to deliver explosive gains in the short-term.
Additional content:
3 Energy Companies Set to Win the Race to Net-Zero Emissions
Although fossil fuels are the prime sources of global energy, economies across the world are steadily transitioning to clean energy. Oil and gas companies continue to progress toward a low-carbon future, as there has been constant pressure to curb climate change.
Several companies are readily modifying businesses to incorporate renewables in their operations. This year has been a game-changer as major oil producers convinced investors with their proposals to lower carbon emissions. Although renewable energy can satisfy the global energy demand, it will not eliminate oil and natural gas demand. Hydrocarbon demand will increase at a slower rate.
Per the U.S. Energy Information Administration, renewable consumption will grow through 2050 at an accelerating pace. Over the same period, the demand for oil and natural gas will grow, but at a slower pace. Renewables are expected to account for 95% of the increase in global power capacity through 2026.
As the focus on energy transition accelerates, let's look at some of the energy companies outlining net-zero commitments by 2050. Three integrated energy companies are Exxon Mobil Corporation, TotalEnergiesSE and Equinor ASA.
ExxonMobil is making efforts to create more-efficient fuels while reducing emissions. XOM plans to reduce greenhouse gas emissions by 40-50% by 2030 from its upstream business. The aggressive plan will be followed by the reduction in methane intensity and flaring intensity by 70-80% and 60-70%, respectively.
ExxonMobil plans to invest more than $15 billion over the next six years on projects associated with reducing emissions. XOM is committed to helping customers reduce emissions by investing in carbon capture and storage, hydrogen, and biofuels.
TotalEnergies aims to achieve net-zero emissions by 2050 and is taking the necessary measures to attain the same. TTE plans to expand the clean energy business to reach 35 gigawatts (GW) and 100 GW of gross production capacity from renewable sources by 2025 and 2030, respectively.
TotalEnergies is building a portfolio of low-carbon businesses, which could account for 15-20% of sales by 2040. In the near term, TTE plans to have more than 16 GW of renewable gross capacity in operation by the end of 2022.
Equinor's key strategy is to capitalize on the renewable energy space and align operations with the Paris Climate Agreement. To capitalize on the rising clean energy demand, EQNR is actively investing in renewable energy projects, comprising power generation from solar and wind energy.
Equinor expects to boost production capacities from renewables to 4-6 GW by 2026. By 2035, it plans to boost the capacity to 12-16 GW. In 2021, Equinor recorded capital gains of $1.4 billion from renewables.
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.