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The Zacks Analyst Blog Highlights The Williams Companies, Interactive Brokers, Incyte, Hubbell and Lamb Weston Holdings
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For Immediate Release
Chicago, IL – October 26, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: The Williams Companies Inc. (WMB - Free Report) , Interactive Brokers Group Inc. (IBKR - Free Report) , Incyte Corp. (INCY - Free Report) , Hubbell Inc. (HUBB - Free Report) and Lamb Weston Holdings Inc. (LW - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
A Bear Market Rally or Markets Forming a Solid Base? 5 Picks
Wall Street is witnessing a good rally in October after a horrible September. Historically, several major stock market crashes happened this month. However, this year, it looks like October will see a happy ending.
Month to date, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq composite — have advanced 9.7%, 5.9% and 3.6%. On the other hand, the Dow, the S&P 500 and the Nasdaq Composite – have plummeted 13.3%, 20.3% and 30%, respectively, on a year-to-date basis.
Both the S&P 500 and the Nasdaq Composite are in bear market territory. That is why, financial experts have characterized the ongoing October rally as a bear market rally or a relief rally, similar to the one we saw from mid-June to mid-August.
Although market participants are yet to be convinced about bottoming out, October's rally has some positives. Let's discuss briefly.
Are Markets Trying to Form a Base?
U.S. stock markets have seen extreme intraday fluctuations in the past one month. The Dow has recorded around 600-700 points of intraday swing and the Nasdaq Composite has seen 300-400 points of intraday swing. The S&P 500 has registered 50-60 points of intraday swing in the past month. If we consider, pre-market movements of index futures, intraday fluctuations of these three indexes will be much wider.
This clearly shows that investors are unleashing both "Sale on the Rise" and "Buy on the Dip" strategies to strengthen their portfolios. Since the market is uncertain about the future movement of the interest rate and Fed's tightening, investors are taking a short-term view and selling stocks to book quick profits. At the same time, markets are no longer showing a secular downtrend. This means that some sort of sentiments is growing among investors regarding bottoming out.
When such a situation arises, the market seems to form a base on which it can ride for the long term growth trajectory. In U.S. stock markets, this type of scenario has been visible in the past month. From here the market can witness a steep rise if a minimum positive clue comes from the Fed.
Other Positives
Last week, The Wall Street Journal reported that some Fed officials are skeptical about the continuation of the central bank's aggressive rate hike and tighter monetary control. The officials have already started to express their desire to slow down the pace of rate hikes soon and to stop raising rates altogether early next year. They want to reduce the risk of a hard landing of the economy caused by the policy interventions of the Fed.
The Fed has already hiked the benchmark lending rate by 3% in 2022. The cumulative effect of a higher interest rate regime takes time to be visible in the economy. A section of market participants led by Ark Investment Management believes that the central bank should not take decisions about the future course of interest rate movement based on lag indicators like nonfarm payrolls and inflation rates.
Instead, the Fed should take a decision on lead indicators like declining commodity prices (except food and energy), growing accumulation of inventories on the part of manufacturers and retailers, gradual slowdown of the ISM manufacturing PMI and a decline in the job openings rate. All these lead indicators point to the cooling down of the U.S. economy.
Stock Selection Process
An upward EPS estimate revision for any stock for the rest of 2022 simply means that the market is expecting the company to do good business this year. A positive estimate revision within the last 30 days means that the market is thinking positively about the company.
Therefore, a positive EPS estimate revision under growing threats of inflation highlights the solid business model and robust growth potential of a company. Investors can certainly take a look at these stocks that currently have strong earnings momentum.
We have narrowed our search to five such large-cap U.S. companies with strong potential for the rest of 2022. These stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Williams Companies Inc. operates as an energy infrastructure company primarily in the United States. With U.S. natural gas demand projected to grow significantly in the long term, WMB seems well positioned to capitalize on the same owing to its impressive portfolio of large-scale value-creating projects.
In particular, the company's existing and expansionary development projects associated with the massive Transco gas transmission system are expected to boost Williams' growth prospects. WMB's thriving deepwater transportation business is another positive.
The Williams Companies has an expected earnings growth rate of 15.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 6.1% over the last seven days.
Interactive Brokers Group Inc. operates as an automated electronic broker worldwide. IBKR specializes in executing and clearing trades in securities, futures, foreign exchange instruments, bonds, and mutual funds.
