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Kohl's, XPO Logistics, Chevron, McDonald's and Coca-Cola highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – September 8, 2021 – Zacks Equity Research Shares of Kohl's Corporation (KSS - Free Report) as the Bull of the Day, XPO Logistics Inc. (XPO - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Chevron Corporation (CVX - Free Report) , McDonald's Corporation (MCD - Free Report) and The Coca-Cola Company (KO - Free Report) .
Headquartered in Menomonee Falls, WI, Kohl's Corp. is the number two department store chain in the U.S. Its stores offer moderately-priced apparel, footwear, and accessories for women, men and kids; beauty items; and home décor. Kohl's currently operates over 1,100 stores across 49 states, as well as kohls.com and the Kohl's smartphone app.
Q2 Earnings Recap
Total revenue hit $4.45 billion, with net sales of $4.22 billion, growing over 30% year-over-year; the company's top line also surpassed revenue and sales for Q2 2019.
Gross margin surged 42.5% compared to 33.1% in the prior-year period and 38.3% in the second quarter of 2019 thanks to Kohl's ability to cut back on promotions as inventory remains low.
As a result, earnings showed impressive growth. The bottom line hit a record of $2.48 per share, or over twice the analyst consensus of $1.16. This, in turn, allowed the department store to generate a hefty $1.25 billion of free cash flow last quarter.
Kohl's also repurchased $255 million of stock in Q2.
Because of its blowout second quarter, management raised its full-year outlook for the second time and now expects to generate adjusted EPS between $5.80 and $6.10 per share (vs. its previous forecast of $3.80 and $4.20 per share), which would be another record.
Could KSS Break Out?
Over the past one year, shares of KSS have risen over 147% compared to the S&P 500's gain of 31.9%. 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 $4.04 per share to $6.09 per share. Earnings are expected to see triple-digit growth of more than 600% for fiscal 2022, with 2023 continuing the positive earnings growth trend.
Considering Kohl's latest guidance, share trade at a bargain level of about 9.2X forward earnings, especially given its very strong balance sheet and growth outlook.
Additionally, the company just began the rollout of its partnership with beauty behemoth Sephora, a promising partnership that should boost its top line over the next few years. Kohl's has also added popular brands like Eddie Bauer and Tommy Hilfiger to its product mix.
If you're an investor searching for a retail stock to add to your portfolio, make sure to keep KSS on your shortlist.
Based in Greenwich, CT, XPO Logistics is a third-party logistics provider offering fast, single-source solutions for time-critical and service-sensitive shipments through its non-asset-based transportation network. XPO serves customers in the U.S., Canada, and Mexico with domestic and international freight destinations.
A Big Corporate Shake-Up
Earlier this summer, XPO's board announced that it approved a decision to spin off its logistics division into a new company, GXO Logistics.
GXO's business will focus on supply chains, with a lot of exposure to fast growing sectors like e-commerce, while XPO, which is now one of the top less-than-truckload trucking operators, will focus mainly on large freight brokerage operations.
Management's hope is that this move will allow both companies to be more successful on their own, allowing investors to more accurately value each business individually.
The split became official last month, giving XPO investors one share of GXO for every share of XPO they owned.
Bottom Line
XPO 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 over two dollars to $4.30 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 of XPO tanked 37% last month, but this big drop is just a reflection of the spinoff. Because shareholders received that new GXO share, investors didn't lose any value overall and the stock's big drop isn't as bad as it seems.
XPO was a big pandemic winner, and because of the split, it now boasts a lean balance sheet and a profitable business. But looking ahead, it may be volatile for XPO in the short-term as analysts adjust their outlook and investors determine if they want to own a company that is focused solely on the trucking industry.
Additional content:
Bet on These 3 Stocks to Grow Your Wealth Post-Retirement
Retirement is often seen as an extended hiatus, allotted to rest and relaxation. But, to enjoy the new chapter of life, retirees not only need to protect their life-time of wealth and savings but also need to add to it. This is only possible through a solid investment strategy.
Making Money After Retirement
When it comes to wealth, protecting and growing it should be in focus for every retired person. To achieve this, one must consider investing in the stock market. The companies which could make good investment bets for retirees are the ones with dominant and established businesses which offer reliable dividend payouts. The firms should also have the potential of boosting earnings year after year.
