For Immediate Release
Chicago, IL – February 26, 2021 – Zacks Equity Research Shares of Winnebago Industries, Inc. (
WGO Quick Quote WGO - Free Report) as the Bull of the Day, Cracker Barrel Old Country Store, Inc. ( CBRL Quick Quote CBRL - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Tempur Sealy International, Inc. ( TPX Quick Quote TPX - Free Report) , The Estee Lauder Companies Inc. ( EL Quick Quote EL - Free Report) and Qorvo, Inc. ( QRVO Quick Quote QRVO - Free Report) . Here is a synopsis of all five stocks:
There was certainly a knee-jerk reaction post-COVID that sent money away from airlines and hotels, towards more isolated recreational activities. There was a huge boom for companies selling things like RVs, boats and cars. This trend has continued on in the last several months. Investors are now beginning to see this could be one of the best areas of the market to invest in over the intermediate term.
One of these stocks is today's Bull of the Day,
Winnebago Industries. Winnebago Industries, Inc. manufactures and sells recreation vehicles and marine products primarily for use in leisure travel and outdoor recreation activities. The company operates in six segments: Grand Design Towables, Winnebago Towables, Winnebago Motorhomes, Newmar motorhomes, Chris-Craft Marine, and Winnebago Specialty Vehicles. It provides towable products that are non-motorized vehicles to be towed by automobiles, pickup trucks, SUVs, or vans for use as temporary living quarters for recreational travel, such as conventional travel trailers, fifth wheels, folding camper trailers, and truck campers under the Winnebago and Grand Design brand names.
This Zacks Rank #1 (Strong Buy) is in the Building Products – Mobile Homes and RV Builders industry which ranks in the Top 1% of our Zacks Industry Rank. In addition to the Zacks Rank, the stock enjoys a Value Style Score of C, Growth Style Score of A, Momentum Style Score of B and a VGM Composite Score of A.
The main reason for the favorable rank is the series of earnings estimate revisions coming from analysts. Over the last sixty days, two analysts have increased their earnings estimates for the current year and next year. The Zacks Consensus Estimate has pushed up from $4.57 to $5.94 for the current year while next year's number is up from $4.95 to $6.22. That current year EPS represents growth of 130.23% for the current year on sales growth of 36.63%. Next year, earnings growth is slated to slow to 4.74% while sales are expected to come in up 3.13%.
The COVID-related shutdowns have been exceptionally rough on restaurants. Now, add the wrinkle of a restaurant that's typically frequented by travelers, and you've got a recipe for disaster. Today's Bear of the Day happens to be at that unfortunate intersection. If you're on the hunt for value stocks of the future, this could be on your long-term radar. For now, the analysts are still very bearish.
Today's Bear of the Day is
Cracker Barrel. Cracker Barrel Old Country Store, Inc. develops and operates the Cracker Barrel Old Country Store concept in the United States. Its Cracker Barrel stores consist of a restaurant with a gift shop. The company's restaurants serve breakfast, lunch, and dinner. Its gift shops offer various decorative and functional items, such as rocking chairs, seasonal gifts, apparel, toys, cookware, and various other gift items, as well as various candies, preserves, and other food items. As of September 16, 2020, the company operated 663 Cracker Barrel stores in 45 states.
Currently, Cracker Barrel is a Zacks Rank #5 (Strong Sell) in the Retail – Restaurants industry which ranks in the Bottom 4% of our Zacks Industry Rank. In addition to the unfavorable rank, CBRL has a Zacks Value Style Score of C, Growth of D, Momentum of C, and a VGM Composite Score of D. Over the last ninety days, analysts have been cutting their estimates for the current year. The Zacks Consensus Estimate has come down from $5.16 to $4.39 for the current year. That's the reason for the Zacks Rank #5 (Strong Sell). The good news for long-term investors is that next year's Zacks Consensus Estimate is up at $8.35. That represents growth of 90.28%.
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When you really think about it, Tempur Sealy may be the ultimate 'stay home' stock, whether there's a pandemic or not. Other than vacations and work meetings, we do most of our sleeping at home. And that's not going to change when things return to normal.
What does change, though, is the technology that TPX puts into their mattresses. As if controlling the temperature and support level wasn't enough, now they're working on fixing your snoring! Could a "good dreams" function be far off?
And all of this comfort and technology is being delivered through an omni-channel strategy that includes company-owned stores, e-commerce and third-party retailers. Yet another way this company was better prepared than most for the unprecedented challenges of the past year.
