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The Zacks Analyst Blog Highlights Analog Devices, Nucor, Ulta Beauty, Marathon Petroleum, and Westlake.
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For Immediate Release
Chicago, IL – June 6, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Analog Devices Inc. (ADI - Free Report) , Nucor Corp. (NUE - Free Report) , Ulta Beauty Inc. (ULTA - Free Report) , Marathon Petroleum Corp. (MPC - Free Report) and Westlake Corp. (WLK - Free Report) .
Here are highlights from Friday’s Analyst Blog:
Top 5 Momentum Stocks After a Volatile Week of Trading
Last week, despite much turbulence,Wall Street somehow saw back-to-back winning weeks. In the last couple of weeks, stocks showed a good northbound movement. U.S. stocks markets are highly oversold in the first five months of 2022. From here, a pullback is expected.
At this stage, it should be fruitful to buy momentum stocks with a favorable Zacks Rank. Five of them are — Analog Devices Inc., Nucor Corp., Ulta Beauty Inc., Marathon Petroleum Corp. and Westlake Corp..
A Relief Rally on Wall Street
U.S. stocks have corrected significantly in 2022 after a fabulous rally in the last two pandemic-ridden years. Mounting inflation, higher interest rate regime together with tighter monetary control and a prolonged war between Russia and Ukraine significantly dented investors' confidence in risky assets like equities.
The Nasdaq Composite has been in bear market since March. The S&P 500 briefly fell in bear territory in May and is currently in correction zone. The Dow was in correction zone in May. However, last week, these three major stock indexes recorded their best weekly gains since November 2020.
Week to date, the Dow, the S&P 500 and the Nasdaq Composite – are up 0.1%, 0.5% and 1.5%, respectively, with just a day of trading left. All the three indexes had posted their 52-week lows on May 20, 2022. From there, the Dow, the S&P 500 and the Nasdaq Composite have rallied 8.5%, 9.6% and 11.6%, respectively, as of Jun 2.
Solid Fundamentals of the U.S. Economy
In 2022, the biggest drivers of the U.S. stock markets should be the nation's strong economic fundamentals. The labor market has returned to the pre-pandemic level. Aggregate demand has remained strong despite skyrocketing inflation. The two inflation measures — the CPI and PCE Price index Data —dropped marginally in April.
The retail sales and industrial production data for April confirmed that both consumer spending and business investment remained solid amid difficulties. The ISM manufacturing and services indexes remained elevated despite some decline in April. The Conference Board's Consumer Confidence index and the University of Michigan's Consumer Sentiment Index remained elevated too.
Moreover, the U.S. economy will get more upside from the government's infrastructure spending. On Nov 15, President Joe Biden signed a bipartisan infrastructure bill of $550 billion in addition to the previously approved funds of $450 billion for five years. Total spending may go up to $1.2 trillion if the plan is extended to eight years.
Our Top Picks
Momentum investing calls for continued appraisal of stocks, ensuring that an investor does not pick a beaten-down name or overlook a thriving one. Momentum investors buy high on the anticipation that a stock will only ascend in the short to intermediate term.
We have narrowed our search to five large-cap (market capital > $10 billion) momentum stocks that have solid upside left for the rest of 2022. These stocks have seen strong earnings estimate revisions within the last 30 days indicating that the market is expecting these companies to do good business in the near term.
Analog Devices has strength across communication, consumer, industrial and automotive end-markets. Further, solid demand for high-performance analog and mixed-signal solutions has acted as a tailwind. Growing momentum across the electric vehicle space on the back of robust Battery Management System solutions remains a positive for ADI.
Growing power design wins are the other positives for Analog Devices. The solid momentum of the HEV platform across the cabin electronics ecosystem remains a tailwind for ADI. Moreover, Analog Devices remains optimistic about the growth prospects associated with its Maxim acquisition and 5G.
Analog Devices has an expected earnings growth rate of 43% for the current fiscal-year (ending October 2022). The Zacks Consensus Estimate for its current fiscal-year earnings has improved 9.6% over the last 30 days.
Nucor is committed to expanding its production capabilities and growing its business through strategic acquisitions. NUE has already commissioned some of its growth projects. These should drive growth and strengthen Nucor's position as a low-cost producer.
NUE is also seeing strong momentum in the non-residential construction market and strong demand in the heavy equipment market. NUE remains focused on achieving greater penetration of the automotive market because of the segment's long-term growth opportunities. Higher steel prices due to tight supply and higher end-market demand should also drive Nucor's margins.
