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DICK'S, Las Vegas Sands, Regeneron, Gilead and Eli Lilly as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – October 6, 2020 – Zacks Equity Research highlights DICK’S Sporting Goods (DKS - Free Report) as the Bull of the Day and Las Vegas Sands (LVS - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Regeneron Pharmaceuticals, Inc. (REGN - Free Report) , Gilead Sciences (GILD - Free Report) and Eli Lilly and Company (LLY - Free Report) .
DICK’S Sporting Goods is a Zacks #1 (Strong Buy) that operates as a sporting goods retailer, offering athletic shoes, apparel, accessories, and outdoor and athletic equipment. The company caters to consumers interested in team sports, fitness, camping, fishing, tennis, golf, water sports and more.
The company hit a home run last quarter, beating on both the top and bottom lines. The stock gapped higher after EPS and has continued its bull run as it approaches all-time highs made way back in 2016.
About the Company
DICK’S Sporting Goods operates over 700 stores and has 15,000 full time employees. It is headquartered in Coraopolis, Pennsylvania and was founded in 1948.
The company has a market cap of about $5 Billion and has Zacks Style Scores of “A” in Growth and “A” in Value. The stock pays a dividend of 2% and has Forward PE is 16.
DICK'S retail stores offer nationally recognized brands, including Callaway Golf adidas, The North Face, Asics, Under Armor, Nike, Columbia and Remington.
Q2 Earnings
In late August, DICK’S reported a topline beat and a positive EPS surprise of 159%. Consolidated Same Store Sales came in at 20.7 %, while e-commerce made up 30 % of total net sales v 12% last year. Revenues from eCommerce were up 194% year over year as consumers shifted to online shopping during the pandemic.
CEO Edward Stack had the following comments on the quarter:
“The favorable shifts in consumer demand that drove our strong comps during Q2 have continued into Q3 but have been partially offset by softness across key back-to-school categories because of the uncertain timing of a return to school and fall team sports. Taken together, through the first three weeks of Q3, our consolidated comp sales have increased 11%, which demonstrates the strength of our diverse category portfolio.”
Estimates
Over the last 60 days, estimates have surged higher. For the current quarter, we have seen numbers raised by 256%, from $0.23 to $0.82. For next year, we have seen a 33% move higher in that same time frame.
Analysts have taken price targets higher since earnings, citing underappreciated earnings power and low valuation.
The Pandemic Atmosphere
With consumers adjusting to the current COVID environment, the surge in e-commerce sales has been similar to holiday levels. The pandemic has forced people to change the way they get exercise and recreation. The result was a search online for dumbbells, golf clubs, running shoes or camping gear. DICK’S online presence allowed the company to thrive and while they will be hit in the back to school sales area, the pandemic environment will help offset those lost sales.
The Technicals
The stock was stuck in the mid-$30 area for two years until it broke out towards the end of 2019. Investors pushed the stock up to the $50 level, but the COVID sell off earlier in the year dropped it all the way to $14. Like most stocks, it snapped back quickly to the $40 area.
The stock continued to grind higher above $40 until last quarter's earnings helped it shoot above the $50 level. The bulls have recently bought DKS up to $60, just a couple percentage points short of its 2016 highs of $62.88.
The stock is significantly above its moving averages with the 50-day at $51.60 and the 200-day all the way down at $40.25. For fans of Fibonacci retracement levels, the 161.8% target, drawn 2020 highs to lows, is at $72. Investors looking to take some profits should eye those levels.
Bottom Line
While retail stores have struggled during the pandemic, those that adjusted well to digital sales thrived. Additionally, when the business has products that are in high demand, record sales are being achieved. For DICK’S they benefited in both areas.
While the pandemic surge might slow, the company should continue to see growth as their stores come back and the pandemic ends. In the meantime, the digital side of the business will continue to thrive and become a permanent way people shop at DICK’S.
Las Vegas Sands is a Zacks Rank #5 (Strong Sell) that runs resorts and casinos in the U.S. and Macao. While stocks like PENN and DKNG rip as the sports betting trend goes mobile, Las Vegas Sands struggles in the COVID environment.
While the stock performance is a red flag, when investors look closer at the fundamentals, they should be even more concerned. Last quarter’s revenues were a big disappointment, which led analysts to lower estimates. Additionally, the pandemic is preventing casinos from getting their typical traffic.
About LVS
Las Vegas Sands operates The Venetian Resort Hotel Casino on the Las Vegas Strip; and the Sands Expo and Convention Center in Las Vegas, Nevada. Additional properties include The Venetian Macao Resort Hotel, the Sands Cotai Central, The Parisian Macao, The Plaza Macao and Four Seasons Hotel Macao, Cotai Strip, and the Sands Macao in Macao, the People's Republic of China; and Marina Bay Sands in Singapore.
