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Headquartered in Detroit, MI, General Motors is one of the largest automakers in the world with more than 180,000 employees and 12,450 dealers in 125 countries.
The automaker has three operating segments, General Motors North America (76.5% of total revenues in 2017), General Motors International Operations (15.1%) and GM Financial (8.3%).
GM has eight distinctive automotive brands under its corporate umbrella: Chevrolet, Buick, GMC, Cadillac, Holden, Baojun, Wuling and Jiefang.
Strong Quarterly Results
GM reported Q4 2017 adjusted earnings of $1.65 per share, up 21.3% year-over-year and significantly ahead of the Zacks Consensus Estimate of $1.34.
Revenues also beat our estimate. Strong demand for pickup trucks and SUVs, particularly in North America boosted the results.
“Improvements in all operating segments and an intense focus on cost reductions generated a record quarter and another record year. We plan to build on this momentum in 2018 and beyond as we focus on growth opportunities across many parts of our business,” said the CFO.
Headquartered in Frankfurt, Germany, Deutsche Bank is the largest bank in Germany and one of the largest financial institutions in Europe and the world, with assets totaling €1.48 trillion as of Dec 31, 2017.
It offers a wide variety of investment, financial and related products and services to private individuals, corporate entities and institutional clients around the world.
The bank has following operating segments: Corporate & Investment Bank, Private & Commercial Bank, and Deutsche Asset Management.
Disappointing Fourth Quarter Results
The bank reported net loss of €2.2 billion ($2.6 billion) for Q4 2017 compared with net loss of €1.9 billion ($2.3 billion) in the same quarter a year-ago.
In addition to non-cash charge of €1.4 billion resulting from a valuation adjustment on its deferred tax assets due to the tax reform, results were impacted by double-digit revenue declines in all three of its business units.
They attributed low volatility and decline in client activity as the main reasons for revenue decline.
Falling Estimates
Germany’s flagship bank has seen a plunge in earnings estimates as a result of weak performance and continued woes.
Zacks Consensus Estimates for the current and next year EPS are now $1.30 and $1.64 respectively down from $1.41 and $1.86, just 60 days ago.
The following chart shows negative earnings and price momentum:
After strict regulatory norms imposed on big banks, they have been finding it difficult to generate profits in their investment banking and trading businesses.
Shares of this bank are down more than 28% year-to-date, but with looming CEO succesion and other uncertainties, the overall outlook for the bank remains very cloudy and it is safer to avoid the stock for the time being.
Additional content:
Time for Political Theater: Zacks April Market Strategy
April has arrived.
A potential for a major trade war with China weighs heavily upon the market’s mind.
Read on.
I supply you with more background on how this might play out. The global narrative the market is listening to offers a chaotic mix of contradictions, with positives and negatives.
There are 60 days to go before major China tariffs are to be imposed. Until then, watch the China-U.S. trade negotiations undertaken by the U.S. Treasury.
It won’t be the only political theater available. This is just the most hopeful one.
Zacks April Global Outlook
For a Global Outlook I make Five Points in April. Unfortunately, they contradict each other.
(1) Trade War now the Biggest “Tail Risk” to the Stock Market…
(2) However, Rotation to Global Growth Sectors Must Be Favored, Based on EPS Outlooks.
The estimated earnings growth rate for the S&P 500 for Q1 2018 is 17.0%.
– For companies that generate more than 50% of sales inside the U.S., the earnings growth rate is 16.1%.
– For companies that generate less than 50% of sales inside the U.S., the earnings growth rate is 19.3%.
Global Exposure Double Sales Growth!
– The estimated sales growth rate for the S&P 500 for Q1 2018 is 7.2%.
– For companies that generate more than 50% of sales inside the U.S., the sales growth rate is 5.8%.
– For companies that generate less than 50% of sales inside the U.S., the sales growth rate is 11.4%. This is the best reason to stick with global growth stocks.
(3) What Sectors Drive the Expected Outperformance of S&P 500 Companies with Higher Global Revenue Exposure?
• At the sector level, the Info Tech, Energy, and Materials sectors are projected to be the largest contributors to earnings and revenue growth in Q1-2018 for S&P 500 companies with more global exposure.
• At the sector level, Info Tech (60%),Health Care (58%), and Energy (57%) sectors also have the highest percentages of Buy ratings, from covering analysts.