This strategy can help a retired person steer clear of risky stock investments, thereby avoiding excessive market volatility. Here, we have employed our proprietary stock screener to zero down on three such prospective stocks. These companies have established business models and a history of payout hikes. These firms are also currently paying lucrative dividend yields. All the three firms carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
3 Stocks in the Spotlight
Chevron Corp. is an integrated energy giant with a strong footprint in the Permian – the most prolific basin. Being a leading oil and gas producer in the basin, majority of the company's Permian acreages are responsible for insignificant to no royalty payments. Thus, with trivial royalty payment, the company will generate handsome shareholder returns.
Under its strong management team, Chevron has been demonstrating excellent capital spending discipline, thereby generating handsome cashflow. This allows the company, which roots back to 1879, to consistently return cash to shareholders. The global integrated energy major pays a hefty dividend yield of 5.5%, which compares favorably with the S&P 500's yield of 1.23%.
The second-largest oil company in the United States has a significant earnings growth potential. The Zacks Consensus Estimate for its 2021 and 2022 earnings per share has seen upward estimate revisions over the past 30 days, suggesting earnings growth potential.
With a footprint in 39,000 franchised and company operated stores, spanning across more than 100 nations, McDonald's Corp. is a leading fast-food retailer in the world.
With the first restaurant opened in 1955, the company has turned 93% of its store base to franchise units, thereby generating stable franchise revenues. Most of the analysts are of the view that this business model has paved the way for stable cashflow generation.
The company has a strong preference for long-term shareholder value generation and pays a dividend that yields 2.2% on the current stock price. Over the past seven days, the stock has witnessed upward earnings estimate revisions for 2021 and 2022, respectively.
The Coca-Cola Co. is the largest manufacturer of soft drinks in the world. Over time, the company has broadened its product portfolio that comprises sports drinks, bottled water and juices. The company has been making changes to its line of soft drinks to better-suit health-conscious consumers.
It has been returning capital to stockholders and pays a dividend that yields almost 3% on the current stock price. Over the past 60 days, the stock has witnessed upward earnings estimate revisions for 2021 and 2022, 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.
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Kohl's, XPO Logistics, Chevron, McDonald's and Coca-Cola highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – September 8, 2021 – Zacks Equity Research Shares of Kohl's Corporation (KSS - Free Report) as the Bull of the Day, XPO Logistics Inc. (XPO - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Chevron Corporation (CVX - Free Report) , McDonald's Corporation (MCD - Free Report) and The Coca-Cola Company (KO - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Headquartered in Menomonee Falls, WI, Kohl's Corp. is the number two department store chain in the U.S. Its stores offer moderately-priced apparel, footwear, and accessories for women, men and kids; beauty items; and home décor. Kohl's currently operates over 1,100 stores across 49 states, as well as kohls.com and the Kohl's smartphone app.
Q2 Earnings Recap
Total revenue hit $4.45 billion, with net sales of $4.22 billion, growing over 30% year-over-year; the company's top line also surpassed revenue and sales for Q2 2019.
Gross margin surged 42.5% compared to 33.1% in the prior-year period and 38.3% in the second quarter of 2019 thanks to Kohl's ability to cut back on promotions as inventory remains low.
As a result, earnings showed impressive growth. The bottom line hit a record of $2.48 per share, or over twice the analyst consensus of $1.16. This, in turn, allowed the department store to generate a hefty $1.25 billion of free cash flow last quarter.
Kohl's also repurchased $255 million of stock in Q2.
Because of its blowout second quarter, management raised its full-year outlook for the second time and now expects to generate adjusted EPS between $5.80 and $6.10 per share (vs. its previous forecast of $3.80 and $4.20 per share), which would be another record.
Could KSS Break Out?
Over the past one year, shares of KSS have risen over 147% compared to the S&P 500's gain of 31.9%. 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 $4.04 per share to $6.09 per share. Earnings are expected to see triple-digit growth of more than 600% for fiscal 2022, with 2023 continuing the positive earnings growth trend.
Considering Kohl's latest guidance, share trade at a bargain level of about 9.2X forward earnings, especially given its very strong balance sheet and growth outlook.
