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Winnebago Industries, The TJX Companies, Google and Facebook highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – April 8, 2021 – Zacks Equity Research Shares of Winnebago Industries, Inc. (WGO - Free Report) as the Bull of the Day, The TJX Companies, Inc. (TJX - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Alphabet Inc. (GOOGL - Free Report) and Facebook, Inc. .
Winnebago Industries is a leading maker of RVs in the United States, and distributes its products all throughout the country and Canada through independent dealers. The company has been manufacturing RVs for around 60 years, primarily at its facilities in Iowa and Indiana.
Q2 Earnings Recap
The RV industry is booming right now, and WGO is reaping the rewards.
Sales for the second quarter spiked 34% to $840 million, marking the second straight quarter of revenue acceleration.
All of its main segments witnessed impressive growth as well. WGO's towable division grew 55% year-over-year, while motorhome sales were up 18%. Both divisions are still benefiting from high demand for RV products across the board.
Q2 was also another very profitable period. Gross margin expanded 590 basis points to 18.6%, and adjusted EPS came in at a record $2.12 per share, up 216% compared to the prior year period.
And despite winter season challenges like increasing manufacturing volume and supple chain bottlenecks, Winnebago was still able to improve net income to 12% of sales.
"I am especially excited and extremely grateful for our team's ability to deliver strong profitability in the midst of a very dynamic environment," CEO Michael Happe said.
WGO Breaks Out
In the past six months, shares of WGO have jumped over 44% compared to the S&P 500's 21.1% increase. Earnings estimates have been rising too, and WGO is a Zacks Rank #1 (Strong Buy) right now.
For fiscal 2021, six analysts have revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up $1.32 to $7.24 per share. Earnings are expected to grow over 180% compared to the prior year period. Fiscal 2022 looks strong too, and earnings should see positive year-over-year growth as well.
Looking ahead, management is not anticipating any "significant" decline in retail momentum and outdoor product demand, and the team believes that the interest in the RV niche will stick around long after the threat of Covid-19 disappears.
Winnebago now accounts for 11.5% of the RV industry, up from 10.6% a year ago, and with growing market share and a large product portfolio, the company has all the right factors in place to keep growing its top and bottom lines.
If you're an investor searching for a specialty automotive stock to add to your portfolio, make sure to keep WGO on your shortlist.
Based in Framingham, MA, The TJX Companies is a leading off-price retailer of apparel and home goods, with more than 4,300 stores across the globe; the company has been able to distinguish itself from traditional retailers on the grounds of opportunistic buying strategies and a flexible business model. Here in the U.S., it operates under the banners T.J. Maxx, Marshall's and HomeGoods.
Q4 Earnings Recap
The coronavirus pandemic was still a major obstacle for TJX in the fourth quarter. Some of the company's stores were closed for 13% of the period, while closures in Europe and Canada resulted in about $950 million to $1 billion in lost sales.
Earnings were $0.27 per share for Q4, but would have been 18 to 21 cents higher if the stores hadn't been closed.
As for revenue, the company's comparable sales only declined 3% year-over-year compared to a 5% decline in the previous quarter, which is a promising trend. CEO Ernie Herman said that sales improved each month in the fourth quarter.
One bright spot is that TJX is continuing to see strong sales trends in its home and beauty departments, and HomeGoods once again posted a double-digit increase.
Bottom Line
TJX is now a Zacks Rank #5 (Strong Sell).
11 analysts have cut their full year earnings outlook over the past 60 days, and the consensus estimate has fallen 31 cents to $2.33 per share; earnings are expected to grow considerably year-over-year, but it looks like bottom-line growth will slow down next fiscal year.
Shares are up almost 20% in the past six-month period, falling just behind S&P 500's gain of 21.1%.
Looking ahead, TJX still expects some stores to remain shuttered for 11% of the fiscal 2022 first quarter.
But there are two things working in the retailer's favor right now. First, TJX has been taking advantage of new inventory as other retailers were forced to close permanently or are scaling down their business. Second, it hopes to move into new target markets and relocate certain stores to more promising locations.
It also boasts $10 billion in cash at the moment, its highest level ever.
But, the pandemic will likely continue to hurt TJX's sales for a while longer, and it may be best to wait on the sidelines until it passes.
Additional content:
Major Indexes Flat as a Pancake
We saw some fluctuation among the Dow, Nasdaq and S&P 500 in Hump Day trading, climbing notably in the morning hours, only to lag most of the rest of the day. At the close, these three indexes were about as flat as you could expect: Dow +0.05%, Nasdaq -0.07% and the S&P +0.15%. Only the small-cap Russell 2000, which outperformed its larger-index brethren through Q1, came in at -1.6% on the day.