• Take Energy off the list. With close to 990 Horizontal Fracking rigs up and running in N. America, the oil price outlook is not favorable (basically flat to $2 a barrel down)
(4) “Canary in the Coal Mine”
The Trade War issue is a big problem for Japan right now. The Yen is being used as a safe haven, in a U.S. political environment that has ratcheted up worry over a trade war. 106 on the Yen is safe haven driven. Keep your eyes on the Yen as the proxy for Trade War uncertainty.
(5) The Current Monthly Pace of European Central Bank Bond Buying: €30 billion.
It is intended to run to the end of Sept. 2018, or beyond, if necessary. Keep this stimulus in mind.
Zacks April Sector/Industry/Company Telescope
April Zacks Industry Ranks shows EPS upside leaders to be international revenue growth related.
The three sector leaders were the most exposed internationally: Info Tech, Industrials, & Materials specifically.
The fourth strong sector was Consumer Discretionary. Such sector strength says there remain internal cyclical domestic drivers within a profitable, earnings-driven, late stage economy. The low 4.0% U.S. unemployment rate must matter.
A number of sectors fell back to a Market Weight in April: Financials, Energy, Health Care, and Consumer Staples. That happens when earnings season reporting is not underway.
Utilities rose in April. So did Telcos. But the sector defensives remain at the back.
1) Info Tech stays HOT and Very Attractive. Misc. Tech is the new leader, although Semiconductors stay as a top niche again in April. Electronics is another hot Tech industry to watch.
Zacks #1 Rank (STRONG BUY) Stock: Micron
(2) Industrials stay Very Attractive. The leaders in order: Machinery, Aerospace & Defense, Pollution Control, and Metal Fabricating.
Zacks #1 Rank (STRONG BUY) Stock: Schneider Electric SE
(3) Materials stay Very Attractive. The 2 leaders are Paper and Containers & Glass.
Zacks #1 Rank (STRONG BUY) Stock: WestRock Company
Want more market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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.a
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KB Home, Deutsche, Micron, Schneider and WestRock and Amazon as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – April 9, 2018 – Zacks Equity Research highlights General Motors (GM - Free Report) as the Bull of the Day and Deutsche Bank (DB - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Micron (MU - Free Report) , Schneider Electric SE (SBGSY - Free Report) and WestRock Company (WRK - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Headquartered in Detroit, MI, General Motors is one of the largest automakers in the world with more than 180,000 employees and 12,450 dealers in 125 countries.
The automaker has three operating segments, General Motors North America (76.5% of total revenues in 2017), General Motors International Operations (15.1%) and GM Financial (8.3%).
GM has eight distinctive automotive brands under its corporate umbrella: Chevrolet, Buick, GMC, Cadillac, Holden, Baojun, Wuling and Jiefang.
Strong Quarterly Results
GM reported Q4 2017 adjusted earnings of $1.65 per share, up 21.3% year-over-year and significantly ahead of the Zacks Consensus Estimate of $1.34.
Revenues also beat our estimate. Strong demand for pickup trucks and SUVs, particularly in North America boosted the results.
“Improvements in all operating segments and an intense focus on cost reductions generated a record quarter and another record year. We plan to build on this momentum in 2018 and beyond as we focus on growth opportunities across many parts of our business,” said the CFO.
Bear of the Day:
Headquartered in Frankfurt, Germany, Deutsche Bank is the largest bank in Germany and one of the largest financial institutions in Europe and the world, with assets totaling €1.48 trillion as of Dec 31, 2017.
It offers a wide variety of investment, financial and related products and services to private individuals, corporate entities and institutional clients around the world.
The bank has following operating segments: Corporate & Investment Bank, Private & Commercial Bank, and Deutsche Asset Management.
Disappointing Fourth Quarter Results
The bank reported net loss of €2.2 billion ($2.6 billion) for Q4 2017 compared with net loss of €1.9 billion ($2.3 billion) in the same quarter a year-ago.
In addition to non-cash charge of €1.4 billion resulting from a valuation adjustment on its deferred tax assets due to the tax reform, results were impacted by double-digit revenue declines in all three of its business units.
They attributed low volatility and decline in client activity as the main reasons for revenue decline.
Falling Estimates
Germany’s flagship bank has seen a plunge in earnings estimates as a result of weak performance and continued woes.