About two weeks ago, TPX reported its eighth straight positive surprise. Adjusted fourth-quarter earnings of 67 cents beat the Zacks Consensus Estimate by nearly 29%. The result nearly doubled the year-ago total of 34 cents.
Revenue of $1.06 billion topped the Zacks Consensus Estimate by more than 7% and improved over 21% from the previous year. Unsurprisingly, U.S. web sales doubled.
TPX is expecting a solid 2021 with sales growth of between 15% and 20%, which puts earnings somewhere between $2.30 and $2.50. Analyst expectations were not that high at the time, so we saw a healthy rise in revisions.
We're now expecting earnings of $2.44 for 2021, which has grown more than 22% from 30 days ago. Likewise, expectations for 2022 jumped 27.5% in that time to $2.69. These upward revisions underscore TPX's status as a Zacks Rank #1 (Strong Buy).
Furthermore, TPX is part of the retail- home furnishings space, which is in the top 2% of the Zacks Industry Rank. Shares have climbed approximately 27% in 2021 so far and more than 58% over the past year.
A once-in-a-lifetime pandemic that forces people to barricade themselves from the public is no reason to stop looking fabulous. That's why The Estee Lauder reported a strong fiscal second-quarter earlier this month and is up nearly 50% over the past year.
This beauty products staple has several product divisions, including skin care (51.6% of fiscal 2020 sales), makeup (33.5%), fragrances (10.9%), hair care and other. Its products are sold through department stores, mass retailers, company-owned retail stores, hair salons and online. As part of the Cosmetics space, EL is in the Top 23% of the Zacks Industry Rank.
EL initiated some robust cost-control measures and improved its online shopping experience to combat the pandemic's toll at its stores. The moves worked well as the company beat on both the top and bottom lines in its recent quarterly report.
Earnings per share of $2.61 improved 24% year over year and slaughtered the Zacks Consensus Estimate by more than 56%. Net sales of $4.85 billion improved 5% year over year and surpassed our expectations of under $4.5 billion.
Its skin care portfolio was the big star of the quarter, as the Estee Lauder, La Mer and Clinique brands all enjoyed significant growth. In fact, the first two brands each saw double-digit growth. The company is quite popular with emerging markets, as seen by the 35% jump in sales for the Asia/Pacific region.
EL is feeling pretty good about the future, as it has a solid lineup of product offerings and an "enriched" online experience on which to sell them. Analysts are encouraged about the future as well.
The Zacks Consensus Estimate for this fiscal year (ending June 2021) has jumped 13.7% in the past 30 days to $5.95. Expectations for next fiscal year (ending June 2022) are up 9% in that time to $6.90. Therefore, analysts currently see year-over-year earnings growth of nearly 16%.
Talk about being in the right places at the right time! Or in the case of Qorvo, it might be more appropriate to say the "hottest" places. This provider of RF solutions reported strong quarterly results earlier this month as it helps to deploy 5G, roll-out Wi-Fi 6 and 6E, and use other emerging technologies to "keep the world connected".
There's no wonder that QRVO jumped more than 80% in the past year and has beaten the Zacks Consensus Estimate for 17 straight quarters now. And it helps that the Semiconductors – radio frequency space is in the top 18% of the Zacks Industry Rank.
The company went public in 2015 after RF Micro Devices and TriQuint Semiconductor merged. Its two reportable segments are Mobile Products (65.7% of fiscal 2020 revenues) and Infrastructure & Defense Products (34.3%).
In early February, QRVO reported fiscal third-quarter earnings per share of $3.08, which improved more than 65% from last year and beat the Zacks Consensus Estimate by more than 15%. The result also brought the four-quarter average surprise to nearly 20.2%. Meanwhile, revenue of nearly $1.1 billion topped our expectations by 2% and also improved on a year-over-year basis.
QRVO offered a solid outlook for its fiscal fourth quarter, including earnings per share of $2.42 and revenue somewhere between $1.025 billion and $1.055 billion. These forecasts were higher than expectations at $2.11 and approximately $966 million, so analysts have been revising their estimates higher.
The Zacks Consensus Estimate for this fiscal year (ending March 2021) is up 9% in the past 30 days to $9.45. Expectations for next fiscal year (ending March 2022) have advanced 4% in that time to $10.64. Therefore, analysts currently see earnings growth of 12.6% for next year.
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