Interactive Brokers Group's efforts to develop proprietary software (including IBKR Lite), its low level of compensation expenses relative to net revenues and an increase in emerging market customers will likely continue aiding its financials. The acquisition of the retail unit of Folio Investments will strengthen IBKR's position in the online brokerage space.
Interactive Brokers Group has an expected earnings growth rate of 16.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.8% over the last seven days.
Incyte Corp. focuses on the discovery, development and commercialization of various therapeutics in the United States. lINCY's lead drug, Jakafi, higher royalty revenues and encouraging uptake of other recently approved drugs maintain momentum for the company.
Jakafi's label expansion in additional indications is anticipated to further drive sales, and the company has raised the bottom end of full-year Jakafi net product revenue guidance.
The recent FDA approval of ruxolitinib cream under the brand name Opzelura has diversified the portfolio of Incyte. The uptake of Pemazyre and other newly approved drugs like Monjuvi and Tabrecta is positive and should boost sales. The label expansion of these drugs is also positive and will generate incremental sales.
Incyte has an expected earnings growth rate of 13.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the last seven days.
Hubbell Inc. is engaged in the design, manufacture and sale of electrical and electronic products to commercial, industrial, utility and telecommunications markets. HUBB's products include plugs, receptacles, connectors, lighting fixtures, high voltage test and measurement equipment and voice and data signal processing components. Hubbell operates through two segments — Electrical Solution and Utility Solution.
HUBB has an expected earnings growth rate of 23.4% for the current year. The Zacks Consensus Estimate for current-year earnings improved 1% over the last seven days.
Lamb Weston Holdings Inc. produces, distributes, and markets value-added frozen potato products worldwide. LW's top line has been benefiting from robust price/mix, as witnessed during the first quarter of fiscal 2023. The price/mix increased 19%, reflecting gains from pricing actions in the core business segments to counter input, manufacturing and transportation cost inflation.
Lamb Weston's top and bottom lines increased year over year in the quarter. LW saw net sales growth across all three reporting segments. While the macro environment remains volatile, management is on track to deliver results at the high end of the sales and earnings target in fiscal 2023. In addition, Lamb Weston has been keen on boosting production capacity to fuel long-term growth.
Lamb Weston has an expected earnings growth rate of 45.7% for the current year (ending May 2023). The Zacks Consensus Estimate for current-year earnings has improved 8.6% over the last 30 days.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights The Williams Companies, Interactive Brokers, Incyte, Hubbell and Lamb Weston Holdings
For Immediate Release
Chicago, IL – October 26, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: The Williams Companies Inc. (WMB - Free Report) , Interactive Brokers Group Inc. (IBKR - Free Report) , Incyte Corp. (INCY - Free Report) , Hubbell Inc. (HUBB - Free Report) and Lamb Weston Holdings Inc. (LW - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
A Bear Market Rally or Markets Forming a Solid Base? 5 Picks
Wall Street is witnessing a good rally in October after a horrible September. Historically, several major stock market crashes happened this month. However, this year, it looks like October will see a happy ending.
Month to date, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq composite — have advanced 9.7%, 5.9% and 3.6%. On the other hand, the Dow, the S&P 500 and the Nasdaq Composite – have plummeted 13.3%, 20.3% and 30%, respectively, on a year-to-date basis.
Both the S&P 500 and the Nasdaq Composite are in bear market territory. That is why, financial experts have characterized the ongoing October rally as a bear market rally or a relief rally, similar to the one we saw from mid-June to mid-August.
Although market participants are yet to be convinced about bottoming out, October's rally has some positives. Let's discuss briefly.
Are Markets Trying to Form a Base?
U.S. stock markets have seen extreme intraday fluctuations in the past one month. The Dow has recorded around 600-700 points of intraday swing and the Nasdaq Composite has seen 300-400 points of intraday swing. The S&P 500 has registered 50-60 points of intraday swing in the past month. If we consider, pre-market movements of index futures, intraday fluctuations of these three indexes will be much wider.
This clearly shows that investors are unleashing both "Sale on the Rise" and "Buy on the Dip" strategies to strengthen their portfolios. Since the market is uncertain about the future movement of the interest rate and Fed's tightening, investors are taking a short-term view and selling stocks to book quick profits. At the same time, markets are no longer showing a secular downtrend. This means that some sort of sentiments is growing among investors regarding bottoming out.
When such a situation arises, the market seems to form a base on which it can ride for the long term growth trajectory. In U.S. stock markets, this type of scenario has been visible in the past month. From here the market can witness a steep rise if a minimum positive clue comes from the Fed.
