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Restaurant stocks were red hot from 2013 through the first quarter of 2015. Those millennials were out there spending money on experiences instead of goods and services and that led to lots of money being thrown around for dining. The market caught wind of it and rewarded restaurant stocks. But this year has been a different story as these stocks have suffered. Perhaps that’s all about to change.
Today’s Bull of the Day is one of those restaurant stocks, Brinker (NYSE:(EAT - Free Report) – Free Report). Brinker International, Inc., together with its subsidiaries, owns, develops, operates, and franchises casual dining restaurants worldwide. As of June 28, 2017, it owned, operated, or franchised 1,674 restaurants comprising 1,622 restaurants under the Chili's Grill & Bar brand name; and 52 restaurants under the Maggiano's Little Italy brand name.
Take a quick look at the Price, Consensus and EPS Surprise chart on Zacks.com and you’ll see the real reason why the stock has come down from $60. Consensus estimates had been rising and showing solid growth year over year. However, in the second half of 2015, future estimates started to come down rather dramatically. So much so that 2017 estimates are now at the same level of 2015’s numbers. That stagnation isn’t something that Wall Street rewards.
There is a glimmer of hope right now. Looking out towards next year’s EPS number, analysts are starting to inch their estimates higher. Ninety days ago, analysts were looking for $3.20 out of next year and now, that number has increased to $3.30. That represents incremental EPS growth over the current year’s $3.24 Zacks Consensus Estimate.
The stock chart is still pretty darn ugly, with the 50-day providing upside resistance since the stock broke down below it in early May. The 200-day sits nearly 30% higher than the current price. There is a lot of negativity however the recent swing low of $30.41 was off the 52-week low of $29.50 the stock hit on September 7th. If it can find a way to leapfrog the 50-day moving average it would be a huge step in the right direction. Investors looking to nibble on this stock with a P/E under 10 can buy here with stops south of the 52-week low and a price target at the 200-day, giving a nice risk versus reward setup.
Airline stocks were flying high when oil prices were down and traffic was up. What’s happened since then has been a different story. Major headwinds are beginning to pick up and its putting pressure on profits. The airline industry is in the Bottom 6% of our Zacks Industry Rank while several airline stocks are Zacks Rank #5 (Strong Sell) stocks.
One of those stocks is today’s Bear of the Day, Hawaiian Holdings (Nasdaq:(HA - Free Report) – Free Report). Hawaiian Holdings, Inc., through its subsidiary, Hawaiian Airlines, Inc., engages in the scheduled air transportation of passengers and cargo. The company offers daily services on North America routes between the State of Hawai'i and Los Angeles, Oakland, Sacramento, San Diego, San Francisco, and San Jose, California; Las Vegas, Nevada; Phoenix, Arizona; Portland, Oregon; and Seattle, Washington. It also provides daily service on Neighbor Island routes among the six islands of the State of Hawai'i; and international routes between the State of Hawai'i and Sydney, Australia, as well as Tokyo and Osaka, Japan. As of December 31, 2016, the company’s fleet consisted of 20 Boeing 717-200 aircraft for the Neighbor Island routes; 8 Boeing 767-300 aircraft; and 23 Airbus A330-200 aircraft for the North America, International, and charter routes, as well as owns 3 ATR42 aircraft.
The reason Hawaiian has the rating is does is a flurry of negative earnings estimate revisions coming in over the last week. Three analysts have dropped their estimates for the current quarter, current year and next year. The most dramatic move was seen in next year’s consensus estimate where the number has come down from $5.01 to $4.37. Compare that $4.37 to this year’s $5.49 and you can see the sharp contraction in earnings that’s leading to a bleak outlook for Hawaiian.
Additional content:
Netflix Crushes Q3 Subscriber Estimates
Q3 earnings season is officially here, and reports from our favorite consumer brands are starting to pour in. One of this week’s most highly anticipated earnings reports is that of video streaming giant Netflix (Nasdaq:(NFLX - Free Report) – Free Report), which was just released after Monday’s closing bell.
Netflix has declared this the fiscal year of margin expansion and international revenue growth, but investors have been reluctant to move past the company’s traditional measuring stick: streaming subscribers growth.
Luckily, we can use our exclusive non-financial metrics estimates file to gauge how Netflix performed in this key category. These estimates are updated daily and are based on the independent research of expert stock analysts. Learn more here >>>
To put Netflix’s Q3 results in context, investor should remember how the company performed in the most recent quarter.
At the end of Q2, the video streaming platform had about 51.92 million domestic streaming subscribers and 52.03 million international subscribers, smashing our consensus estimates of 51.49 million and 50.49 million, respectively. Netflix had nearly 104 million total streaming members, which was well ahead of our 102 million consensus estimate.
According to Netflix’s just-released earnings report, the company had 52.77 million total domestic streaming members and 56.48 million total international members at the end of third quarter. Headed into today, our non-financial consensus estimates were calling for Netflix to report total domestic streaming subscribers of 52.70 million and total international subscribers of 55.71 million.
Overall, Netflix’s actual reported total of 109.25 million streaming subscribers was well ahead of our estimate of 108.41 million streaming subscribers worldwide. The company also said that it expects to have 115.55 million total streaming subscribers by the end of the fourth quarter.
Following the release of the report, Netflix shares are about 2% in after-hours trading. Make sure to check back here for our full analysis of Netflix’s latest results!
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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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Brinker, Hawaiian Holdings and Netflix highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – October 17, 2017 – Zacks Equity Research Brinker (NYSE:(EAT - Free Report) – Free Report) as the Bull of the Day, Hawaiian Holdings (Nasdaq:(HA - Free Report) – Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Netflix (Nasdaq:(NFLX - Free Report) – Free Report).