Statements from a few important groups made their way through market discourse Wednesday, with the minutes from the Federal Open Market Committee (FOMC) released from its March meeting made public. As always, the committee cited its dual mandate — full employment and a targeted inflation rate of 2% — and said it would not be making any changes to current policy until these desired outcomes are reached.
Currently, though the labor market has created more than 1.6 million new jobs over the past three months total and the 10-year bond rate had nearly doubled from its sub-1% levels, the FOMC is awaiting manifestations of the booming economy to hit the economic metrics before they stop the $120 billion in monthly bond purchases or raising interest rates from near-zero. At this point, the U.S. labor market is still down 9 million jobs from February 2020, and the 10-year has now lagged at around 1.67%.
The International Monetary Fund (IMF) has announced it will boost its reserves $650 billion and put a freeze on debt servicing, in its pursuit of assisting with pandemic hurdles in much of the world. The IMF also turns its attention to climate change initiatives, which had softened considerably during the Trump years. The global growth forecast for 2021 is 6%, according to the IMF, indicating a recessionary environment in many places while the U.S. GDP is expected to reach 6.5% for the year.
In a statement released today from the G20 summit, discussed was the idea that U.S. Treasury Secretary Janet Yellen openly discussed earlier in the week: a minimum corporate tax rate, particularly for giant global corporations such as Alphabet and Facebook. The G20 expects to have a deal ready by its summer meeting this July. Elsewhere, Mexico and Argentina lobbied for relief from economic hardships due to the prolonged pandemic, but Italian leadership did not move toward an immediate solution.
Thursday brings Fed Chair Jay Powell's commentary on the global economy, in which it is expected he will discuss many of these same concerns as the IMF and G20. We also see new weekly jobless claims figures for last week and the previous week. Two weeks ago, new claims had hit a pandemic-era low beneath 700K, but surged back to 719K in last week's headline. Continuing Claims kept its mostly orderly decline intact, which is partially due to longer-term unemployed absorbed into the PUA program.
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.
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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Winnebago Industries, The TJX Companies, Google and Facebook highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – April 8, 2021 – Zacks Equity Research Shares of Winnebago Industries, Inc. (WGO - Free Report) as the Bull of the Day, The TJX Companies, Inc. (TJX - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Alphabet Inc. (GOOGL - Free Report) and Facebook, Inc. .
Here is a synopsis of all four stocks:
Bull of the Day:
Winnebago Industries is a leading maker of RVs in the United States, and distributes its products all throughout the country and Canada through independent dealers. The company has been manufacturing RVs for around 60 years, primarily at its facilities in Iowa and Indiana.
Q2 Earnings Recap
The RV industry is booming right now, and WGO is reaping the rewards.
Sales for the second quarter spiked 34% to $840 million, marking the second straight quarter of revenue acceleration.
All of its main segments witnessed impressive growth as well. WGO's towable division grew 55% year-over-year, while motorhome sales were up 18%. Both divisions are still benefiting from high demand for RV products across the board.
Q2 was also another very profitable period. Gross margin expanded 590 basis points to 18.6%, and adjusted EPS came in at a record $2.12 per share, up 216% compared to the prior year period.
And despite winter season challenges like increasing manufacturing volume and supple chain bottlenecks, Winnebago was still able to improve net income to 12% of sales.
"I am especially excited and extremely grateful for our team's ability to deliver strong profitability in the midst of a very dynamic environment," CEO Michael Happe said.
WGO Breaks Out
In the past six months, shares of WGO have jumped over 44% compared to the S&P 500's 21.1% increase. Earnings estimates have been rising too, and WGO is a Zacks Rank #1 (Strong Buy) right now.
For fiscal 2021, six analysts have revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up $1.32 to $7.24 per share. Earnings are expected to grow over 180% compared to the prior year period. Fiscal 2022 looks strong too, and earnings should see positive year-over-year growth as well.
Looking ahead, management is not anticipating any "significant" decline in retail momentum and outdoor product demand, and the team believes that the interest in the RV niche will stick around long after the threat of Covid-19 disappears.
Winnebago now accounts for 11.5% of the RV industry, up from 10.6% a year ago, and with growing market share and a large product portfolio, the company has all the right factors in place to keep growing its top and bottom lines.