Nucor has an expected earnings growth rate of 27.9% for the current-year. The Zacks Consensus Estimate for current-year earnings improved 42.8% over the last 30 days.
Ulta Beauty has been benefiting from its omnichannel strength, thanks to efficient store and digital operations. ULTA's skincare category has been gaining on consumers' rising interest toward self-care. Further, management has raised its fiscal 2022 guidance.
Ulta Beauty has been seeing market share gains in major beauty categories for a while now, with skincare standing out. Its foremost priority is to strengthen its omnichannel business and explore the potential of both physical and digital facets.
Ulta Beauty has an expected earnings growth rate of 11.6% for the current fiscal-year (ending January 2023). The Zacks Consensus Estimate for current fiscal-year earnings improved 7.9% over the last 7 days.
Marathon Petroleum is poised for further price gains based on a slew of positives. MPC's $21 billion sale of its Speedway retail business provided it with a much-needed cash infusion. The deal also comes with a 15-year fuel supply agreement under which Marathon Petroleum will supply 7.7 billion gallons of gasoline per year to 7-Eleven, thus ensuring a steady revenue stream.
MPC's exposure to more stable cash flows from the logistics segment diversifies the earnings stream and offers a buffer against the volatile refining business. Consequently, Marathon Petroleum is primed for significant capital appreciation and is viewed as a preferred downstream operator to own now.
Marathon Petroleum has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.9% over the last 7 days.
Westlake Chemical is benefiting from synergies from the Axiall acquisition. The buyout has diversified its product portfolio and geographical operations. The NAKAN acquisition has also allowed WLK to boost its compounding business globally. Further, Westlake Chemical sees favorable demand trends for polyethylene and polyvinyl chloride resin.
Strong demand in the polyethylene business is likely to continue, especially in food packaging. Also, rising housing starts in the United States augur well for WLK's downstream vinyl products business and domestic demand for PVC. Westlake Chemical should also benefit from its capacity expansion projects
Westlake Chemical has an expected earnings growth rate of 39.9% for the current year. The Zacks Consensus Estimate for current-year earnings improved 14.6% over the last 30 days.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
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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The Zacks Analyst Blog Highlights Analog Devices, Nucor, Ulta Beauty, Marathon Petroleum, and Westlake.
For Immediate Release
Chicago, IL – June 6, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Analog Devices Inc. (ADI - Free Report) , Nucor Corp. (NUE - Free Report) , Ulta Beauty Inc. (ULTA - Free Report) , Marathon Petroleum Corp. (MPC - Free Report) and Westlake Corp. (WLK - Free Report) .
Here are highlights from Friday’s Analyst Blog:
Top 5 Momentum Stocks After a Volatile Week of Trading
Last week, despite much turbulence,Wall Street somehow saw back-to-back winning weeks. In the last couple of weeks, stocks showed a good northbound movement. U.S. stocks markets are highly oversold in the first five months of 2022. From here, a pullback is expected.
At this stage, it should be fruitful to buy momentum stocks with a favorable Zacks Rank. Five of them are — Analog Devices Inc., Nucor Corp., Ulta Beauty Inc., Marathon Petroleum Corp. and Westlake Corp..
A Relief Rally on Wall Street
U.S. stocks have corrected significantly in 2022 after a fabulous rally in the last two pandemic-ridden years. Mounting inflation, higher interest rate regime together with tighter monetary control and a prolonged war between Russia and Ukraine significantly dented investors' confidence in risky assets like equities.
The Nasdaq Composite has been in bear market since March. The S&P 500 briefly fell in bear territory in May and is currently in correction zone. The Dow was in correction zone in May. However, last week, these three major stock indexes recorded their best weekly gains since November 2020.
Week to date, the Dow, the S&P 500 and the Nasdaq Composite – are up 0.1%, 0.5% and 1.5%, respectively, with just a day of trading left. All the three indexes had posted their 52-week lows on May 20, 2022. From there, the Dow, the S&P 500 and the Nasdaq Composite have rallied 8.5%, 9.6% and 11.6%, respectively, as of Jun 2.
Solid Fundamentals of the U.S. Economy
In 2022, the biggest drivers of the U.S. stock markets should be the nation's strong economic fundamentals. The labor market has returned to the pre-pandemic level. Aggregate demand has remained strong despite skyrocketing inflation. The two inflation measures — the CPI and PCE Price index Data —dropped marginally in April.
