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Archer Daniels Midland and Ferrari have been highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – June 20, 2022 – Zacks Equity Research shares Archer Daniels Midland (ADM - Free Report) as the Bull of the Day and Ferrari (RACE - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Antero Resources (AR - Free Report) , Comstock Resources (CRK - Free Report) and Southwestern Energy (SWN - Free Report) .
Archer Daniels Midland delivered impressive first-quarter 2022 results in late April, as both top and bottom lines advanced year over year. This marked the 10th straight quarter of adjusted operating profit growth.
Despite supply-chain headwinds, results gained from solid demand, improved productivity, product innovations and persistent growth in the Nutrition segment.
Management expects reduced crop supplies, stemming from weak Canadian canola crops, the short South American crops and disruptions in the Black Sea region to affect global grain markets for the next few years.
ADM is one of the world's leading producers of food and beverage ingredients as well as goods made from various agricultural products.
The company processes oilseeds, corn, wheat, cocoa and other feedstuffs. Moreover, it engages in the manufacturing, sale, and distribution of products like natural flavor ingredients, flavor systems, natural colors, proteins, emulsifiers, soluble fiber, polyols, hydrocolloids, natural health and nutrition products as well as other specialty food and animal feed ingredients.
Zacks Outlook
ADM Q1 results reflected gains from healthy product demand and strength in the Nutrition segment, while reduced crop supplies have been a drag on performance.
This marked the 11th straight quarter of an earnings surprise and the 10th straight quarter of adjusted operating profit growth. Results gained from solid demand, improved productivity and product innovations.
Persistent growth in the Nutrition segment, driven by significant gains in the Human and Animal Nutrition units, remained key growth drivers. Management expects the nutrition segment operating profit growth of 20% in 2022.
However, dismal margins and rising SG&A costs are deterrents. Higher inflation and issues related to the short crop in South America, stemming from the conflict in Ukraine, remain concerning.
On balance, we rate ADM Outperform for the next 6-12 months with Value, Growth, and Momentum scores of B, C and B, respectively.
Analysts Raise Estimates
The reason that ADM is a Zacks #1 Rank again is purely based on analysts raising their EPS estimates with sufficient magnitude and agreement.
After April earnings, the Zacks Consensus Estimate for this year jumped nearly 20% from $5.15 to $6.13.
But in the last few weeks, analysts have been nudging up estimates more, pushing the consensus to $6.33, representing 22% annual growth.
And the topline now sits at $95.75 billion, for a projected 12.3% advance year-on-year.
Analysts are clearly expecting a strong Q2 from ADM with Jefferies boosting their expectations for the quarter from $1.28 to $1.75.
ADM is expected to report again in late July. Until then, the current market pullback looks like a great opportunity to grab some shares under $80.
Ferrari has slipped into the cellar of the Zacks Rank since its early May earnings report as analysts continue to lower estimates.
In the past two months, the Zacks Consensus EPS Estimate for this year has dropped from $5.24 to $4.89, representing an 8% decline from 2021.
And next year's EPS consensus has been pared back from $6.14 to $5.78. It's worth noting that both years stood at $5.35 and $6.25, respectively, just 90 days ago.
Much of the downward revisions could be the result of pessimism about global growth that would impact luxury auto sales. Because the Q1 report was solid.
First Quarter Details
Ferrari delivered Q1 quarterly earnings of $1.45 per share, beating the Zacks Consensus Estimate of $1.26 per share. This compares to earnings of $1.34 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represented an earnings surprise of 15%. A quarter ago, it was expected that this luxury sports car maker would post earnings of $1.02 per share when it actually produced earnings of $1.33, delivering a surprise of 30.39%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times by an average of 20%.
Ferrari, which belongs to the Zacks Automotive - Original Equipment industry, posted revenues of $1.33 billion for the quarter ended March 2022, surpassing the Zacks Consensus Estimate by 14.14%. This compares to year-ago revenues of $1.22 billion. The company has topped consensus revenue estimates just once over the last four quarters.
And despite the big revenue beat in Q1, analysts are only expecting 2.46% topline growth this year to $5.17 billion.
Ferrari is trading under 6 times sales since falling over 31% this year. There may be value for this elite auto maker, but during the current global growth slowdown it's best to wait until estimates stop going down and stabilize. The Zacks Rank will let you know.
