Back to top

Image: Bigstock

Williams-Sonoma, Hawaiian Holdings, Deere & Co, Micron and Trade Desk highlighted as Zacks Bull and Bear of the Day

Read MoreHide Full Article

For Immediate Release

Chicago, IL – December 16, 2020 – Zacks Equity Research Shares of Williams-Sonoma, Inc. (WSM - Free Report) as the Bull of the Day, Hawaiian Holdings, Inc. (HA - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Deere & Company (DE - Free Report) , Micron Technology, Inc. (MU - Free Report) and The Trade Desk, Inc. (TTD - Free Report) .

Here is a synopsis of all four stocks:

Bull of the Day:

Based in San Francisco, Williams-Sonoma is a multi-channel specialty retailer of premium quality home products. Its brand portfolio consists of Pottery Barn, West Elm, Potter Barn Kids & Teen, Mark and Graham, and the namesake Williams-Sonoma.

Blowout Third Quarter

Last month, Williams-Sonoma posted better-than-expected third quarter results, sending the stock as much as 7.5% higher.

Total comparable sales jumped 24.4% and e-commerce sales, which now make up roughly half of the company’s revenue, jumped 49% (and contributed almost 70% of total sales).

Unsurprisingly, in-store sales were down 11% in the quarter.

Sales across all of its brands were strong, with the Williams-Sonoma brand seeing 30.4% comps growth.

Overall revenue increased 22.4% to $1.77 billion, and adjusted EPS of $2.56 easily beat expectations of $1.53.

“Our vision is to own the home. And, with our distinctive positioning we will only become more relevant. We have the strategies, the team and the world-class platform to maximize the industry trends that favor our business and successfully execute on our growth opportunities,” said CEO Laura Alber.

WSM Surging

Since March 23, shares of Williams-Sonoma have climbed over 200%. Estimates have been rising too, and WSM is a Zacks Rank #1 (Strong Buy) right now.

For the current fiscal year, eight analysts have revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up from $6.38 per share to $8.19 per share. Earnings are expected see double-digit growth for the current fiscal year, up nearly 70%.

WSM has seen a sales boom during the pandemic as people stuck at home looked to renovate and refurnish their living spaces. The company will only continue to benefit from the accelerated shift to online shopping as well, something it’s strived to perfect during this challenging year.

Looking ahead, WSM declined to give guidance for the current holiday quarter, but still expects annual revenue growth in the mid to high single digits.

Additionally, back in October, WSM announced that it would be raising its quarterly dividend by 10%, and the new payout is $0.53 per share. Shares currently yield 1.8% on an annual basis

If you’re an investor searching for a retail stock to add to your portfolio, make sure to keep WSM on your shortlist.

Bear of the Day:

Hawaiian Holdings is headquartered in Honolulu and is the state’s biggest airline, serving the islands for more than 85 years. The airline offers non-stop service to Hawaii from 11 gateway U.S. cities, as well as 180 daily flights between the Hawaiian Islands.

Another Big Loss in Q3

Revenue for the third quarter plunged 90% year-over-year to $76 million, with an 87% capacity decrease. Adjusted net loss came to $3.76 per share.

Both the top and bottom lines mirrored the company’s second quarter losses and missed consensus estimates.

One bright spot for HA was its cash situation. Cash burn averaged $2.6 million per say, a slowdown compared to Q2, and total liquidity was $979 million; this will certainly help the company ride out the rest of the pandemic.

Strict quarantine requirements for travelers continued to be a hindrance for the airline, and as a result, there was very little demand.

However, Hawaii recently loosened its quarantine requirement, making it easier for vacationers to travel to the state, thus benefitting the airliner. HA has seen an improvement in booking trends despite the recent resurgence in U.S. Covid-19 cases.

Bottom Line

HA is now a Zacks Rank #5 (Strong Sell).

Five analysts cut their full year earnings outlook over the past 60 days, and the consensus estimate has fallen 98 cents to a loss of $11.31 per share; earnings are expected to experience a triple-digit decline for 2020.

Shares have fallen 35% year-to-date, significantly lagging the S&P 500’s 14+% rebound during the same time frame.

The rollout of Covid-19 vaccines will help drive demand for travel to Hawaii. Management has also taken key steps to reduce expenses, preserve cash, and boost liquidity this year.

But 2021 will likely still be challenging for Hawaiian Holdings. The outlook for international travel, a very lucrative source of revenue in the past, remains murky, and the desire for luxury island vacations may be minimal if jobless claims rise.

Until the travel market looks brighter, it may be best to stay on the sidelines.

Additional content:

3 Highly Ranked Diverse Stocks to Buy Before 2021

On today’s episode of Full Court Finance at Zacks we quickly dive into what’s going on with the market, as the rollout of Pfizer’s Covid-19 vaccine begins in the U.S. The episode then explores three Zacks Rank #1 (Strong Buy) stocks that span various industries that investors might want to consider buying as we near the start of 2021.

The market got back on track to start the week of December 14 after it ran into its first slippery patch in a while last week. Stocks climbed Monday, as doses of Pfizer’s Covid-19 vaccine began being administered in the U.S., about a week after it started to rollout in the UK.

Federal officials project that roughly 100 million American will get immunized against Covid-19 by February or March, with the initial focus on people in the healthcare fields and then people in nursing homes and other long-term care facilities.

It’s vital to know just how much the vaccine news expanded the market’s rally outside of pandemic winners like Zoom, Amazon, Target and countless other tech and retail stocks. November’s rally saw over 450 stocks in the S&P 500 climb. This marked the largest share for any month since April, according to the Wall Street Journal, and blew away October’s 212 and September’s 153.

Meanwhile, Wall Street is starting to price in more fiscal stimulus. Plus, the overall earnings picture and the accommodating interest rate environment help set up broader bullish sentiment for 2021 (also read: First Look Ahead to the Q4 Earnings Season).

With all of this in mind, we take a look at three highly-ranked Zacks stocks. First up is Deere & Company, which has seen its shares leave its industry and the S&P 500 in the dust in 2020. And the farm equipment firm’s executives project increased demand in 2021.

Meanwhile, Micron stock has surged 70% since mid-August to crush its industry and the broader tech space. And the memory chip giant’s outlook appears strong within a historically cyclical space.

The episode then ends with why The Trade Desk is ready to benefit from the continued shift to digital advertising and grow even as people pay to avoid ads on platforms like Netflix.

The Hottest Tech Mega-Trend of All

Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

https://www.zacks.com

 

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.