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Comerica, Thor Industries, Alphabet and Facebook highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – July 24, 2018 – Zacks Equity Research highlights Comerica Inc. (CMA - Free Report) as the Bull of the Day, Thor Industries, Inc. (THO - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onAlphabet Inc. (GOOGL - Free Report) and Facebook .
Comerica Inc. is growing earnings as the interest rates rise. This Zacks Rank #1 (Strong Buy) recently surprised on the Zacks Consensus by 15%.
Comerica is regional bank headquartered in Dallas, Texas with locations in Texas, Arizona, California, Florida and Michigan. With a market cap of $16.4 billion, it has three major business segments including The Business Bank, the Retail Bank and Wealth Management.
Big Beat in the Second Quarter
On July 17, Comerica reported its second quarter results and blew by the Zacks Consensus by 25 cents. Earnings were $1.87 versus the consensus of $1.62.
Earnings rose 18% quarter over quarter thanks to loan growth and favorable credit metrics, combined with higher fee income.
Credit quality, always a concern with banks, especially given the length of this recovery, remains strong. Gross charge-offs of $20 million were more than offset by recoveries.
It also had a broad-based decline in problem loans. Criticized loans fell $355 million, or 17%, and are now less than 4% of total loans as of the end of the second quarter.
Returning More to the Shareholders
The Federal Reserve recently announced that Comerica was no longer subject to certain regulations and reporting requirements left over from the Great Recession crisis.
The Board is meeting on July 24 to determine its actions to increase returns to shareholders.
It was already doing so, even with the restrictions. As of June 30, it had returned $227 million to shareholders in the form of dividends and stock repurchases.
Will it increase this amount?
Comerica also recently increased the dividend 13% to $0.34 per share, which is currently yielding 1.5%.
Stay tuned.
Earnings Estimates Jump
After the big beat, the analysts scrambled to raise their 2018, as well as their 2019, earnings estimates.
13 estimates were raised for 2018 in the last week, pushing the Zacks Consensus Estimate up to $6.98 from $6.73.
That's earnings growth of 47.3% compared to 2017 when Comerica made just $4.74.
They're also bullish on 2019 as 10 raised estimates there as well, pushing the Zacks Consensus up to $7.82 from $7.66. That's another 11.9% earnings growth.
A Buying Opportunity?
After a big run in 2017, Comerica shares, like many of the banks, have been stalled in 2018.
Thor Industries, Inc. is getting pressured by both a tight labor market and the steel and aluminum tariffs. This Zacks Rank #5 (Strong Sell) has seen the air come out of its stock's sails despite another quarter of record sales.
Thor is the world's largest manufacturer of recreational vehicles, also known as "RVs." It's brands include Airstream, Bison, Dutchman and Jayco. It sells both towables and motorized homes.
Missed on Earnings in the Fiscal Third Quarter
On June 6, Thor reported its fiscal third quarter results and missed on the Zacks Consensus Estimate by 12 cents. It reported $2.53 versus the consensus of $2.65.
It was the first miss for the company in five quarters.
However, it was a record third quarter with net sales up 11.7% to $2.25 billion as both Baby Boomers and Millennials take to the open road in record numbers.
Sales rose 12.8% for the Towable segment, that includes the popular Airstream, and gained 8.8% for the Motorized segment.
Gross profit, however, fell to 14.1% from 14.6% a year ago, due to costs associated with warranty expenses and slightly higher labor and material costs.
The unemployment rate in Elkhart, Indiana, where Thor's main manufacturing plants and headquarters are located, has remained near historic low levels. But even with those pressures, Thor said that its labor pressures had moderated in the quarter.
It's facing "headwinds" due to the steel and aluminum tariffs as well as higher warranty costs.
Analysts Cut Estimates
While the RV industry remains strong, as does the backlog and orders, the analysts cut fiscal 2018 and 2019 estimates anyway due to the commodity cost pressures and uncertainties.
The fiscal 2018 Zacks Consensus Estimate fell to $8.77 from $9.16 over the last 60 days. That's still a gain of 23% over the fiscal 2017 earnings of $7.09.
Analysts also cut fiscal 2019 estimates. That pushed the Zacks Consensus down to $9.42 from $10.88 just 2 months ago. But that's still another 7.4% gain.