The retail sales and industrial production data for April confirmed that both consumer spending and business investment remained solid amid difficulties. The ISM manufacturing and services indexes remained elevated despite some decline in April. The Conference Board's Consumer Confidence index and the University of Michigan's Consumer Sentiment Index remained elevated too.
Moreover, the U.S. economy will get more upside from the government's infrastructure spending. On Nov 15, President Joe Biden signed a bipartisan infrastructure bill of $550 billion in addition to the previously approved funds of $450 billion for five years. Total spending may go up to $1.2 trillion if the plan is extended to eight years.
Our Top Picks
Momentum investing calls for continued appraisal of stocks, ensuring that an investor does not pick a beaten-down name or overlook a thriving one. Momentum investors buy high on the anticipation that a stock will only ascend in the short to intermediate term.
We have narrowed our search to five large-cap (market capital > $10 billion) momentum stocks that have solid upside left for the rest of 2022. These stocks have seen strong earnings estimate revisions within the last 30 days indicating that the market is expecting these companies to do good business in the near term.
Each of our picks carries a Zacks Rank #1 (Strong Buy) and has a Momentum Score of A. You can see the complete list of today's Zacks #1 Rank stocks here.
Analog Devices has strength across communication, consumer, industrial and automotive end-markets. Further, solid demand for high-performance analog and mixed-signal solutions has acted as a tailwind. Growing momentum across the electric vehicle space on the back of robust Battery Management System solutions remains a positive for ADI.
Growing power design wins are the other positives for Analog Devices. The solid momentum of the HEV platform across the cabin electronics ecosystem remains a tailwind for ADI. Moreover, Analog Devices remains optimistic about the growth prospects associated with its Maxim acquisition and 5G.
Analog Devices has an expected earnings growth rate of 43% for the current fiscal-year (ending October 2022). The Zacks Consensus Estimate for its current fiscal-year earnings has improved 9.6% over the last 30 days.
Nucor is committed to expanding its production capabilities and growing its business through strategic acquisitions. NUE has already commissioned some of its growth projects. These should drive growth and strengthen Nucor's position as a low-cost producer.
NUE is also seeing strong momentum in the non-residential construction market and strong demand in the heavy equipment market. NUE remains focused on achieving greater penetration of the automotive market because of the segment's long-term growth opportunities. Higher steel prices due to tight supply and higher end-market demand should also drive Nucor's margins.
Nucor has an expected earnings growth rate of 27.9% for the current-year. The Zacks Consensus Estimate for current-year earnings improved 42.8% over the last 30 days.
Ulta Beauty has been benefiting from its omnichannel strength, thanks to efficient store and digital operations. ULTA's skincare category has been gaining on consumers' rising interest toward self-care. Further, management has raised its fiscal 2022 guidance.
Ulta Beauty has been seeing market share gains in major beauty categories for a while now, with skincare standing out. Its foremost priority is to strengthen its omnichannel business and explore the potential of both physical and digital facets.
Ulta Beauty has an expected earnings growth rate of 11.6% for the current fiscal-year (ending January 2023). The Zacks Consensus Estimate for current fiscal-year earnings improved 7.9% over the last 7 days.
Marathon Petroleum is poised for further price gains based on a slew of positives. MPC's $21 billion sale of its Speedway retail business provided it with a much-needed cash infusion. The deal also comes with a 15-year fuel supply agreement under which Marathon Petroleum will supply 7.7 billion gallons of gasoline per year to 7-Eleven, thus ensuring a steady revenue stream.
MPC's exposure to more stable cash flows from the logistics segment diversifies the earnings stream and offers a buffer against the volatile refining business. Consequently, Marathon Petroleum is primed for significant capital appreciation and is viewed as a preferred downstream operator to own now.
Marathon Petroleum has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.9% over the last 7 days.
Westlake Chemical is benefiting from synergies from the Axiall acquisition. The buyout has diversified its product portfolio and geographical operations. The NAKAN acquisition has also allowed WLK to boost its compounding business globally. Further, Westlake Chemical sees favorable demand trends for polyethylene and polyvinyl chloride resin.
Strong demand in the polyethylene business is likely to continue, especially in food packaging. Also, rising housing starts in the United States augur well for WLK's downstream vinyl products business and domestic demand for PVC. Westlake Chemical should also benefit from its capacity expansion projects
Westlake Chemical has an expected earnings growth rate of 39.9% for the current year. The Zacks Consensus Estimate for current-year earnings improved 14.6% over the last 30 days.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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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.