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International Game Technology and Jack In The Box have been highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – January 13, 2023 – Zacks Equity Research shares International Game Technology (IGT - Free Report) as the Bull of the Day and Jack In The Box (JACK - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on The Walt Disney (DIS - Free Report) , Netflix (NFLX - Free Report) and Paramount Global (PARA - Free Report) .
International Game Technology is a Zacks Rank #1 (Strong Buy) that operates and provides gaming technology products and services. The company is engaged in design, development, manufacture and marketing of casino-style gaming equipment, systems technology, and game content.
Like many stocks in 2022, IGT struggled for most of the year. However, the bulls came back into the name in the fourth quarter. The stock rallied about 50% off its September lows and closed down 20% on the year.
So far in 2023, the buyers have showed their presence, taking the stock higher by 7% to start the year.
Reason for the bullishness over the last few months was a strong earnings report back in November. If the company can continue its earnings trend, there is reason to believe the stock can continue higher and be a big winner in 2023.
More about IGT
The company was founded in 2014 and is headquartered in London, England. It employs over 10,000 people and has a market cap of $5 billion.
IGT operates in three segments: Global Lottery, Global Gaming, and Digital & Betting.
The stock has a Zacks Style Score of “B” in Value, but “D” in Momentum. The Forward PE is 16 and the stock pays a 3.3% dividend.
Q3 Earnings
In November of last year, the company reported a massive 441% earnings beat. This was the third straight EPS beat and the largest upside surprise since May of 2021.
Q3 came in at $0.43 v the $0.25 expected. Revenue also beat, coming in at $1.06B v the $1.01B expected. Q4 revenues were guided at $1.0B v the 1.01B expected and IGT affirmed FY22 revenues at $4.1-4.2B v the $4.09B expected.
Operating margins for Q4 are expected to come in at 18-19% for Q4 and 20-22% for FY22.
Management expects net debt leverage to improve 3.1x, which is the lowest in company history. Moreover, they say that customer and player demand trends remain encouraging.
After the earnings release, investors cheered the stock higher. IGT jumped 20% higher, going from just over $20 to $24.50
Estimates Rising
Estimates have been trending higher since that earnings report. Over the last 90 days, analyst have taken their numbers higher for all time frames.
For the current quarter, we see estimates jumping 23%, from $0.21 to $0.26. For the current year, estimates have been taken 134% higher, from $0.82 to $1.92.
Looking to the long-term, the trend continues. For next year, estimates have gone from $1.27 to $1.49, or 17%.
The stock saw a price upgrade right after the report as Susquehanna took its targets from $22 to $25. More recently, Société Générale reiterated its Hold rating, but took its price target higher from $22.60 to $24.90.
The Technical Take
The stock has been all over the place over the last two years, but is currently trading in the middle of its trading range during that period. The question for investors is if this stock will see sideways trading or if the price will get back to the 2021 highs near $33.
The good news is that the recent earnings strength has taken the stock over all its major moving averages. For those looking for dips to MA support levels, the 200-day is at $20.75 and the 50-day is at $23.40.
It might take a while for the stock to break out of its base after gapping higher. In the meantime, investors should feel good being long the stock if it stays above $20.
In Summary
International Game Technology has started the year off right. Investors are clearly excited for what this stock might bring in 2023. While IGT might experience some sideways trading, the company pays a nice dividend while the story plays out.
If earnings momentum can continue over the next couple quarters, look for the stock to take out 2022 highs and be one of the top performing names in 2023.
Jack In The Box is a Zacks Rank #5 (Strong Sell) that operates and franchises Jack in the Box quick-service restaurants. With over 2,200 restaurants, the company is one of the largest hamburger chains in the country.
After disappointing earnings, the stock traded below October lows towards the $65 level. More recently, JACK has rallied with the overall market, up 17% from December lows.
Investors might be getting ahead of themselves as the upcoming quarter is likely threatened by inflationary impacts on margins.
About the Company
JACK is headquartered in San Diego, CA. The company was founded in 1951 and employs 22,000 people.
JACK is valued at $1.6 billion and has a Forward PE of 14. The stock holds Zacks Style Scores of “B” in Value and “A” in Momentum. The company pays a dividend of 2.3%.
Q4 Earnings
The company reported EPS on November 22nd, missing expectations by 1.4%. JACK reported Q4 at $1.33 v the $1.35 and revenues came in slightly better than expected. Jack In the Box saw year over year Same Store Sales growth of 4%, while Del Taco saw growth of 5.2%.