The company was founded in 1988, is headquartered in Las Vegas, Nevada and employs 50,000 fulltime employees.
Las Vegas Sands has a market cap of about $35 Billion and has Zacks Style Scores of “F” in Growth and “C” in Value.
Earnings
The company actually reported an EPS surprise beat of 62%. Normally, investors would buy a stock up on a beat like that, but the stock traded lower. Revenues came up very short of the expected $739M, with only $98M reported.
The pandemic is obviously hurting gaming, but the resorts are seeing empty occupancy. Rates at Venetian Macau was at 2.1% vs 93.9% last year. For Sands Cotai, occupancy was as 1.1% vs the 94.8%.
Estimate Revisions.
The poor quarter is not the fault of management or anything wrong the company has done. It is of course the pandemic that is hurting the business. With government mandated shutdowns and the fear of travel still in the air, casinos and hotels are simply not desirable places to be. Until there is a perception that travel and being around crowds is safe again, the company will struggle.
For these reasons, we are seeing analysts take down earnings estimates. Over the last 30 days, the current quarter estimates have fallen 25%, from -$.36 to -$.45. Things will improve next year, with estimates falling only 2.3% over that same time frame. However, investors should be aware that these estimates assume that the pandemic is in the rear-view mirror.
Stock Performance and Technical
Looking at the performance of gambling stocks a couple names stick out. Let’s look at some big names and what they have done since in 2020:
DKNG: +260%
PENN: +170%
BYD: +6%
CZR: -5%
MGM: -35%
LVS: -36%
WYNN: -48%
One thing sticks out when looking at these returns: Mobile Betting. The legalization of sports betting in 18 states has allowed a shift of the action out of vegas into companies that can have books in those states. Both DraftKings and Penn National have moved quickly and their stocks have hit big.
For LVS and other traditional names, they just get back to normal until COVID is gone.
In Summary
It should be obvious to investors that LVS is dead money right now. The question is if they are worth the risk at current levels and the answer seems to be no. Why sit in a stock that will be tortured by the virus when the money can be put to work in the companies thriving in these times. Until there is a change in the atmosphere, the odds are not the favor of Las Vegas Sands.
Additional content:
Regeneron, Gilead in Focus as Trump Battles Covid-19
As news of President Donald Trump testing positive for COVID-19 was made public, companies working on experimental treatments automatically came under the spotlight.
Biotech major Regeneron Pharmaceuticals, Inc. confirmed the White House statement that it provided a single 8-gram dose of its experimental COVID-19 therapy REGNCOV2 to be administered to the president.
REGN-COV2 is a combination of two monoclonal antibodies (REGN10933 and REGN10987) and was designed specifically to block infectivity of SARS-CoV-2, the virus that causes COVID-19.
REGN-COV2 was provided in response to an Individual Patient Investigational New Drug (IND) application, which was commonly known as “compassionate use” request from the President’s physicians. It is being evaluated for both treatment and prevention of COVID-19.
We note that Regeneron was in news last week when it announced promising first data from a descriptive analysis of a seamless phase I/II/III study of REGN-COV2. Data showed that the candidate reduced the viral load and the time to alleviate symptoms in non-hospitalized patients with COVID-19. REGN-COV2 also showed positive trends in lowering medical visits.
Reportedly, the president was also administered Gilead Sciences’ antiviral drug remdesivir. The FDA granted Emergency Use Authorization (EUA) to remdesivir for the COVID-19 infection. Multiple ongoing international phase III studies are evaluating the safety and efficacy of remdesivir for the treatment of SARS-CoV-2 infection. In fact, remdesivir is pioneering the race for a possible treatment of this deadly virus.
Currently, there are no FDA-approved treatments for the severe illness caused by SARS-CoV-2. The pharma/biotech sector is racing against time to come up with treatments and vaccines to cure the contagion. Given the alarming levels of the spread and severity of the pandemic, quite a few biotechs are developing antibodies or evaluating their approved drugs or pipeline candidates to determine if they are effective enough to treat the infected patients.
While both Regeneron and Gilead are spearheading the competition for cracking the treatment of COVID-19, others too joined the club.
Earlier, another pharma giant Eli Lilly and Company and partner Incyte announced that their rheumatoid arthritis drug Olumiant in combination with remdesivir met the primary endpoint of reduction of time to recovery in comparison to remdesivir alone.