Additionally, the company just began the rollout of its partnership with beauty behemoth Sephora, a promising partnership that should boost its top line over the next few years. Kohl's has also added popular brands like Eddie Bauer and Tommy Hilfiger to its product mix.
If you're an investor searching for a retail stock to add to your portfolio, make sure to keep KSS on your shortlist.
Bear of the Day:
Based in Greenwich, CT, XPO Logistics is a third-party logistics provider offering fast, single-source solutions for time-critical and service-sensitive shipments through its non-asset-based transportation network. XPO serves customers in the U.S., Canada, and Mexico with domestic and international freight destinations.
A Big Corporate Shake-Up
Earlier this summer, XPO's board announced that it approved a decision to spin off its logistics division into a new company, GXO Logistics.
GXO's business will focus on supply chains, with a lot of exposure to fast growing sectors like e-commerce, while XPO, which is now one of the top less-than-truckload trucking operators, will focus mainly on large freight brokerage operations.
Management's hope is that this move will allow both companies to be more successful on their own, allowing investors to more accurately value each business individually.
The split became official last month, giving XPO investors one share of GXO for every share of XPO they owned.
Bottom Line
XPO 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 over two dollars to $4.30 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 of XPO tanked 37% last month, but this big drop is just a reflection of the spinoff. Because shareholders received that new GXO share, investors didn't lose any value overall and the stock's big drop isn't as bad as it seems.
XPO was a big pandemic winner, and because of the split, it now boasts a lean balance sheet and a profitable business. But looking ahead, it may be volatile for XPO in the short-term as analysts adjust their outlook and investors determine if they want to own a company that is focused solely on the trucking industry.
Additional content:
Bet on These 3 Stocks to Grow Your Wealth Post-Retirement
Retirement is often seen as an extended hiatus, allotted to rest and relaxation. But, to enjoy the new chapter of life, retirees not only need to protect their life-time of wealth and savings but also need to add to it. This is only possible through a solid investment strategy.
Making Money After Retirement
When it comes to wealth, protecting and growing it should be in focus for every retired person. To achieve this, one must consider investing in the stock market. The companies which could make good investment bets for retirees are the ones with dominant and established businesses which offer reliable dividend payouts. The firms should also have the potential of boosting earnings year after year.
This strategy can help a retired person steer clear of risky stock investments, thereby avoiding excessive market volatility. Here, we have employed our proprietary stock screener to zero down on three such prospective stocks. These companies have established business models and a history of payout hikes. These firms are also currently paying lucrative dividend yields. All the three firms carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
3 Stocks in the Spotlight
Chevron Corp. is an integrated energy giant with a strong footprint in the Permian – the most prolific basin. Being a leading oil and gas producer in the basin, majority of the company's Permian acreages are responsible for insignificant to no royalty payments. Thus, with trivial royalty payment, the company will generate handsome shareholder returns.
Under its strong management team, Chevron has been demonstrating excellent capital spending discipline, thereby generating handsome cashflow. This allows the company, which roots back to 1879, to consistently return cash to shareholders. The global integrated energy major pays a hefty dividend yield of 5.5%, which compares favorably with the S&P 500's yield of 1.23%.
The second-largest oil company in the United States has a significant earnings growth potential. The Zacks Consensus Estimate for its 2021 and 2022 earnings per share has seen upward estimate revisions over the past 30 days, suggesting earnings growth potential.
With a footprint in 39,000 franchised and company operated stores, spanning across more than 100 nations, McDonald's Corp. is a leading fast-food retailer in the world.
With the first restaurant opened in 1955, the company has turned 93% of its store base to franchise units, thereby generating stable franchise revenues. Most of the analysts are of the view that this business model has paved the way for stable cashflow generation.
The company has a strong preference for long-term shareholder value generation and pays a dividend that yields 2.2% on the current stock price. Over the past seven days, the stock has witnessed upward earnings estimate revisions for 2021 and 2022, respectively.
The Coca-Cola Co. is the largest manufacturer of soft drinks in the world. Over time, the company has broadened its product portfolio that comprises sports drinks, bottled water and juices. The company has been making changes to its line of soft drinks to better-suit health-conscious consumers.
It has been returning capital to stockholders and pays a dividend that yields almost 3% on the current stock price. Over the past 60 days, the stock has witnessed upward earnings estimate revisions for 2021 and 2022, respectively.
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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.