We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
TJX Companies, Kimberly-Clark, Meritor, BorgWarner and Magna highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – August 26, 2021 – Zacks Equity Research Shares of The TJX Companies, Inc. (TJX - Free Report) as the Bull of the Day, Kimberly-Clark Corporation (KMB - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Meritor, Inc. , BorgWarner, Inc. (BWA - Free Report) and Magna International Inc. (MGA - Free Report) .
Based in Framingham, MA, The TJX Companies is a leading off-price retailer of apparel and home fashions throughout the U.S. and worldwide. It has more than 4,300 stores across the globe, which are well known for their unique value proposition of brand, fashion, price and quality. TJX’s brand portfolio includes T.J. Maxx, Marshalls, HomeGoods, HomeSense, and Winners.
Q2 Earnings Recap
TJX delivered another strong quarter, with sales and earnings surging well above pre-pandemic levels for the second quarter of fiscal 2022.
Total sales grew 81% year-over-year, hitting $12.1 billion. Earnings rose about 27% to $0.79 per share, easily beating the Street consensus of $0.57 per share.
“Open-only” comparable store sales, which exclude sales that were temporarily closed, spiked 20% compared to the same period two years earlier, and all four of its business segments generated double-digit comps growth. HomeGoods led the gains with a 36% increase.
Excitingly for TJX, the impact of store closures faded even further in Q2; its stores were shut down for an average of 3% of last period compared to 14% in the first quarter.
"Our exciting and eclectic mix of merchandise, great brands and values continued to draw customers into our stores around the world,” said CEO Ernie Herman. Herman also commented that the “performance of our home business across all of our divisions continued to be phenomenal.”
Investors cheered these results, pushing the stock up 6% to a new all-time high after the report was released.
Could TJX Break Out?
Over the past one year, shares of TJX have increased almost 42% compared to the S&P 500’s gain of 31%. Earnings estimates have climbed as well, making the retailer 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 $2.61 per share to $2.94 per share. Earnings are expected to see triple-digit growth of almost 850% for fiscal 2022, with 2023 continuing the positive earnings growth trend.
Even though management did not provide guidance for the third quarter or full year, they reiterated their bullish long-term outlook that sees TJX reaching $60 billion in annual sales. The company also announced plans to increase share buybacks to a range of $1.25 billion to $1.5 billion for the year, which will help boost its already bountiful cash balance.
If you’re an investor searching for a retail stock to add to your portfolio, make sure to keep TJX on your shortlist.
Founded in 1928, Kimberly-Clark is a well-known global consumer products manufacturer. Its brand portfolio includes Huggies, Pull-Ups, Kleenex, Scott, and Cottonelle.
Q2 Earnings Weaker-Than-Expected
Even though slowing growth was expected this year, Kimberly Clark’s Q2 performance showed a slowdown more intense than management had foreseen.
Organic sales fell 3%, and sales volumes were down 4%. Prices increased only 1%.
Gross profit slumped 17% year-over-year, while net income declined 45% compared to Q2 2020. Cash flow was also down sharply, though KMB’s balance sheet has improved compared to 2019.
"Our second quarter reflects continued pandemic-driven volatility," CEO Mike Hsu said in a press release. "We are facing significantly higher input costs and a reversal in consumer tissue volumes from record growth in the year ago period."
Bottom Line
KMB is now a Zacks Rank #5 (Strong Sell).
Five analysts have cut their full year earnings outlook over the past 60 days, and the consensus estimate has fallen 68 cents to $6.73 per share. Wall Street has lowered its earnings picture for 2022 as well, but the bottom line is still expected to post year-over-year growth.
Shares have struggled to gain traction so far in 2021. Year-to-date, KMB is down 13.7% compared to the S&P 500’s gain of 31%.
Looking ahead, Kimberly Clark cut its outlook across the board, reflecting 2021’s tough selling environment.
Sales are now expected to fall about 1% for the fiscal year compared to the prior outlook of less than 1% growth. The company’s bottom line will also take a hit as the consumer staples giant tries to balance price hikes against decreasing sales volumes.