The company guided FY23 operating EPS of $5.25-5.62. The guidance was disappointing to investors and the stock was sold aggressively after the earnings report.
Estimates
Because of the light guidance, analysts are lowering estimates and dropping price targets.
Over the last 60 days, analyst estimates have been lowered across all time frames. For the current quarter, estimates have dropped from $2.02 to $1.72, or 14%. For the current year, they have fallen 17%, down to $5.48 from $6.60.
After earnings a handful of analysts took their price targets lower. UBS went from $85 to $77, Wedbush to $100 from $115 and Barclays went to $73 from $88.
Technical Take
After the rally in the stock over the last few weeks, JACK is finding resistance at the 200-day moving average. If the bulls fail to hold this area, the stock will likely drop back to the December trading range.
Earnings are due up in late February and investors should be cautious of more trouble with margins. We likely get sideway trading until then and after earnings the chart will tell us which direction the stock may go.
For now, over $80 looks bullish, but under $70 the bears are back in control.
Summary
Like many restaurants, the higher costs of food and labor is starting to eat into margins. For now, the fundamental story makes the stock an avoid. While the chart looks much better, the stock is at resistance, so investors should take caution at current levels.
Additional content:
Disney Wins Big at Golden Globes, Outperforms Netflix
The Walt Disney won nine awards at this year’s Golden Globe, including the category of Best Picture, Musical or Comedy with The Banshees of Inisherin. The movie had to compete against the likes of Glass Onion: A Knives Out Mystery from Netflix and Babylon from Paramount Pictures, a subsidiary of Paramount Global.
Colin Farrell won the Best Performance by an Actor in a Motion Picture (Musical/Comedy) for The Banshees of Inisherin, with Martin McDonagh winning the Best Screenplay award.
Abbott Elementaryfrom Disney’s ABC/20th Television won the Best Television Series (Musical/Comedy) award.
Quinta Brunson won the Best Performance by an Actress in a Television Series (Musical/Comedy), while Tyler James Williams was selected for the Best Performance by an Actor in a Supporting Role in a Musical-Comedy or Drama Television Series.
Other notable winners were Jeremy Allen White — Best Performance by an Actor in a Television Series (Musical/Comedy), Angela Bassett — Best Performance by an Actress in a Supporting Role in Any Motion Picture, and Amanda Seyfried — Best Performance by an Actress in a Limited Series, Anthology Series, or Motion Picture Made for Television.
However, Disney’s Avatar: The Way of Water failed to win in the Best Picture, Drama category, in which Universal Pictures emerged victorious with The Fabelmans. Steven Spielberg won the Best Director, Motion Picture award for the movie.
Netflix had a relatively quiet Golden Globe this year, winning three awards. Guillermo del Toro became the first Latino to win the best animated feature Golden Globe for Pinocchio. The other two wins include Julia Garner for Ozark (Best Supporting Actress, Television) and Evan Peters for Monster: The Jeffrey Dahmer Story (Best Performance by an Actor, Limited Series, Anthology Series or Motion Picture made for Television).
Disney, along with media companies like Comcast and Paramount, is suffering from the lingering effects of COVID-19 and intensifying competition in the saturated streaming space still dominated by Netflix.
The latest Golden Globe wins reflect Disney’s strong content portfolio. Although Avatar: The Way of Water didn’t win any awards, it was one of the highest-grossing movies released in 2022. As these latest movies will be eventually released into Disney’s streaming service, Disney+, subscriber base growth is expected to remain strong. Disney+ added more than 12 million global subscribers in the fourth quarter of fiscal 2022.
However, Disney’s direct-to-consumer division reported an operating loss of $1.5 billion in fourth-quarter fiscal 2022, which doubled year over year. This has been attributed to macroeconomic factors like inflation, which have spiked up the cost of production for the company, as well as adverse foreign exchange impact that decreased Disney+’s ARPU by 5%.
Nevertheless, Disney is focusing on the realignment of costs, including rationalization of marketing spending, and optimization of content slate and distribution approach to deliver a steady state of high-impact releases that efficiently drive engagement. This Zacks Rank #4 (Sell) company expects Disney+ to reach profitability by 2024.
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/performance for information about the performance numbers displayed in this press release.