Zacks Consensus Estimates for the current and next year EPS are now $1.30 and $1.64 respectively down from $1.41 and $1.86, just 60 days ago.
The following chart shows negative earnings and price momentum:
Deutsche Bank Aktiengesellschaft Price, Consensus and EPS Surprise | Deutsche Bank Aktiengesellschaft Quote
The Bottom Line
After strict regulatory norms imposed on big banks, they have been finding it difficult to generate profits in their investment banking and trading businesses.
Shares of this bank are down more than 28% year-to-date, but with looming CEO succesion and other uncertainties, the overall outlook for the bank remains very cloudy and it is safer to avoid the stock for the time being.
Additional content:
Time for Political Theater: Zacks April Market Strategy
April has arrived.
A potential for a major trade war with China weighs heavily upon the market’s mind.
Read on.
I supply you with more background on how this might play out. The global narrative the market is listening to offers a chaotic mix of contradictions, with positives and negatives.
There are 60 days to go before major China tariffs are to be imposed. Until then, watch the China-U.S. trade negotiations undertaken by the U.S. Treasury.
It won’t be the only political theater available. This is just the most hopeful one.
Zacks April Global Outlook
For a Global Outlook I make Five Points in April. Unfortunately, they contradict each other.
(1) Trade War now the Biggest “Tail Risk” to the Stock Market…
(2) However, Rotation to Global Growth Sectors Must Be Favored, Based on EPS Outlooks.
– For companies that generate more than 50% of sales inside the U.S., the earnings growth rate is 16.1%.
– For companies that generate less than 50% of sales inside the U.S., the earnings growth rate is 19.3%.
– The estimated sales growth rate for the S&P 500 for Q1 2018 is 7.2%.
– For companies that generate more than 50% of sales inside the U.S., the sales growth rate is 5.8%.
– For companies that generate less than 50% of sales inside the U.S., the sales growth rate is 11.4%. This is the best reason to stick with global growth stocks.
(3) What Sectors Drive the Expected Outperformance of S&P 500 Companies with Higher Global Revenue Exposure?
• At the sector level, the Info Tech, Energy, and Materials sectors are projected to be the largest contributors to earnings and revenue growth in Q1-2018 for S&P 500 companies with more global exposure.
• At the sector level, Info Tech (60%),Health Care (58%), and Energy (57%) sectors also have the highest percentages of Buy ratings, from covering analysts.
• Take Energy off the list. With close to 990 Horizontal Fracking rigs up and running in N. America, the oil price outlook is not favorable (basically flat to $2 a barrel down)
(4) “Canary in the Coal Mine”
The Trade War issue is a big problem for Japan right now. The Yen is being used as a safe haven, in a U.S. political environment that has ratcheted up worry over a trade war. 106 on the Yen is safe haven driven. Keep your eyes on the Yen as the proxy for Trade War uncertainty.
(5) The Current Monthly Pace of European Central Bank Bond Buying: €30 billion.
It is intended to run to the end of Sept. 2018, or beyond, if necessary. Keep this stimulus in mind.
Zacks April Sector/Industry/Company Telescope
April Zacks Industry Ranks shows EPS upside leaders to be international revenue growth related.
The three sector leaders were the most exposed internationally: Info Tech, Industrials, & Materials specifically.
The fourth strong sector was Consumer Discretionary. Such sector strength says there remain internal cyclical domestic drivers within a profitable, earnings-driven, late stage economy. The low 4.0% U.S. unemployment rate must matter.
A number of sectors fell back to a Market Weight in April: Financials, Energy, Health Care, and Consumer Staples. That happens when earnings season reporting is not underway.
Utilities rose in April. So did Telcos. But the sector defensives remain at the back.
1) Info Tech stays HOT and Very Attractive. Misc. Tech is the new leader, although Semiconductors stay as a top niche again in April. Electronics is another hot Tech industry to watch.
Zacks #1 Rank (STRONG BUY) Stock: Micron
(2) Industrials stay Very Attractive. The leaders in order: Machinery, Aerospace & Defense, Pollution Control, and Metal Fabricating.
Zacks #1 Rank (STRONG BUY) Stock: Schneider Electric SE
(3) Materials stay Very Attractive. The 2 leaders are Paper and Containers & Glass.
Zacks #1 Rank (STRONG BUY) Stock: WestRock Company
Want more market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
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 >>
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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.a