The short-term picture for KMB looks pretty gloomy as it tries to find its footing in this stage of the coronavirus pandemic. But for investors, any price pain will be healed by KMB’s juicy dividend, which sports a yield of 3.4%.
Additional content:
Tapping the EV Era with These 3 Autoparts Retailers
Electric vehicles (EV) have been around way longer than we can imagine, from as early as the 19th century. Interestingly, some of the first cars ever made were electric, with automakers actively exploring options for alternative fuel vehicles, including EVs.
Blame it on politics, or little advancement in technology, or cheap and abundant gasoline -- the internal combustion engine won the battle. Fast-forward 100 years, and the tables have turned. EVs are the future of the automobile industry and electrification of a vehicle is now inevitable.
Advancement in technologies, stricter emissions and fuel-economy targets as well as increasing commercial viability of EVs — both in terms of affordability and charging infrastructure — are boosting the e-mobility market. According to IHS Markit, there were nearly 2.5 million EVs sold in 2020 globally and sales are likely to soar 70% in 2021.
EVs are expected to witness a CAGR of 53% through 2025, representing 12.2 million annual EVs. No one wants to be left behind during this massive growth narrative. While majors like Tesla and Ford are obvious bets to capitalize on the booming EV market, it would also be prudent to park your capital in a few auto parts suppliers who are actively electrifying their portfolio and are set to benefit from the EV revolution, no matter which automakers emerge as winners.
Below we have highlighted three auto parts suppliers and equipment providers that are set to thrive on the EV transition. The companies are focused on innovation and technology development, and expect that hybrid and electric technologies will bolster their top line, going forward. Ensure that you retain these stocks in your portfolio to reap handsome long-term rewards
Meritor: Meritor is actively engaged in medium-duty electrification programs. It is constantly securing new business wins, which are driving electrification revenues. Contracts with Lion Electric, Volta Trucks, Hexagon Purus and Autocar for the supply of electric powertrain augur ample growth visibility.
We like the recent five-year agreement with Hyliion to provide electric subsystems for its Hypertruck ERX. The company is also working with Hino, which will be evaluating and testing Meritor’s e-powertrain for its development path to zero-emission vehicles. Additionally, investment in SEA Electric gives Meritor an opportunity to apply its expertise in electrification solutions for the medium-duty market.
The company currently carries a Zacks Rank #2 (Buy) and has a Value Score of A. The Zacks Consensus Estimate for fiscal 2021 earnings and sales implies year-over-year growth of 118.7% and 28.1%, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BorgWarner: BorgWarner is likely to benefit from accelerating vehicle electrification, and expects hybrid and electric technologies to be major revenue drivers. From 2022 through 2024, net new backlog is expected to be at least $2.8 billion, with around 45% of the backlog driven by e-products.
The company’s new project Charging Forward is expected to deliver more than 25% of revenues from EVs by 2025 and 45% by 2030. Also, the acquisition of AKASOL, completed in June, is set to expand BorgWarner’s commercial vehicle electrification capabilities.
AKASOL is expected to add $75 million in BorgWarner’s second-half revenues. BorgWarner currently carries a Zacks Rank #3 (Hold) and has a VGM Score of A. The Zacks Consensus Estimate for 2021 earnings and sales implies year-over-year growth of 53% and 52%, respectively.
Magna International: Magna’s deepened focus on enhancing its portfolio of e-powertrain products offers ample growth visibility. The joint venture with LG Electronics will help Magna expand electric powertrain offerings by capitalizing on the existing engineering expertise and technological capabilities.
Magna’s powertrain electrification capabilities with the new eBeam technology would aid it in electrifying pickup trucks without compromising on functionality and capability. The firm’s strategic collaboration with Israeli startup REE Automotive to jointly manufacture and assemble modular EVs is also set to bolster prospects.
The auto supplier’s investments in self-driving firm Waymo and electric vehicle maker Fisker showcase its commitment to meet future mobility needs. Magna currently carries a Zacks Rank #3 and has a VGM Score of B. The Zacks Consensus Estimate for 2021 earnings and sales implies year-over-year growth of 83% and 21%, respectively.