The analysts aren't saying the earnings growth cycle has peaked. Their estimates indicate that the gains are simply slowing.
Additional content:
Google’s Ad Revenue Climbs 24%, Paid Clicks Surge 58%
The release of Google parent Alphabet Inc.’s second quarter financial results took center stage Monday afternoon, with shares up over 5% following strong top and bottom line beats.
Google posted adjusted Q2 earnings that topped the Zacks Consensus Estimate of $9.51 per share. The company also reported total revenues of $32.65 billion, which marked a 26% climb from the year-ago period. Taking out revenues from Google Network Members, the company saw revenue figures of $27.84 billion, surpassing our consensus estimate of $25.65 billion (also read: Alphabet Crushes Earnings, Surges 5% on Strong Performance).
On top of Alphabet’s basic earnings and revenue results, investors are also likely interested in the company’s growth in specific business areas. Google’s search business has powered the company for years. But the firm has made an effort to enter an array of industries that are set to boom, from mobile payments to cloud computing and artificial intelligence.
Advertising
Alphabet, which has become the most powerful advertising player in the U.S., along with Facebook, reported revenue of $28.09 billion in its vitally important advertising unit. This marked a roughly 24% climb from the year-ago quarter’s $22.67 billion. Furthermore, paid clicks on Google properties soared 58%.
The expansion of Google’s advertising business is staggering and continues to be amazing news for investors because there was a time not too long ago that people feared the shift to mobile would negatively impact Google’s bread and butter advertising business.
Google Other Revenues
The second quarter also saw the company’s “Google other revenues” category, which is comprised of the Google Play Store, Google Cloud offerings, and its hardware initiatives, including its growing Nest “smart” home automation division, surge by over 36% to hit $4.43 billion.
Other Bets
Alphabet’s Other Bets unit features Google Fiber, which provides broadband internet services in select cities throughout the U.S., Alphabet's life sciences brand, Verily, and other more outside of the box initiatives. Other Bets revenues climbed by nearly 50% from $97 million to hit $145 million.
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.
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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Comerica, Thor Industries, Alphabet and Facebook highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – July 24, 2018 – Zacks Equity Research highlights Comerica Inc. (CMA - Free Report) as the Bull of the Day, Thor Industries, Inc. (THO - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onAlphabet Inc. (GOOGL - Free Report) and Facebook .
Here is a synopsis of all four stocks:
Bull of the Day:
Comerica Inc. is growing earnings as the interest rates rise. This Zacks Rank #1 (Strong Buy) recently surprised on the Zacks Consensus by 15%.
Comerica is regional bank headquartered in Dallas, Texas with locations in Texas, Arizona, California, Florida and Michigan. With a market cap of $16.4 billion, it has three major business segments including The Business Bank, the Retail Bank and Wealth Management.
Big Beat in the Second Quarter
On July 17, Comerica reported its second quarter results and blew by the Zacks Consensus by 25 cents. Earnings were $1.87 versus the consensus of $1.62.
Earnings rose 18% quarter over quarter thanks to loan growth and favorable credit metrics, combined with higher fee income.
Credit quality, always a concern with banks, especially given the length of this recovery, remains strong. Gross charge-offs of $20 million were more than offset by recoveries.
It also had a broad-based decline in problem loans. Criticized loans fell $355 million, or 17%, and are now less than 4% of total loans as of the end of the second quarter.
Returning More to the Shareholders
The Federal Reserve recently announced that Comerica was no longer subject to certain regulations and reporting requirements left over from the Great Recession crisis.
The Board is meeting on July 24 to determine its actions to increase returns to shareholders.
It was already doing so, even with the restrictions. As of June 30, it had returned $227 million to shareholders in the form of dividends and stock repurchases.
Will it increase this amount?
Comerica also recently increased the dividend 13% to $0.34 per share, which is currently yielding 1.5%.
Stay tuned.
Earnings Estimates Jump
After the big beat, the analysts scrambled to raise their 2018, as well as their 2019, earnings estimates.
13 estimates were raised for 2018 in the last week, pushing the Zacks Consensus Estimate up to $6.98 from $6.73.
That's earnings growth of 47.3% compared to 2017 when Comerica made just $4.74.
