We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Winnebago Industries and Steelcase as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – December 27, 2017 – Zacks Equity Research highlights Winnebago Industries, Inc. (WGO - Free Report) as the Bull of the Day and Steelcase Inc. (SCS - Free Report) as the Bear of the Day.
Winnebago Industries, Inc.is cashing in on the strong employment and stock markets as its towable products remain in strong demand. This Zacks Rank #1 (Strong Buy) stock is expected to see double digit revenue growth in fiscal 2018.
Winnebago makes recreation vehicles under the Winnebago and Grand Design brands. These include motorhomes, travel trailers, or towables, and fifth wheel products. It has facilities in Iowa, Indiana, Oregon and Minnesota.
Another Beat in Fiscal First Quarter 2018
On Dec 20, Winnebago reported fiscal first quarter 2018 results and beat the Zacks Consensus by 7 cents. Earnings were $0.57 versus the consensus of $0.50.
This continued an earnings winning streak going back to 2015.
Revenue jumped 83.5% to $450 million from $245.3 million in the year ago quarter but that quarter only included 3 weeks of Grand Design RV performance. Grand Design was acquired in fiscal 2017.
Gross profit margin rose 220 basis points thanks to the strong growth in the Towable segment, which was mostly the result of the Grand Design acquisition.
Thanks to Grand Design, towables were 58% of total sales in fiscal year 2017 compared to just 9% in 2016. Towables have higher margins and are hotter right now. This is being reflected in Winnebago's results.
Motorized sales fell 2.4% year-over-year to $190.4 million as the Class C sales remained soft. But Towables were up 50% to $259.7 million from $209.5 million in the prior year. It was boosted by $195.4 million in Grand Design sales as well as strong organic growth in Winnebago's own branded towable products.
The towable backlog remains strong and retail sales continue to outpace the industry for both brands.
Estimates Move Sharply Higher
The analysts were pleased with the quarter even with the decline in motorized sales.
With the stock market at record highs and unemployment at 20-year lows, that makes for a powerful combination for companies that make discretionary consumer products.
While earnings in fiscal 2018 are expected to decline 8.7% from the year ago period, the Zacks Consensus Estimate has jumped to $3.06 from $2.88 since the earnings report.
Fiscal 2019 is looking even better with earnings expected to rise 19.7% to $3.66. Some analysts are now beginning to price in the corporate tax cuts into their estimates.
Winnebago has paid a 34% effective tax rate so analysts are pricing in a much lower rate into fiscal 2019 estimates.
Shares at Multi-Year Highs
Winnebago has been soaring over the last year as sales heated up.
Revenue is expected to rise 15.1% this year and another 6.1% next year.
Shares are still attractively priced with a forward P/E of 19.1.
It also pays a small dividend, currently yielding 0.7%.
For investors looking for a way to play the hot economy, Winnebago is one to keep on the short list in 2018.
Steelcase Inc.recently posted a disappointing fiscal third quarter with Q4 guidance below the consensus. This Zacks Rank #5 (Strong Sell) sees things turning around by fiscal 2019 however.
Steelcase is one of the largest office environment makers in the world. Founded in 1912 and headquartered in Grand Rapids Michigan, it has global operations.
Met the Estimate in the Third Quarter
On Dec 19, Steelcase reported its fiscal third quarter 2018 results and met the Zacks Consensus of $0.21.
Revenue fell 2% to $772.1 million from $786.5 million in the year ago period.
The Americas saw a 4% decline due to reduced demand for day-to-day business from both large and smaller customers, including lower revenue from legacy products and applications. The orders for day-to-day were down sharply in the beginning of the quarter but were flat for November.
On the other hand EMEA saw revenue growth of 4% but an organic revenue decline of 1%.
The company said it was getting increasingly confident about next year due to its recent improvements in their project win rates. In addition, customer and dealer reaction to its new products have been positive.
Guided Under Consensus for Q4
Steelcase gave fourth quarter guidance of between $0.14 and $0.18. This was well under the Zacks Consensus of $0.24.
"There are three potential items which are not reflected in our earnings estimate for the fourth quarter that we estimate could significantly impact our results," said Dave Sylvester, the CFO.
"Two of these items are related to potential reductions in the U.S. and French statutory tax rates, which those governments are currently considering and if enacted in the fourth quarter could require us to record non-cash charges to reduce the value of our deferred tax assets. In addition, a potential transaction related to an unconsolidated affiliate could result in a pre-tax gain in the fourth quarter."
"We have not included these items in our earnings estimate as there are a number of factors relating to these items which are outside of our control," he said.
It's not surprising, then, that the analysts lowered fourth quarter as well as full year fiscal 2018 estimates.
2 analysts cut full year 2018 to $0.82 from $0.90 over the last week.
That's an earnings decline from fiscal 2017 of 22.4%.
They also got bearish about 2019 despite the company's more upbeat outlook on that year. The 2019 Zacks Consensus Estimate fell to $0.97 from $1.06 since the earnings report.
