For Immediate Release

Chicago, IL – May 13, 2022 – Zacks Equity Research shares Playa Hotels & Resorts N.V. (PLYA Quick QuotePLYA - Free Report) as the Bull of the Day and B&G Foods, Inc. (BGS Quick QuoteBGS - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Advanced Micro Devices (AMD Quick QuoteAMD - Free Report) , and Meta Platforms .

Here is a synopsis of all four stocks:

Bull of the Day:

Playa Hotels & Resorts N.V.  finally has some good news to celebrate as travelers rush to Mexico and the Caribbean in 2022. This Zacks Rank #1 (Strong Buy) is expected to see positive earnings in the year for the first time since the pandemic hit.

Playa Hotels & Resorts owns and/or manages 22 all-inclusive resorts in popular vacation destinations in Mexico, Jamaica and the Dominican Republic.

A Big Beat in Q1

On May 5, Playa Hotels reported its first quarter results and easily beat the Zacks Consensus Estimate by $0.09. Earnings were $0.19 compared to the Zacks Consensus of $0.10.

It was the first quarter earnings were positive in the last 4 quarters.

In spite of the Omicron outbreak in January, Playa Hotels first quarter occupancy rate reached a post-pandemic high and their ADR reached an all-time high with momentum building through the quarter.

Occupancy was 72.4% versus 31.6% a year ago. Net Package ADR rose 34.3% to $388.07 from $288.88 last year.

Mexico used to be the sure thing during the pandemic but the Dominican Republic occupancy surpassed the Mexican resorts during the quarter as the recovery continues to broaden.

Playa Hotels is also optimistic about Jamaica, which recently dropped its COVID-19 testing requirement to enter the country. It believes this will bode well for Jamaica in the second half of the year.

2022's Zacks Consensus Estimate Rises

With the economic reopening, everyone wants to travel. Sure, people were saying in 2021 that everyone wanted to travel. But the demand has gone through the roof in 2022 with airline CEOs saying they've had record bookings.

Zacks only has one estimate on this small cap company but that analyst has raised it over the last week.

The 2022 Zacks Consensus Estimate has jumped to $0.22 from $0.12 before the earnings report. That's earnings growth of 145.8% versus last year when it lost $0.48 per share.

The analyst is also bullish for 2023, with another 70.5% earnings growth expected as the Zacks Consensus has jumped to $0.38.

Is the Travel Boom Already Priced In?

Playa Hotels shares rallied big in 2020 into 2021. Over the last year, they're up only 9.7%. And in 2022, while they have avoided the stock market sell-off, they're up just 3.1%.

They're also not "cheap" on a P/E basis, which is now 38.8. But given the negative earnings of last year, it was never going to be "cheap" on a P/E basis.

But travel should be one of the big winners as the travel reopening continues and consumers are willing to pay elevated prices to get away. Additionally Playa specializes in the all-inclusive hotels, which are now so popular that big hotel brands are adding new locations to their portfolios.

Playa is in a good position to cash in on the all-inclusive trend and shares have been treading water.

For those who love all-inclusive resorts and the hotel companies, Playa Hotel & Resorts is one to keep on your short list.

Bear of the Day:

B&G Foods, Inc. is facing inflationary pressures even as demand for their food products remains elevated. This Zacks Rank #5 (Strong Sell) is now expected to see declining earnings in 2022.

B&G Foods makes, sells and distributes branded shelf-stable and frozen foods across the United States, Canada and Puerto Rico. It has a diverse portfolio of more than 50 brands including Cream of Wheat, Crisco, Dash, Green Giant, Ortega, Spice Islands, Back to Nature and Bear Creek.

Another Miss in Q1 of 2022

On May 5, B&G Foods reported its first quarter 2022 results and missed on the Zacks Consensus Estimate by $0.05. It reported $0.34 versus the consensus of $0.39.

It was the 6th consecutive earnings miss.

Net sales rose 5.4% to $532.4 million versus the first quarter in 2021 however the increase was primarily due to pricing initiatives and the impact of product mix, partially offset by volume declines primarily due to price elasticity and supply chain challenges in the quarter resulting from the COVID-19 Omicron variant.