Here is a synopsis of all three stocks:
Bull of the Day:
Restaurant stocks were red hot from 2013 through the first quarter of 2015. Those millennials were out there spending money on experiences instead of goods and services and that led to lots of money being thrown around for dining. The market caught wind of it and rewarded restaurant stocks. But this year has been a different story as these stocks have suffered. Perhaps that’s all about to change.
Today’s Bull of the Day is one of those restaurant stocks, Brinker (NYSE:(EAT - Free Report) – Free Report). Brinker International, Inc., together with its subsidiaries, owns, develops, operates, and franchises casual dining restaurants worldwide. As of June 28, 2017, it owned, operated, or franchised 1,674 restaurants comprising 1,622 restaurants under the Chili's Grill & Bar brand name; and 52 restaurants under the Maggiano's Little Italy brand name.
Take a quick look at the Price, Consensus and EPS Surprise chart on Zacks.com and you’ll see the real reason why the stock has come down from $60. Consensus estimates had been rising and showing solid growth year over year. However, in the second half of 2015, future estimates started to come down rather dramatically. So much so that 2017 estimates are now at the same level of 2015’s numbers. That stagnation isn’t something that Wall Street rewards.
There is a glimmer of hope right now. Looking out towards next year’s EPS number, analysts are starting to inch their estimates higher. Ninety days ago, analysts were looking for $3.20 out of next year and now, that number has increased to $3.30. That represents incremental EPS growth over the current year’s $3.24 Zacks Consensus Estimate.
The stock chart is still pretty darn ugly, with the 50-day providing upside resistance since the stock broke down below it in early May. The 200-day sits nearly 30% higher than the current price. There is a lot of negativity however the recent swing low of $30.41 was off the 52-week low of $29.50 the stock hit on September 7th. If it can find a way to leapfrog the 50-day moving average it would be a huge step in the right direction. Investors looking to nibble on this stock with a P/E under 10 can buy here with stops south of the 52-week low and a price target at the 200-day, giving a nice risk versus reward setup.
Bear of the Day:
Airline stocks were flying high when oil prices were down and traffic was up. What’s happened since then has been a different story. Major headwinds are beginning to pick up and its putting pressure on profits. The airline industry is in the Bottom 6% of our Zacks Industry Rank while several airline stocks are Zacks Rank #5 (Strong Sell) stocks.
One of those stocks is today’s Bear of the Day, Hawaiian Holdings (Nasdaq:(HA - Free Report) – Free Report). Hawaiian Holdings, Inc., through its subsidiary, Hawaiian Airlines, Inc., engages in the scheduled air transportation of passengers and cargo. The company offers daily services on North America routes between the State of Hawai'i and Los Angeles, Oakland, Sacramento, San Diego, San Francisco, and San Jose, California; Las Vegas, Nevada; Phoenix, Arizona; Portland, Oregon; and Seattle, Washington. It also provides daily service on Neighbor Island routes among the six islands of the State of Hawai'i; and international routes between the State of Hawai'i and Sydney, Australia, as well as Tokyo and Osaka, Japan. As of December 31, 2016, the company’s fleet consisted of 20 Boeing 717-200 aircraft for the Neighbor Island routes; 8 Boeing 767-300 aircraft; and 23 Airbus A330-200 aircraft for the North America, International, and charter routes, as well as owns 3 ATR42 aircraft.
The reason Hawaiian has the rating is does is a flurry of negative earnings estimate revisions coming in over the last week. Three analysts have dropped their estimates for the current quarter, current year and next year. The most dramatic move was seen in next year’s consensus estimate where the number has come down from $5.01 to $4.37. Compare that $4.37 to this year’s $5.49 and you can see the sharp contraction in earnings that’s leading to a bleak outlook for Hawaiian.
Additional content:
Netflix Crushes Q3 Subscriber Estimates
Q3 earnings season is officially here, and reports from our favorite consumer brands are starting to pour in. One of this week’s most highly anticipated earnings reports is that of video streaming giant Netflix (Nasdaq:(NFLX - Free Report) – Free Report), which was just released after Monday’s closing bell.
Netflix has declared this the fiscal year of margin expansion and international revenue growth, but investors have been reluctant to move past the company’s traditional measuring stick: streaming subscribers growth.
Luckily, we can use our exclusive non-financial metrics estimates file to gauge how Netflix performed in this key category. These estimates are updated daily and are based on the independent research of expert stock analysts. Learn more here >>>
To put Netflix’s Q3 results in context, investor should remember how the company performed in the most recent quarter.
At the end of Q2, the video streaming platform had about 51.92 million domestic streaming subscribers and 52.03 million international subscribers, smashing our consensus estimates of 51.49 million and 50.49 million, respectively. Netflix had nearly 104 million total streaming members, which was well ahead of our 102 million consensus estimate.
According to Netflix’s just-released earnings report, the company had 52.77 million total domestic streaming members and 56.48 million total international members at the end of third quarter. Headed into today, our non-financial consensus estimates were calling for Netflix to report total domestic streaming subscribers of 52.70 million and total international subscribers of 55.71 million.
Overall, Netflix’s actual reported total of 109.25 million streaming subscribers was well ahead of our estimate of 108.41 million streaming subscribers worldwide. The company also said that it expects to have 115.55 million total streaming subscribers by the end of the fourth quarter.
Following the release of the report, Netflix shares are about 2% in after-hours trading. Make sure to check back here for our full analysis of Netflix’s latest results!
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Get today’s Zacks #1 Stock of the Day with your free subscription to Profit from the Pros newsletter:
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential 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/performance for information about the performance numbers displayed in this press release.