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International Game Technology and Jack In The Box have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – January 13, 2023 – Zacks Equity Research shares International Game Technology (IGT - Free Report) as the Bull of the Day and Jack In The Box (JACK - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on The Walt Disney (DIS - Free Report) , Netflix (NFLX - Free Report) and Paramount Global (PARA - Free Report) .
Here is a synopsis of all five stocks.
Bull of the Day:
International Game Technology is a Zacks Rank #1 (Strong Buy) that operates and provides gaming technology products and services. The company is engaged in design, development, manufacture and marketing of casino-style gaming equipment, systems technology, and game content.
Like many stocks in 2022, IGT struggled for most of the year. However, the bulls came back into the name in the fourth quarter. The stock rallied about 50% off its September lows and closed down 20% on the year.
So far in 2023, the buyers have showed their presence, taking the stock higher by 7% to start the year.
Reason for the bullishness over the last few months was a strong earnings report back in November. If the company can continue its earnings trend, there is reason to believe the stock can continue higher and be a big winner in 2023.
More about IGT
The company was founded in 2014 and is headquartered in London, England. It employs over 10,000 people and has a market cap of $5 billion.
IGT operates in three segments: Global Lottery, Global Gaming, and Digital & Betting.
The stock has a Zacks Style Score of “B” in Value, but “D” in Momentum. The Forward PE is 16 and the stock pays a 3.3% dividend.
Q3 Earnings
In November of last year, the company reported a massive 441% earnings beat. This was the third straight EPS beat and the largest upside surprise since May of 2021.
Q3 came in at $0.43 v the $0.25 expected. Revenue also beat, coming in at $1.06B v the $1.01B expected. Q4 revenues were guided at $1.0B v the 1.01B expected and IGT affirmed FY22 revenues at $4.1-4.2B v the $4.09B expected.
Operating margins for Q4 are expected to come in at 18-19% for Q4 and 20-22% for FY22.
Management expects net debt leverage to improve 3.1x, which is the lowest in company history. Moreover, they say that customer and player demand trends remain encouraging.
After the earnings release, investors cheered the stock higher. IGT jumped 20% higher, going from just over $20 to $24.50
Estimates Rising
Estimates have been trending higher since that earnings report. Over the last 90 days, analyst have taken their numbers higher for all time frames.
For the current quarter, we see estimates jumping 23%, from $0.21 to $0.26. For the current year, estimates have been taken 134% higher, from $0.82 to $1.92.
Looking to the long-term, the trend continues. For next year, estimates have gone from $1.27 to $1.49, or 17%.
The stock saw a price upgrade right after the report as Susquehanna took its targets from $22 to $25. More recently, Société Générale reiterated its Hold rating, but took its price target higher from $22.60 to $24.90.
The Technical Take
The stock has been all over the place over the last two years, but is currently trading in the middle of its trading range during that period. The question for investors is if this stock will see sideways trading or if the price will get back to the 2021 highs near $33.
The good news is that the recent earnings strength has taken the stock over all its major moving averages. For those looking for dips to MA support levels, the 200-day is at $20.75 and the 50-day is at $23.40.
It might take a while for the stock to break out of its base after gapping higher. In the meantime, investors should feel good being long the stock if it stays above $20.
In Summary
International Game Technology has started the year off right. Investors are clearly excited for what this stock might bring in 2023. While IGT might experience some sideways trading, the company pays a nice dividend while the story plays out.
If earnings momentum can continue over the next couple quarters, look for the stock to take out 2022 highs and be one of the top performing names in 2023.
Bear of the Day:
Jack In The Box is a Zacks Rank #5 (Strong Sell) that operates and franchises Jack in the Box quick-service restaurants. With over 2,200 restaurants, the company is one of the largest hamburger chains in the country.
After disappointing earnings, the stock traded below October lows towards the $65 level. More recently, JACK has rallied with the overall market, up 17% from December lows.
Investors might be getting ahead of themselves as the upcoming quarter is likely threatened by inflationary impacts on margins.
About the Company
JACK is headquartered in San Diego, CA. The company was founded in 1951 and employs 22,000 people.
JACK is valued at $1.6 billion and has a Forward PE of 14. The stock holds Zacks Style Scores of “B” in Value and “A” in Momentum. The company pays a dividend of 2.3%.
Q4 Earnings
The company reported EPS on November 22nd, missing expectations by 1.4%. JACK reported Q4 at $1.33 v the $1.35 and revenues came in slightly better than expected. Jack In the Box saw year over year Same Store Sales growth of 4%, while Del Taco saw growth of 5.2%.