Gross profit fell year-over-year to 19% of net sales from 23.3% of net sales in 2021 due to higher than expected input cost inflation, including higher costs for raw materials and transportation.

Inflation and higher costs were mentioned numerous times throughout B&G Foods' press release for the quarter.

Analysts Cut Full Year Estimates

B&G Foods was a pandemic winner as consumers started cooking at home during the original 2020 pandemic lock down and rediscovered the art of cooking. They have continued to cook at home even on the reopening.

B&G Foods expects strong consumer demand to continue. But cost inflation is everywhere.

From the May 5, 2022 press release:

"The Company has also seen, and expects to continue to see, significant cost inflation for various inputs, including ingredients, packaging, transportation and labor attributable to a number of factors, including the COVID-19 pandemic, the war in Ukraine, climate and weather conditions, supply chain disruptions (including raw material shortages) and labor shortages."

B&G Foods is raising prices to address the inflationary pressures but even with that, the analysts are still bearish. 2 estimates have been lowered in the last week.

The Zacks Consensus Estimate has fallen to $1.66 from $2.01 just 90 days ago. That's an earnings decline of 11.7% as the company made $1.88 last year.

Shares Sink in 2022

B&G Foods shares soared during the first year of the pandemic but in 2021, they mostly treaded water. However, like a lot of stocks in 2022, the shares have sunk.

They are down 22% year-to-date and now trade with a forward P/E of 14.

However, investors are rewarded by the company's dividend which is now yielding 7.6%. In May 2022, it paid its 70th consecutive quarterly dividend. It has paid a dividend every quarter since its Oct 2004 IPO.

Many income investors like B&G for its consistent dividend history. It did not cut the dividend during the pandemic.

However, value investors might want to wait on the sidelines for it to get cheaper and for the inflationary pressures to recede.

Additional content:

AMD, Meta Collaborate on Making Metaverse a Reality

Advanced Micro Devices announced on May 11 that the company is collaborating with Meta Platforms as an ecosystem partner to build a Metaverse-ready radio access unit (RAN).

The Metaverse, which is a set of immersive, interconnected and interoperable digital spaces, is likely to revolutionize the Internet in the days ahead. However, in order to make the Metaverse a reality, significant advancements are required in network latency, symmetrical bandwidth and overall speed of networks.

The transition to the Metaverse is a collective effort, and Meta has been collaborating with partners to develop and architect the required networking system for the Metaverse.

As such, AMD's radio chip Xilinx Zynq UltraScale RFSoC will be utilized to develop multiple Evenstar radio units (RU) to expand 4G/5G mobile network infrastructure.

This collaboration with Meta is expected to showcase the importance of AMD's investment in acquiring Xilinx back in October 2021 for a whopping $35 billion.

AMD's shares, however, fell 0.91% to close at $87.92 after the release of the news on May 11. In the year-to-date period, AMD's shares have tumbled 38.9% compared with the Zacks Computer and Technology Sector's decline of 26%.

AMD Steps Into The Metaverse

The recent partnership with Meta under Meta's mobile internet infrastructure program will help AMD foray into the alternate reality platform as it contributes to building the Metaverse.

Meta launched the program called Evenstar back in 2020 and promotes a platform called OpenRan that makes it possible for cellular network operators to mix and match hardware for building base stations instead of buying it from one equipment maker.

Meta launched this program in order to make Metaverse a reality. Metaverse will allow geographically distant participants to enjoy realistic experiences that blend virtual content into a user's physical world. In order to achieve this feat, an improved RAN supporting 4G, and 5G networks are required. A RAN is the radio element of a cellular network required to wirelessly connect mobiles, laptops or remotely controlled machines. Nevertheless, this is a costly affair.

Meta's recent partnership with AMD will, however, reduce base station costs to make broadband accessible worldwide.

AMD will help Meta aggressively reduce costs in making Evenstar RUs and achieve the goal of expanding into uncovered regions and the underdeveloped countries to connect more people to the Metaverse.

AMD's collaboration with Meta will aid the company in transitioning out of the slowing pc market and concentrate on semi-custom chip business, which will help to expand in high-growth markets like the Metaverse.

Metaverse, upon completion, is expected to generate hundreds of billions of dollars in digital commerce and support millions of jobs and new projects for creators and developers.

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