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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
TJX Companies, Kimberly-Clark, Meritor, BorgWarner and Magna highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – August 26, 2021 – Zacks Equity Research Shares of The TJX Companies, Inc. (TJX - Free Report) as the Bull of the Day, Kimberly-Clark Corporation (KMB - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Meritor, Inc. , BorgWarner, Inc. (BWA - Free Report) and Magna International Inc. (MGA - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Based in Framingham, MA, The TJX Companies is a leading off-price retailer of apparel and home fashions throughout the U.S. and worldwide. It has more than 4,300 stores across the globe, which are well known for their unique value proposition of brand, fashion, price and quality. TJX’s brand portfolio includes T.J. Maxx, Marshalls, HomeGoods, HomeSense, and Winners.
Q2 Earnings Recap
TJX delivered another strong quarter, with sales and earnings surging well above pre-pandemic levels for the second quarter of fiscal 2022.
Total sales grew 81% year-over-year, hitting $12.1 billion. Earnings rose about 27% to $0.79 per share, easily beating the Street consensus of $0.57 per share.
“Open-only” comparable store sales, which exclude sales that were temporarily closed, spiked 20% compared to the same period two years earlier, and all four of its business segments generated double-digit comps growth. HomeGoods led the gains with a 36% increase.
Excitingly for TJX, the impact of store closures faded even further in Q2; its stores were shut down for an average of 3% of last period compared to 14% in the first quarter.
"Our exciting and eclectic mix of merchandise, great brands and values continued to draw customers into our stores around the world,” said CEO Ernie Herman. Herman also commented that the “performance of our home business across all of our divisions continued to be phenomenal.”
Investors cheered these results, pushing the stock up 6% to a new all-time high after the report was released.
Could TJX Break Out?
Over the past one year, shares of TJX have increased almost 42% compared to the S&P 500’s gain of 31%. Earnings estimates have climbed as well, making the retailer 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 $2.61 per share to $2.94 per share. Earnings are expected to see triple-digit growth of almost 850% for fiscal 2022, with 2023 continuing the positive earnings growth trend.
Even though management did not provide guidance for the third quarter or full year, they reiterated their bullish long-term outlook that sees TJX reaching $60 billion in annual sales. The company also announced plans to increase share buybacks to a range of $1.25 billion to $1.5 billion for the year, which will help boost its already bountiful cash balance.
If you’re an investor searching for a retail stock to add to your portfolio, make sure to keep TJX on your shortlist.
Bear of the Day:
Founded in 1928, Kimberly-Clark is a well-known global consumer products manufacturer. Its brand portfolio includes Huggies, Pull-Ups, Kleenex, Scott, and Cottonelle.
Q2 Earnings Weaker-Than-Expected
Even though slowing growth was expected this year, Kimberly Clark’s Q2 performance showed a slowdown more intense than management had foreseen.
Organic sales fell 3%, and sales volumes were down 4%. Prices increased only 1%.
Gross profit slumped 17% year-over-year, while net income declined 45% compared to Q2 2020. Cash flow was also down sharply, though KMB’s balance sheet has improved compared to 2019.
"Our second quarter reflects continued pandemic-driven volatility," CEO Mike Hsu said in a press release. "We are facing significantly higher input costs and a reversal in consumer tissue volumes from record growth in the year ago period."
Bottom Line
KMB is now a Zacks Rank #5 (Strong Sell).
Five analysts have cut their full year earnings outlook over the past 60 days, and the consensus estimate has fallen 68 cents to $6.73 per share. Wall Street has lowered its earnings picture for 2022 as well, but the bottom line is still expected to post year-over-year growth.
Shares have struggled to gain traction so far in 2021. Year-to-date, KMB is down 13.7% compared to the S&P 500’s gain of 31%.
Looking ahead, Kimberly Clark cut its outlook across the board, reflecting 2021’s tough selling environment.
Sales are now expected to fall about 1% for the fiscal year compared to the prior outlook of less than 1% growth. The company’s bottom line will also take a hit as the consumer staples giant tries to balance price hikes against decreasing sales volumes.
