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Packaging, Lending Tree and Micron as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – March 22, 2018 – Zacks Equity Research highlights Packaging Corp of America (PKG - Free Report) as the Bull of the Day and Lending Tree (TREE - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Micron Technology, Inc. (MU - Free Report) .
Packaging Corp of Americais a Zacks Rank #1 (Strong Buy) and has an A for its growth style score. That puts this stock on my radar screen and the more I dig into the story, the more I like it. That is why this stock is the Bull of the Day.
Description
Packaging Corporation of America is the fourth largest producer of containerboard and corrugated packaging products and the third largest producer of uncoated freesheet paper in the United States.
Earnings History
When I look at a stock, the first thing I look at is the earnings history. PKG has beaten the Zacks Consensus Estimate in 3 of the last 4 quarters so that is already a good thing to see.
Earnings Estimates
The Zacks Rank is an algorithm that is based on earnings estimate revisions. When a stock has positive revisions the Rank moves higher. This is the case for PKG, which has seen estimates for 2018 move from $6.67 to $7.54 over the last 90 days.
The same can be said of 2019, with numbers moving from $7.30 to $8.56 over the same time period.
Financial Overview
The financial overview tab on the Zacks.com website shows all sorts of good data. I see the company posted 14% revenue growth over the last year and 26% earnings growth over that same time period. That tells me that margins are headed higher.
I also see that the net margin increased from 8.05% in the June quarter of 2017 to 10.37% in the December quarter. That is just what aggressive growth investors like to see.
Lending Treeis a Zacks Rank #5 (Strong Sell) and has seen estimates slide over the last few weeks following an earnings miss. This is an interesting case because while a miss is a bad thing and estimates do tend to move lower as a result, there is a silver lining here for TREE. That said, it is the Bear Of The Day, so let's take a look at why this stock has lowest Zacks Rank.
Description
LendingTree is the nation's leading online loan marketplace, empowering consumers as they comparison-shop across a full suite of loan and credit-based offerings.
Recent Miss
The most recent quarter was a miss of the Zacks Consensus Estimate. The company posted EPS of $0.84 when $0.88 was expected. The four-cent miss translated into a negative earnings surprise of 4.5%.
This was the third miss in the last four quarters and that plays a role in how the Zacks Rank is assigned to stocks.
Estimate Revisions
So I see a few moves here and about 30 days the estimate for the current quarter was $1.21, but it has since slid to $1.17. The same movement happened for the next quarter over that time horizon, sliding from $1.46 to $1.33
Silver Lining
Those negative revisions added to the misses are likely the strongest contributors to this stock sliding to a Zacks Rank #5 (Strong Sell). Common sense doesn't play into an algorithm, but the clear idea here is that analysts could be lowering their numbers as the Fed moves interest rates higher. Higher rates probably don't help the chances of more refinances.
That said, I see positive year over year earnings growth for TREE. The current Zacks Consensus Estimate for 2018 is $5.64 and next year I see $7.81. That sort of earnings growth makes it easy to overlook the near term estimate drawdowns.
Micron Technology, Inc.just released its latest quarterly financial results, posting non-GAAP earnings of $2.82 per share and revenues of $7.35 billion.
Currently, MU is a Zacks Rank #1 (Strong Buy), but that could change based on today’s results. Micron shares have gained nearly 130% over the past year, including a 35% surge within the last four weeks. The stock has hovering near a 52-week high before slipping about 3.5% on Thursday.
The stock is currently down 2.0% to $57.72 per share in after-hours trading shortly after its earnings report was released.
Micron:
Beat earnings estimates. The company posted adjusted earnings of $2.82 per share, beating the Zacks Consensus Estimate of $2.76. Micron’s earnings estimates were trending higher in the two months ahead of today’s report.
Beat revenue estimates. The company saw revenue figures of $7.35 billion, beating our consensus estimate of $7.23 billion.
Total revenues were up 58% from the prior-year period. GAAP net income was $3.31 billion, or $2.67 per diluted share, up from $894 million, or $0.77 per diluted share, in the year-ago quarter. Micron ended the quarter with cash, marketable investments, and restricted cash of $8.68 billion.
“Our performance was accentuated by an ongoing shift to high-value solutions as we grew sales to our cloud, mobile and automotive customers and set new records for SSDs and graphics memory,” said CEO Sanjay Mehrotra. “Secular technology trends are driving robust demand for memory and storage, and Micron is well-positioned to address these growing opportunities.”
Micron Technology, Inc., is one of the world's leading providers of advanced semiconductor solutions. Through its worldwide operations, Micron manufactures and markets DRAMs, NAND flash memory, CMOS image sensors, other semiconductor components, and memory modules for use in leading-edge computing, consumer, networking, and mobile products.
Check back later for our full analysis on MU’s earnings report!
Want more market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
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/performance for information about the performance numbers displayed in this press release.
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Packaging, Lending Tree and Micron as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – March 22, 2018 – Zacks Equity Research highlights Packaging Corp of America (PKG - Free Report) as the Bull of the Day and Lending Tree (TREE - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Micron Technology, Inc. (MU - Free Report) .