If you're an investor searching for a specialty automotive stock to add to your portfolio, make sure to keep WGO on your shortlist.
Bear of the Day:
Based in Framingham, MA, The TJX Companies is a leading off-price retailer of apparel and home goods, with more than 4,300 stores across the globe; the company has been able to distinguish itself from traditional retailers on the grounds of opportunistic buying strategies and a flexible business model. Here in the U.S., it operates under the banners T.J. Maxx, Marshall's and HomeGoods.
Q4 Earnings Recap
The coronavirus pandemic was still a major obstacle for TJX in the fourth quarter. Some of the company's stores were closed for 13% of the period, while closures in Europe and Canada resulted in about $950 million to $1 billion in lost sales.
Earnings were $0.27 per share for Q4, but would have been 18 to 21 cents higher if the stores hadn't been closed.
As for revenue, the company's comparable sales only declined 3% year-over-year compared to a 5% decline in the previous quarter, which is a promising trend. CEO Ernie Herman said that sales improved each month in the fourth quarter.
One bright spot is that TJX is continuing to see strong sales trends in its home and beauty departments, and HomeGoods once again posted a double-digit increase.
Bottom Line
TJX is now a Zacks Rank #5 (Strong Sell).
11 analysts have cut their full year earnings outlook over the past 60 days, and the consensus estimate has fallen 31 cents to $2.33 per share; earnings are expected to grow considerably year-over-year, but it looks like bottom-line growth will slow down next fiscal year.
Shares are up almost 20% in the past six-month period, falling just behind S&P 500's gain of 21.1%.
Looking ahead, TJX still expects some stores to remain shuttered for 11% of the fiscal 2022 first quarter.
But there are two things working in the retailer's favor right now. First, TJX has been taking advantage of new inventory as other retailers were forced to close permanently or are scaling down their business. Second, it hopes to move into new target markets and relocate certain stores to more promising locations.
It also boasts $10 billion in cash at the moment, its highest level ever.
But, the pandemic will likely continue to hurt TJX's sales for a while longer, and it may be best to wait on the sidelines until it passes.
Additional content:
Major Indexes Flat as a Pancake
We saw some fluctuation among the Dow, Nasdaq and S&P 500 in Hump Day trading, climbing notably in the morning hours, only to lag most of the rest of the day. At the close, these three indexes were about as flat as you could expect: Dow +0.05%, Nasdaq -0.07% and the S&P +0.15%. Only the small-cap Russell 2000, which outperformed its larger-index brethren through Q1, came in at -1.6% on the day.
Statements from a few important groups made their way through market discourse Wednesday, with the minutes from the Federal Open Market Committee (FOMC) released from its March meeting made public. As always, the committee cited its dual mandate — full employment and a targeted inflation rate of 2% — and said it would not be making any changes to current policy until these desired outcomes are reached.
Currently, though the labor market has created more than 1.6 million new jobs over the past three months total and the 10-year bond rate had nearly doubled from its sub-1% levels, the FOMC is awaiting manifestations of the booming economy to hit the economic metrics before they stop the $120 billion in monthly bond purchases or raising interest rates from near-zero. At this point, the U.S. labor market is still down 9 million jobs from February 2020, and the 10-year has now lagged at around 1.67%.
The International Monetary Fund (IMF) has announced it will boost its reserves $650 billion and put a freeze on debt servicing, in its pursuit of assisting with pandemic hurdles in much of the world. The IMF also turns its attention to climate change initiatives, which had softened considerably during the Trump years. The global growth forecast for 2021 is 6%, according to the IMF, indicating a recessionary environment in many places while the U.S. GDP is expected to reach 6.5% for the year.
In a statement released today from the G20 summit, discussed was the idea that U.S. Treasury Secretary Janet Yellen openly discussed earlier in the week: a minimum corporate tax rate, particularly for giant global corporations such as Alphabet and Facebook. The G20 expects to have a deal ready by its summer meeting this July. Elsewhere, Mexico and Argentina lobbied for relief from economic hardships due to the prolonged pandemic, but Italian leadership did not move toward an immediate solution.
Thursday brings Fed Chair Jay Powell's commentary on the global economy, in which it is expected he will discuss many of these same concerns as the IMF and G20. We also see new weekly jobless claims figures for last week and the previous week. Two weeks ago, new claims had hit a pandemic-era low beneath 700K, but surged back to 719K in last week's headline. Continuing Claims kept its mostly orderly decline intact, which is partially due to longer-term unemployed absorbed into the PUA program.
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 >>
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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.