The company guided FY23 operating EPS of $5.25-5.62. The guidance was disappointing to investors and the stock was sold aggressively after the earnings report.
Estimates
Because of the light guidance, analysts are lowering estimates and dropping price targets.
Over the last 60 days, analyst estimates have been lowered across all time frames. For the current quarter, estimates have dropped from $2.02 to $1.72, or 14%. For the current year, they have fallen 17%, down to $5.48 from $6.60.
After earnings a handful of analysts took their price targets lower. UBS went from $85 to $77, Wedbush to $100 from $115 and Barclays went to $73 from $88.
Technical Take
After the rally in the stock over the last few weeks, JACK is finding resistance at the 200-day moving average. If the bulls fail to hold this area, the stock will likely drop back to the December trading range.
Earnings are due up in late February and investors should be cautious of more trouble with margins. We likely get sideway trading until then and after earnings the chart will tell us which direction the stock may go.
For now, over $80 looks bullish, but under $70 the bears are back in control.
Summary
Like many restaurants, the higher costs of food and labor is starting to eat into margins. For now, the fundamental story makes the stock an avoid. While the chart looks much better, the stock is at resistance, so investors should take caution at current levels.
Additional content:
Disney Wins Big at Golden Globes, Outperforms Netflix
The Walt Disney won nine awards at this year’s Golden Globe, including the category of Best Picture, Musical or Comedy with The Banshees of Inisherin. The movie had to compete against the likes of Glass Onion: A Knives Out Mystery from Netflix and Babylon from Paramount Pictures, a subsidiary of Paramount Global.
Colin Farrell won the Best Performance by an Actor in a Motion Picture (Musical/Comedy) for The Banshees of Inisherin, with Martin McDonagh winning the Best Screenplay award.
Abbott Elementaryfrom Disney’s ABC/20th Television won the Best Television Series (Musical/Comedy) award.
Quinta Brunson won the Best Performance by an Actress in a Television Series (Musical/Comedy), while Tyler James Williams was selected for the Best Performance by an Actor in a Supporting Role in a Musical-Comedy or Drama Television Series.
Other notable winners were Jeremy Allen White — Best Performance by an Actor in a Television Series (Musical/Comedy), Angela Bassett — Best Performance by an Actress in a Supporting Role in Any Motion Picture, and Amanda Seyfried — Best Performance by an Actress in a Limited Series, Anthology Series, or Motion Picture Made for Television.
The Walt Disney Company price-consensus-chart | The Walt Disney Company Quote
However, Disney’s Avatar: The Way of Water failed to win in the Best Picture, Drama category, in which Universal Pictures emerged victorious with The Fabelmans. Steven Spielberg won the Best Director, Motion Picture award for the movie.
Netflix had a relatively quiet Golden Globe this year, winning three awards. Guillermo del Toro became the first Latino to win the best animated feature Golden Globe for Pinocchio. The other two wins include Julia Garner for Ozark (Best Supporting Actress, Television) and Evan Peters for Monster: The Jeffrey Dahmer Story (Best Performance by an Actor, Limited Series, Anthology Series or Motion Picture made for Television).
Disney’s Strong Content Portfolio Boosts Prospects
Disney, along with media companies like Comcast and Paramount, is suffering from the lingering effects of COVID-19 and intensifying competition in the saturated streaming space still dominated by Netflix.
The latest Golden Globe wins reflect Disney’s strong content portfolio. Although Avatar: The Way of Water didn’t win any awards, it was one of the highest-grossing movies released in 2022. As these latest movies will be eventually released into Disney’s streaming service, Disney+, subscriber base growth is expected to remain strong. Disney+ added more than 12 million global subscribers in the fourth quarter of fiscal 2022.
However, Disney’s direct-to-consumer division reported an operating loss of $1.5 billion in fourth-quarter fiscal 2022, which doubled year over year. This has been attributed to macroeconomic factors like inflation, which have spiked up the cost of production for the company, as well as adverse foreign exchange impact that decreased Disney+’s ARPU by 5%.
Nevertheless, Disney is focusing on the realignment of costs, including rationalization of marketing spending, and optimization of content slate and distribution approach to deliver a steady state of high-impact releases that efficiently drive engagement. This Zacks Rank #4 (Sell) company expects Disney+ to reach profitability by 2024.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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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/performance for information about the performance numbers displayed in this press release.