They're also bullish on 2019 as 10 raised estimates there as well, pushing the Zacks Consensus up to $7.82 from $7.66. That's another 11.9% earnings growth.
A Buying Opportunity?
After a big run in 2017, Comerica shares, like many of the banks, have been stalled in 2018.
Yet, they're also pretty cheap.
Bear of the Day:
Thor Industries, Inc. is getting pressured by both a tight labor market and the steel and aluminum tariffs. This Zacks Rank #5 (Strong Sell) has seen the air come out of its stock's sails despite another quarter of record sales.
Thor is the world's largest manufacturer of recreational vehicles, also known as "RVs." It's brands include Airstream, Bison, Dutchman and Jayco. It sells both towables and motorized homes.
Missed on Earnings in the Fiscal Third Quarter
On June 6, Thor reported its fiscal third quarter results and missed on the Zacks Consensus Estimate by 12 cents. It reported $2.53 versus the consensus of $2.65.
It was the first miss for the company in five quarters.
However, it was a record third quarter with net sales up 11.7% to $2.25 billion as both Baby Boomers and Millennials take to the open road in record numbers.
Sales rose 12.8% for the Towable segment, that includes the popular Airstream, and gained 8.8% for the Motorized segment.
Gross profit, however, fell to 14.1% from 14.6% a year ago, due to costs associated with warranty expenses and slightly higher labor and material costs.
The unemployment rate in Elkhart, Indiana, where Thor's main manufacturing plants and headquarters are located, has remained near historic low levels. But even with those pressures, Thor said that its labor pressures had moderated in the quarter.
It's facing "headwinds" due to the steel and aluminum tariffs as well as higher warranty costs.
Analysts Cut Estimates
While the RV industry remains strong, as does the backlog and orders, the analysts cut fiscal 2018 and 2019 estimates anyway due to the commodity cost pressures and uncertainties.
The fiscal 2018 Zacks Consensus Estimate fell to $8.77 from $9.16 over the last 60 days. That's still a gain of 23% over the fiscal 2017 earnings of $7.09.
Analysts also cut fiscal 2019 estimates. That pushed the Zacks Consensus down to $9.42 from $10.88 just 2 months ago. But that's still another 7.4% gain.
The analysts aren't saying the earnings growth cycle has peaked. Their estimates indicate that the gains are simply slowing.
Additional content:
Google’s Ad Revenue Climbs 24%, Paid Clicks Surge 58%
The release of Google parent Alphabet Inc.’s second quarter financial results took center stage Monday afternoon, with shares up over 5% following strong top and bottom line beats.
Google posted adjusted Q2 earnings that topped the Zacks Consensus Estimate of $9.51 per share. The company also reported total revenues of $32.65 billion, which marked a 26% climb from the year-ago period. Taking out revenues from Google Network Members, the company saw revenue figures of $27.84 billion, surpassing our consensus estimate of $25.65 billion (also read: Alphabet Crushes Earnings, Surges 5% on Strong Performance).
On top of Alphabet’s basic earnings and revenue results, investors are also likely interested in the company’s growth in specific business areas. Google’s search business has powered the company for years. But the firm has made an effort to enter an array of industries that are set to boom, from mobile payments to cloud computing and artificial intelligence.
Advertising
Alphabet, which has become the most powerful advertising player in the U.S., along with Facebook, reported revenue of $28.09 billion in its vitally important advertising unit. This marked a roughly 24% climb from the year-ago quarter’s $22.67 billion. Furthermore, paid clicks on Google properties soared 58%.
The expansion of Google’s advertising business is staggering and continues to be amazing news for investors because there was a time not too long ago that people feared the shift to mobile would negatively impact Google’s bread and butter advertising business.
Google Other Revenues
The second quarter also saw the company’s “Google other revenues” category, which is comprised of the Google Play Store, Google Cloud offerings, and its hardware initiatives, including its growing Nest “smart” home automation division, surge by over 36% to hit $4.43 billion.
Other Bets
Alphabet’s Other Bets unit features Google Fiber, which provides broadband internet services in select cities throughout the U.S., Alphabet's life sciences brand, Verily, and other more outside of the box initiatives. Other Bets revenues climbed by nearly 50% from $97 million to hit $145 million.
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>>
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.