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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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DICK'S, Las Vegas Sands, Regeneron, Gilead and Eli Lilly as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – October 6, 2020 – Zacks Equity Research highlights DICK’S Sporting Goods (DKS - Free Report) as the Bull of the Day and Las Vegas Sands (LVS - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Regeneron Pharmaceuticals, Inc. (REGN - Free Report) , Gilead Sciences (GILD - Free Report) and Eli Lilly and Company (LLY - Free Report) .
Here is a synopsis of all four stocks:
Bull of the Day:
DICK’S Sporting Goods is a Zacks #1 (Strong Buy) that operates as a sporting goods retailer, offering athletic shoes, apparel, accessories, and outdoor and athletic equipment. The company caters to consumers interested in team sports, fitness, camping, fishing, tennis, golf, water sports and more.
The company hit a home run last quarter, beating on both the top and bottom lines. The stock gapped higher after EPS and has continued its bull run as it approaches all-time highs made way back in 2016.
About the Company
DICK’S Sporting Goods operates over 700 stores and has 15,000 full time employees. It is headquartered in Coraopolis, Pennsylvania and was founded in 1948.
The company has a market cap of about $5 Billion and has Zacks Style Scores of “A” in Growth and “A” in Value. The stock pays a dividend of 2% and has Forward PE is 16.
DICK'S retail stores offer nationally recognized brands, including Callaway Golf adidas, The North Face, Asics, Under Armor, Nike, Columbia and Remington.
Q2 Earnings
In late August, DICK’S reported a topline beat and a positive EPS surprise of 159%. Consolidated Same Store Sales came in at 20.7 %, while e-commerce made up 30 % of total net sales v 12% last year. Revenues from eCommerce were up 194% year over year as consumers shifted to online shopping during the pandemic.
CEO Edward Stack had the following comments on the quarter:
“The favorable shifts in consumer demand that drove our strong comps during Q2 have continued into Q3 but have been partially offset by softness across key back-to-school categories because of the uncertain timing of a return to school and fall team sports. Taken together, through the first three weeks of Q3, our consolidated comp sales have increased 11%, which demonstrates the strength of our diverse category portfolio.”
Estimates
Over the last 60 days, estimates have surged higher. For the current quarter, we have seen numbers raised by 256%, from $0.23 to $0.82. For next year, we have seen a 33% move higher in that same time frame.
Analysts have taken price targets higher since earnings, citing underappreciated earnings power and low valuation.
The Pandemic Atmosphere
With consumers adjusting to the current COVID environment, the surge in e-commerce sales has been similar to holiday levels. The pandemic has forced people to change the way they get exercise and recreation. The result was a search online for dumbbells, golf clubs, running shoes or camping gear. DICK’S online presence allowed the company to thrive and while they will be hit in the back to school sales area, the pandemic environment will help offset those lost sales.
The Technicals
The stock was stuck in the mid-$30 area for two years until it broke out towards the end of 2019. Investors pushed the stock up to the $50 level, but the COVID sell off earlier in the year dropped it all the way to $14. Like most stocks, it snapped back quickly to the $40 area.
The stock continued to grind higher above $40 until last quarter's earnings helped it shoot above the $50 level. The bulls have recently bought DKS up to $60, just a couple percentage points short of its 2016 highs of $62.88.
The stock is significantly above its moving averages with the 50-day at $51.60 and the 200-day all the way down at $40.25. For fans of Fibonacci retracement levels, the 161.8% target, drawn 2020 highs to lows, is at $72. Investors looking to take some profits should eye those levels.
Bottom Line
While retail stores have struggled during the pandemic, those that adjusted well to digital sales thrived. Additionally, when the business has products that are in high demand, record sales are being achieved. For DICK’S they benefited in both areas.
While the pandemic surge might slow, the company should continue to see growth as their stores come back and the pandemic ends. In the meantime, the digital side of the business will continue to thrive and become a permanent way people shop at DICK’S.
Bear of the Day:
Las Vegas Sands is a Zacks Rank #5 (Strong Sell) that runs resorts and casinos in the U.S. and Macao. While stocks like PENN and DKNG rip as the sports betting trend goes mobile, Las Vegas Sands struggles in the COVID environment.
While the stock performance is a red flag, when investors look closer at the fundamentals, they should be even more concerned. Last quarter’s revenues were a big disappointment, which led analysts to lower estimates. Additionally, the pandemic is preventing casinos from getting their typical traffic.
About LVS
Las Vegas Sands operates The Venetian Resort Hotel Casino on the Las Vegas Strip; and the Sands Expo and Convention Center in Las Vegas, Nevada. Additional properties include The Venetian Macao Resort Hotel, the Sands Cotai Central, The Parisian Macao, The Plaza Macao and Four Seasons Hotel Macao, Cotai Strip, and the Sands Macao in Macao, the People's Republic of China; and Marina Bay Sands in Singapore.