The short-term picture for KMB looks pretty gloomy as it tries to find its footing in this stage of the coronavirus pandemic. But for investors, any price pain will be healed by KMB’s juicy dividend, which sports a yield of 3.4%.
Additional content:
Tapping the EV Era with These 3 Autoparts Retailers
Electric vehicles (EV) have been around way longer than we can imagine, from as early as the 19th century. Interestingly, some of the first cars ever made were electric, with automakers actively exploring options for alternative fuel vehicles, including EVs.
Blame it on politics, or little advancement in technology, or cheap and abundant gasoline -- the internal combustion engine won the battle. Fast-forward 100 years, and the tables have turned. EVs are the future of the automobile industry and electrification of a vehicle is now inevitable.
Advancement in technologies, stricter emissions and fuel-economy targets as well as increasing commercial viability of EVs — both in terms of affordability and charging infrastructure — are boosting the e-mobility market. According to IHS Markit, there were nearly 2.5 million EVs sold in 2020 globally and sales are likely to soar 70% in 2021.
EVs are expected to witness a CAGR of 53% through 2025, representing 12.2 million annual EVs. No one wants to be left behind during this massive growth narrative. While majors like Tesla and Ford are obvious bets to capitalize on the booming EV market, it would also be prudent to park your capital in a few auto parts suppliers who are actively electrifying their portfolio and are set to benefit from the EV revolution, no matter which automakers emerge as winners.
Below we have highlighted three auto parts suppliers and equipment providers that are set to thrive on the EV transition. The companies are focused on innovation and technology development, and expect that hybrid and electric technologies will bolster their top line, going forward. Ensure that you retain these stocks in your portfolio to reap handsome long-term rewards
Meritor: Meritor is actively engaged in medium-duty electrification programs. It is constantly securing new business wins, which are driving electrification revenues. Contracts with Lion Electric, Volta Trucks, Hexagon Purus and Autocar for the supply of electric powertrain augur ample growth visibility.
We like the recent five-year agreement with Hyliion to provide electric subsystems for its Hypertruck ERX. The company is also working with Hino, which will be evaluating and testing Meritor’s e-powertrain for its development path to zero-emission vehicles. Additionally, investment in SEA Electric gives Meritor an opportunity to apply its expertise in electrification solutions for the medium-duty market.
The company currently carries a Zacks Rank #2 (Buy) and has a Value Score of A. The Zacks Consensus Estimate for fiscal 2021 earnings and sales implies year-over-year growth of 118.7% and 28.1%, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BorgWarner: BorgWarner is likely to benefit from accelerating vehicle electrification, and expects hybrid and electric technologies to be major revenue drivers. From 2022 through 2024, net new backlog is expected to be at least $2.8 billion, with around 45% of the backlog driven by e-products.
The company’s new project Charging Forward is expected to deliver more than 25% of revenues from EVs by 2025 and 45% by 2030. Also, the acquisition of AKASOL, completed in June, is set to expand BorgWarner’s commercial vehicle electrification capabilities.
AKASOL is expected to add $75 million in BorgWarner’s second-half revenues. BorgWarner currently carries a Zacks Rank #3 (Hold) and has a VGM Score of A. The Zacks Consensus Estimate for 2021 earnings and sales implies year-over-year growth of 53% and 52%, respectively.
Magna International: Magna’s deepened focus on enhancing its portfolio of e-powertrain products offers ample growth visibility. The joint venture with LG Electronics will help Magna expand electric powertrain offerings by capitalizing on the existing engineering expertise and technological capabilities.
Magna’s powertrain electrification capabilities with the new eBeam technology would aid it in electrifying pickup trucks without compromising on functionality and capability. The firm’s strategic collaboration with Israeli startup REE Automotive to jointly manufacture and assemble modular EVs is also set to bolster prospects.
The auto supplier’s investments in self-driving firm Waymo and electric vehicle maker Fisker showcase its commitment to meet future mobility needs. Magna currently carries a Zacks Rank #3 and has a VGM Score of B. The Zacks Consensus Estimate for 2021 earnings and sales implies year-over-year growth of 83% and 21%, respectively.
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.