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 more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% 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 http://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Winnebago Industries and Steelcase as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – December 27, 2017 – Zacks Equity Research highlights Winnebago Industries, Inc. (WGO - Free Report) as the Bull of the Day and Steelcase Inc. (SCS - Free Report) as the Bear of the Day.
Here is a synopsis of both stocks:
Bull of the Day:
Winnebago Industries, Inc.is cashing in on the strong employment and stock markets as its towable products remain in strong demand. This Zacks Rank #1 (Strong Buy) stock is expected to see double digit revenue growth in fiscal 2018.
Winnebago makes recreation vehicles under the Winnebago and Grand Design brands. These include motorhomes, travel trailers, or towables, and fifth wheel products. It has facilities in Iowa, Indiana, Oregon and Minnesota.
Another Beat in Fiscal First Quarter 2018
On Dec 20, Winnebago reported fiscal first quarter 2018 results and beat the Zacks Consensus by 7 cents. Earnings were $0.57 versus the consensus of $0.50.
This continued an earnings winning streak going back to 2015.
Revenue jumped 83.5% to $450 million from $245.3 million in the year ago quarter but that quarter only included 3 weeks of Grand Design RV performance. Grand Design was acquired in fiscal 2017.
Gross profit margin rose 220 basis points thanks to the strong growth in the Towable segment, which was mostly the result of the Grand Design acquisition.
Thanks to Grand Design, towables were 58% of total sales in fiscal year 2017 compared to just 9% in 2016. Towables have higher margins and are hotter right now. This is being reflected in Winnebago's results.
Motorized sales fell 2.4% year-over-year to $190.4 million as the Class C sales remained soft. But Towables were up 50% to $259.7 million from $209.5 million in the prior year. It was boosted by $195.4 million in Grand Design sales as well as strong organic growth in Winnebago's own branded towable products.
The towable backlog remains strong and retail sales continue to outpace the industry for both brands.
Estimates Move Sharply Higher
The analysts were pleased with the quarter even with the decline in motorized sales.
With the stock market at record highs and unemployment at 20-year lows, that makes for a powerful combination for companies that make discretionary consumer products.
While earnings in fiscal 2018 are expected to decline 8.7% from the year ago period, the Zacks Consensus Estimate has jumped to $3.06 from $2.88 since the earnings report.
Fiscal 2019 is looking even better with earnings expected to rise 19.7% to $3.66. Some analysts are now beginning to price in the corporate tax cuts into their estimates.
Winnebago has paid a 34% effective tax rate so analysts are pricing in a much lower rate into fiscal 2019 estimates.
Shares at Multi-Year Highs
Winnebago has been soaring over the last year as sales heated up.
Revenue is expected to rise 15.1% this year and another 6.1% next year.
Shares are still attractively priced with a forward P/E of 19.1.
It also pays a small dividend, currently yielding 0.7%.
For investors looking for a way to play the hot economy, Winnebago is one to keep on the short list in 2018.
Bear of the Day:
Steelcase Inc.recently posted a disappointing fiscal third quarter with Q4 guidance below the consensus. This Zacks Rank #5 (Strong Sell) sees things turning around by fiscal 2019 however.
Steelcase is one of the largest office environment makers in the world. Founded in 1912 and headquartered in Grand Rapids Michigan, it has global operations.
Met the Estimate in the Third Quarter
On Dec 19, Steelcase reported its fiscal third quarter 2018 results and met the Zacks Consensus of $0.21.
Revenue fell 2% to $772.1 million from $786.5 million in the year ago period.
The Americas saw a 4% decline due to reduced demand for day-to-day business from both large and smaller customers, including lower revenue from legacy products and applications. The orders for day-to-day were down sharply in the beginning of the quarter but were flat for November.
On the other hand EMEA saw revenue growth of 4% but an organic revenue decline of 1%.
The company said it was getting increasingly confident about next year due to its recent improvements in their project win rates. In addition, customer and dealer reaction to its new products have been positive.
Guided Under Consensus for Q4
Steelcase gave fourth quarter guidance of between $0.14 and $0.18. This was well under the Zacks Consensus of $0.24.
"There are three potential items which are not reflected in our earnings estimate for the fourth quarter that we estimate could significantly impact our results," said Dave Sylvester, the CFO.
"Two of these items are related to potential reductions in the U.S. and French statutory tax rates, which those governments are currently considering and if enacted in the fourth quarter could require us to record non-cash charges to reduce the value of our deferred tax assets. In addition, a potential transaction related to an unconsolidated affiliate could result in a pre-tax gain in the fourth quarter."
"We have not included these items in our earnings estimate as there are a number of factors relating to these items which are outside of our control," he said.
It's not surprising, then, that the analysts lowered fourth quarter as well as full year fiscal 2018 estimates.
2 analysts cut full year 2018 to $0.82 from $0.90 over the last week.
That's an earnings decline from fiscal 2017 of 22.4%.
They also got bearish about 2019 despite the company's more upbeat outlook on that year. The 2019 Zacks Consensus Estimate fell to $0.97 from $1.06 since the earnings report.
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 more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
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.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
http://www.zacks.com
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 http://www.zacks.com/performancefor information about the performance numbers displayed in this press release.