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Western Digital, Bed Bath & Beyond and Alcoa highlighted as Zacks Bull and Bear of the Day

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For Immediate Release

Chicago, IL – April 19, 2018 – Zacks Equity Research highlights Western Digital Corporation (WDC - Free Report) as the Bull of the Day, Bed Bath & Beyond as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Alcoa Corp. (AA - Free Report) .

Here is a synopsis of all three stocks:

Bull of the Day:

Headquartered in Irvine, CA, Western Digital Corporation is a leading provider of storage technologies and solutions. They are one of the largest hard disk drive (HDD) producers in the US. They design, develop, manufacture and market a broad range of HDDs, which are used in numerous consumer electronic devices.

With the acquisition of SanDisk, the company has ventured into the flash drive storage technology space.

Better-than-expected Results

On January 25, WDC reported results for their second fiscal quarter ended Dec. 29, 2017, beating on both the top and bottom lines.  

Non-GAAP earnings of $3.95 per share, were ahead of the Zacks Consensus Estimate by 14 cents and up 71.7% year-over-year. Revenues jumped 9.2% year-over-year thanks to strong demand in the company’s end-markets.

"We continued our strong financial performance in the December quarter, with nine percent year-over-year revenue growth, driven by each of our major end market categories and solid execution by our team," said the CEO.

"We once again generated strong operating cash flow, reflecting continued healthy demand in our end markets, most notably for our capacity enterprise hard drives and flash-based products.”

Rising Estimates

Analysts have been raising the estimates for the company after strong results. Zacks Consensus Estimates for the current and next year have surged to $13.98 per share and $12.33 per share, from $13.46 and $11.98 respectively, before the results. Rising estimates sent the stock back to a Zacks Rank #1 (Strong Buy).

Bear of the Day:

Founded in 1971, Bed Bath & Beyond is an omnichannel retailer offering a wide selection of domestic merchandise and home furnishings.

As of Mar 3, 2018, the company operated 1,552 across 50 states, DC, Puerto Rico and Canada, including its namesake stores as well as stores under other names.

Lackluster Results and Guidance Reflect Rising Challenges

The company reported fourth-quarter fiscal 2017 results last week. While they beat our estimates on the top and bottom lines, comps declined due to the lower number of store transactions, which was somewhat offset by higher average transaction amounts.

Guidance was weaker than street estimates.

Shares plunged after the report.

Falling Estimates

Analysts have slashed their estimates for the company after weak guidance.  Zacks Consensus Estimates for the current and next fiscal year have fallen to $2.36 per share and $2.02 per share from $2.76 and $2.53 respectively, before the results.

Falling estimates sent the stock to a Zacks Rank #5 (Strong Sell).

Bottom Line

In addition to disappointing foot traffic in malls, the retail space is going through a shift toward online shopping, particularly from Amazon. With tightening labor markets, wage pressure has also started hurting retailers.

The stock is down about 19% year-to-date but a rebound any time soon does not appear likely.

Additional content:

Alcoa (AA - Free Report) Posts Earnings Beat, Raises Guidance

Alcoa Corp. just released its latest quarterly financial results, posting adjusted earnings of $0.77 per share and revenues of $3.09 billion.

Currently, AA is a Zacks Rank #3 (Hold), but that could change based on today’s results. Heading into the report, Alcoa shares had gained more than 23% over the last month, including a 4% surge during regular trading hours Wednesday.

The stock is currently up an additional 4.7% to $62.25 per share in after-hours trading shortly after its earnings report was released.

Alcoa:

Beat earnings estimates. The company posted adjusted earnings of $0.77 per share, beating the Zacks Consensus Estimate of $0.60. Investors should note that this consensus projection had trended downward over the past two months, moving about three cents lower over that timeframe.

Missed revenue estimates. The company saw revenue figures of $3.09 billion, beating our consensus estimate of $3.17 billion. Total revenue was up 16.2% year over year.

Alcoa ended the quarter with a cash balance of $1.2 billion, down about $162 million sequentially but up $392 million from the year-ago period.

“Our first quarter results point to a good start for the year, enabling us to make further progress against our strategic priorities to reduce complexity, drive returns, and strengthen the balance sheet,” said CEO Roy Harvey.

Alcoa raised its full-year outlook for adjusted EBITDA to a range of $3.5 billion to $3.7 billion, up from the prior quarter’s range of $2.6 billion to $2.8 billion.

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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.

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