Here is a synopsis of all three stocks:
Bull of the Day:
Packaging Corp of Americais a Zacks Rank #1 (Strong Buy) and has an A for its growth style score. That puts this stock on my radar screen and the more I dig into the story, the more I like it. That is why this stock is the Bull of the Day.
Description
Packaging Corporation of America is the fourth largest producer of containerboard and corrugated packaging products and the third largest producer of uncoated freesheet paper in the United States.
Earnings History
When I look at a stock, the first thing I look at is the earnings history. PKG has beaten the Zacks Consensus Estimate in 3 of the last 4 quarters so that is already a good thing to see.
Earnings Estimates
The Zacks Rank is an algorithm that is based on earnings estimate revisions. When a stock has positive revisions the Rank moves higher. This is the case for PKG, which has seen estimates for 2018 move from $6.67 to $7.54 over the last 90 days.
The same can be said of 2019, with numbers moving from $7.30 to $8.56 over the same time period.
Financial Overview
The financial overview tab on the Zacks.com website shows all sorts of good data. I see the company posted 14% revenue growth over the last year and 26% earnings growth over that same time period. That tells me that margins are headed higher.
I also see that the net margin increased from 8.05% in the June quarter of 2017 to 10.37% in the December quarter. That is just what aggressive growth investors like to see.
Bear of the Day:
Lending Treeis a Zacks Rank #5 (Strong Sell) and has seen estimates slide over the last few weeks following an earnings miss. This is an interesting case because while a miss is a bad thing and estimates do tend to move lower as a result, there is a silver lining here for TREE. That said, it is the Bear Of The Day, so let's take a look at why this stock has lowest Zacks Rank.
Description
LendingTree is the nation's leading online loan marketplace, empowering consumers as they comparison-shop across a full suite of loan and credit-based offerings.
Recent Miss
The most recent quarter was a miss of the Zacks Consensus Estimate. The company posted EPS of $0.84 when $0.88 was expected. The four-cent miss translated into a negative earnings surprise of 4.5%.
This was the third miss in the last four quarters and that plays a role in how the Zacks Rank is assigned to stocks.
Estimate Revisions
So I see a few moves here and about 30 days the estimate for the current quarter was $1.21, but it has since slid to $1.17. The same movement happened for the next quarter over that time horizon, sliding from $1.46 to $1.33
Silver Lining
Those negative revisions added to the misses are likely the strongest contributors to this stock sliding to a Zacks Rank #5 (Strong Sell). Common sense doesn't play into an algorithm, but the clear idea here is that analysts could be lowering their numbers as the Fed moves interest rates higher. Higher rates probably don't help the chances of more refinances.
That said, I see positive year over year earnings growth for TREE. The current Zacks Consensus Estimate for 2018 is $5.64 and next year I see $7.81. That sort of earnings growth makes it easy to overlook the near term estimate drawdowns.
Additional content:
Micron Posts Earnings Beat, Secular Trends Drive Growth
Micron Technology, Inc.just released its latest quarterly financial results, posting non-GAAP earnings of $2.82 per share and revenues of $7.35 billion.
Currently, MU is a Zacks Rank #1 (Strong Buy), but that could change based on today’s results. Micron shares have gained nearly 130% over the past year, including a 35% surge within the last four weeks. The stock has hovering near a 52-week high before slipping about 3.5% on Thursday.
The stock is currently down 2.0% to $57.72 per share in after-hours trading shortly after its earnings report was released.
Micron:
Beat earnings estimates. The company posted adjusted earnings of $2.82 per share, beating the Zacks Consensus Estimate of $2.76. Micron’s earnings estimates were trending higher in the two months ahead of today’s report.
Beat revenue estimates. The company saw revenue figures of $7.35 billion, beating our consensus estimate of $7.23 billion.
Total revenues were up 58% from the prior-year period. GAAP net income was $3.31 billion, or $2.67 per diluted share, up from $894 million, or $0.77 per diluted share, in the year-ago quarter. Micron ended the quarter with cash, marketable investments, and restricted cash of $8.68 billion.
“Our performance was accentuated by an ongoing shift to high-value solutions as we grew sales to our cloud, mobile and automotive customers and set new records for SSDs and graphics memory,” said CEO Sanjay Mehrotra. “Secular technology trends are driving robust demand for memory and storage, and Micron is well-positioned to address these growing opportunities.”
Micron Technology, Inc., is one of the world's leading providers of advanced semiconductor solutions. Through its worldwide operations, Micron manufactures and markets DRAMs, NAND flash memory, CMOS image sensors, other semiconductor components, and memory modules for use in leading-edge computing, consumer, networking, and mobile products.
Check back later for our full analysis on MU’s earnings report!
Want more market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Download it free >>
Follow us on Twitter: http://twitter.com/zacksresearch
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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 http://www.zacks.com/performance for information about the performance numbers displayed in this press release.