The company was founded in 1988, is headquartered in Las Vegas, Nevada and employs 50,000 fulltime employees.
Las Vegas Sands has a market cap of about $35 Billion and has Zacks Style Scores of “F” in Growth and “C” in Value.
Earnings
The company actually reported an EPS surprise beat of 62%. Normally, investors would buy a stock up on a beat like that, but the stock traded lower. Revenues came up very short of the expected $739M, with only $98M reported.
The pandemic is obviously hurting gaming, but the resorts are seeing empty occupancy. Rates at Venetian Macau was at 2.1% vs 93.9% last year. For Sands Cotai, occupancy was as 1.1% vs the 94.8%.
Estimate Revisions.
The poor quarter is not the fault of management or anything wrong the company has done. It is of course the pandemic that is hurting the business. With government mandated shutdowns and the fear of travel still in the air, casinos and hotels are simply not desirable places to be. Until there is a perception that travel and being around crowds is safe again, the company will struggle.
For these reasons, we are seeing analysts take down earnings estimates. Over the last 30 days, the current quarter estimates have fallen 25%, from -$.36 to -$.45. Things will improve next year, with estimates falling only 2.3% over that same time frame. However, investors should be aware that these estimates assume that the pandemic is in the rear-view mirror.
Stock Performance and Technical
Looking at the performance of gambling stocks a couple names stick out. Let’s look at some big names and what they have done since in 2020:
DKNG: +260%
PENN: +170%
BYD: +6%
CZR: -5%
MGM: -35%
LVS: -36%
WYNN: -48%
One thing sticks out when looking at these returns: Mobile Betting. The legalization of sports betting in 18 states has allowed a shift of the action out of vegas into companies that can have books in those states. Both DraftKings and Penn National have moved quickly and their stocks have hit big.
For LVS and other traditional names, they just get back to normal until COVID is gone.
In Summary
It should be obvious to investors that LVS is dead money right now. The question is if they are worth the risk at current levels and the answer seems to be no. Why sit in a stock that will be tortured by the virus when the money can be put to work in the companies thriving in these times. Until there is a change in the atmosphere, the odds are not the favor of Las Vegas Sands.
Additional content:
Regeneron, Gilead in Focus as Trump Battles Covid-19
As news of President Donald Trump testing positive for COVID-19 was made public, companies working on experimental treatments automatically came under the spotlight.
Biotech major Regeneron Pharmaceuticals, Inc. confirmed the White House statement that it provided a single 8-gram dose of its experimental COVID-19 therapy REGNCOV2 to be administered to the president.
REGN-COV2 is a combination of two monoclonal antibodies (REGN10933 and REGN10987) and was designed specifically to block infectivity of SARS-CoV-2, the virus that causes COVID-19.
REGN-COV2 was provided in response to an Individual Patient Investigational New Drug (IND) application, which was commonly known as “compassionate use” request from the President’s physicians. It is being evaluated for both treatment and prevention of COVID-19.
We note that Regeneron was in news last week when it announced promising first data from a descriptive analysis of a seamless phase I/II/III study of REGN-COV2. Data showed that the candidate reduced the viral load and the time to alleviate symptoms in non-hospitalized patients with COVID-19. REGN-COV2 also showed positive trends in lowering medical visits.
Reportedly, the president was also administered Gilead Sciences’ antiviral drug remdesivir. The FDA granted Emergency Use Authorization (EUA) to remdesivir for the COVID-19 infection. Multiple ongoing international phase III studies are evaluating the safety and efficacy of remdesivir for the treatment of SARS-CoV-2 infection. In fact, remdesivir is pioneering the race for a possible treatment of this deadly virus.
Currently, there are no FDA-approved treatments for the severe illness caused by SARS-CoV-2. The pharma/biotech sector is racing against time to come up with treatments and vaccines to cure the contagion. Given the alarming levels of the spread and severity of the pandemic, quite a few biotechs are developing antibodies or evaluating their approved drugs or pipeline candidates to determine if they are effective enough to treat the infected patients.
While both Regeneron and Gilead are spearheading the competition for cracking the treatment of COVID-19, others too joined the club.
Earlier, another pharma giant Eli Lilly and Company and partner Incyte announced that their rheumatoid arthritis drug Olumiant in combination with remdesivir met the primary endpoint of reduction of time to recovery in comparison to remdesivir alone.
Regeneron currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
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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.