Other Positives
Last week, The Wall Street Journal reported that some Fed officials are skeptical about the continuation of the central bank's aggressive rate hike and tighter monetary control. The officials have already started to express their desire to slow down the pace of rate hikes soon and to stop raising rates altogether early next year. They want to reduce the risk of a hard landing of the economy caused by the policy interventions of the Fed.
The Fed has already hiked the benchmark lending rate by 3% in 2022. The cumulative effect of a higher interest rate regime takes time to be visible in the economy. A section of market participants led by Ark Investment Management believes that the central bank should not take decisions about the future course of interest rate movement based on lag indicators like nonfarm payrolls and inflation rates.
Instead, the Fed should take a decision on lead indicators like declining commodity prices (except food and energy), growing accumulation of inventories on the part of manufacturers and retailers, gradual slowdown of the ISM manufacturing PMI and a decline in the job openings rate. All these lead indicators point to the cooling down of the U.S. economy.
Stock Selection Process
An upward EPS estimate revision for any stock for the rest of 2022 simply means that the market is expecting the company to do good business this year. A positive estimate revision within the last 30 days means that the market is thinking positively about the company.
Therefore, a positive EPS estimate revision under growing threats of inflation highlights the solid business model and robust growth potential of a company. Investors can certainly take a look at these stocks that currently have strong earnings momentum.
We have narrowed our search to five such large-cap U.S. companies with strong potential for the rest of 2022. These stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Williams Companies Inc. operates as an energy infrastructure company primarily in the United States. With U.S. natural gas demand projected to grow significantly in the long term, WMB seems well positioned to capitalize on the same owing to its impressive portfolio of large-scale value-creating projects.
In particular, the company's existing and expansionary development projects associated with the massive Transco gas transmission system are expected to boost Williams' growth prospects. WMB's thriving deepwater transportation business is another positive.
The Williams Companies has an expected earnings growth rate of 15.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 6.1% over the last seven days.
Interactive Brokers Group Inc. operates as an automated electronic broker worldwide. IBKR specializes in executing and clearing trades in securities, futures, foreign exchange instruments, bonds, and mutual funds.
Interactive Brokers Group's efforts to develop proprietary software (including IBKR Lite), its low level of compensation expenses relative to net revenues and an increase in emerging market customers will likely continue aiding its financials. The acquisition of the retail unit of Folio Investments will strengthen IBKR's position in the online brokerage space.
Interactive Brokers Group has an expected earnings growth rate of 16.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.8% over the last seven days.
Incyte Corp. focuses on the discovery, development and commercialization of various therapeutics in the United States. lINCY's lead drug, Jakafi, higher royalty revenues and encouraging uptake of other recently approved drugs maintain momentum for the company.
Jakafi's label expansion in additional indications is anticipated to further drive sales, and the company has raised the bottom end of full-year Jakafi net product revenue guidance.
The recent FDA approval of ruxolitinib cream under the brand name Opzelura has diversified the portfolio of Incyte. The uptake of Pemazyre and other newly approved drugs like Monjuvi and Tabrecta is positive and should boost sales. The label expansion of these drugs is also positive and will generate incremental sales.
Incyte has an expected earnings growth rate of 13.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the last seven days.
Hubbell Inc. is engaged in the design, manufacture and sale of electrical and electronic products to commercial, industrial, utility and telecommunications markets. HUBB's products include plugs, receptacles, connectors, lighting fixtures, high voltage test and measurement equipment and voice and data signal processing components. Hubbell operates through two segments — Electrical Solution and Utility Solution.
HUBB has an expected earnings growth rate of 23.4% for the current year. The Zacks Consensus Estimate for current-year earnings improved 1% over the last seven days.
Lamb Weston Holdings Inc. produces, distributes, and markets value-added frozen potato products worldwide. LW's top line has been benefiting from robust price/mix, as witnessed during the first quarter of fiscal 2023. The price/mix increased 19%, reflecting gains from pricing actions in the core business segments to counter input, manufacturing and transportation cost inflation.
Lamb Weston's top and bottom lines increased year over year in the quarter. LW saw net sales growth across all three reporting segments. While the macro environment remains volatile, management is on track to deliver results at the high end of the sales and earnings target in fiscal 2023. In addition, Lamb Weston has been keen on boosting production capacity to fuel long-term growth.
Lamb Weston has an expected earnings growth rate of 45.7% for the current year (ending May 2023). The Zacks Consensus Estimate for current-year earnings has improved 8.6% over the last 30 days.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Zacks Investment Research
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.