Additional content:
Boost Your Portfolio with These 3 Natural Gas Stocks
Being the cleanest burning fossil fuel, natural gas is on track to witness increasing demand. The commodity is being used for various purposes starting from heating homes and for industrial, residential and commercial activities. With high demand, it is expected that the pricing scenario for the commodity will remain favorable, encouraging investors to bet on upstream players.
High Gas Price
The price of natural gas is trading higher than $7 per million British thermal units (MMBtu), marking a massive improvement in the past year. The pricing scenario will be promising if the demand for the commodity remains favorable. The commodity is being used across all the sectors in the United States at a higher pace. Increasing economic activities have already led to the ramp of natural gas consumption in the industrial sector.
Residential and commercial sectors are also witnessing higher uses of natural gas. In the United States, the consumption of natural gas will likely increase 3% in 2022 to 85.3 billion cubic feet per day (Bcf/d), per the U.S. Energy Information Administration.
E&P Players to Gain
Rising gas price is expected to be favorable for energy companies involved in natural gas exploration and production (E&P) activities. To capitalize on high gas price, E&P companies have been adding rigs to gas-rich resources since the beginning of the year.
Since selecting the right companies with a footprint in the prolific gas plays is not an easy task, we are employing our proprietary Stock Screener to zero down on three stocks that are poised to gain. Two of the stocks sport a Zacks Rank #1 (Strong Buy), while one carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Antero Resources is a leading upstream energy player with a strong presence in the gas-rich prolific Appalachian Basin in West Virginia and Ohio. In the past 30 days, Antero Resources has witnessed upward earnings estimate revisions for 2022 and 2023.
The substantial exposure to improving commodity price is a huge positive for #1 Ranked Antero Resources. AR's production outlook seems bright, given that the firm has more than 20 years of premium drilling inventories.
Comstock Resources is a well-known name in the upstream space, with operations across the gas-rich Haynesville shale in North Louisiana and East Texas. The substantial exposure to improving commodity price is a huge positive for Comstock.
In the past 30 days, Comstock has witnessed upward earnings estimate revisions for 2022 and 2023. Through 2024, Zacks #2 Ranked CRK aims to generate a free cash flow of $2 billion to $3 billion.
Favorable commodity prices are also a huge positive for Southwestern Energy since it is a leading natural gas producer in the United States. In the past 30 days, Southwestern Energy has witnessed upward earnings estimate revisions for 2022 and 2023.
For this year, it is likely to see earnings growth of 46.7%. SWN, with Zacks Rank of 2, is gaining from deep Tier 1 inventory along with a sound financial and credit profile.
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.
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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Archer Daniels Midland and Ferrari have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – June 20, 2022 – Zacks Equity Research shares Archer Daniels Midland (ADM - Free Report) as the Bull of the Day and Ferrari (RACE - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Antero Resources (AR - Free Report) , Comstock Resources (CRK - Free Report) and Southwestern Energy (SWN - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Archer Daniels Midland delivered impressive first-quarter 2022 results in late April, as both top and bottom lines advanced year over year. This marked the 10th straight quarter of adjusted operating profit growth.
Despite supply-chain headwinds, results gained from solid demand, improved productivity, product innovations and persistent growth in the Nutrition segment.
Management expects reduced crop supplies, stemming from weak Canadian canola crops, the short South American crops and disruptions in the Black Sea region to affect global grain markets for the next few years.
ADM is one of the world's leading producers of food and beverage ingredients as well as goods made from various agricultural products.
The company processes oilseeds, corn, wheat, cocoa and other feedstuffs. Moreover, it engages in the manufacturing, sale, and distribution of products like natural flavor ingredients, flavor systems, natural colors, proteins, emulsifiers, soluble fiber, polyols, hydrocolloids, natural health and nutrition products as well as other specialty food and animal feed ingredients.
Zacks Outlook
ADM Q1 results reflected gains from healthy product demand and strength in the Nutrition segment, while reduced crop supplies have been a drag on performance.
This marked the 11th straight quarter of an earnings surprise and the 10th straight quarter of adjusted operating profit growth. Results gained from solid demand, improved productivity and product innovations.
Persistent growth in the Nutrition segment, driven by significant gains in the Human and Animal Nutrition units, remained key growth drivers. Management expects the nutrition segment operating profit growth of 20% in 2022.
However, dismal margins and rising SG&A costs are deterrents. Higher inflation and issues related to the short crop in South America, stemming from the conflict in Ukraine, remain concerning.
On balance, we rate ADM Outperform for the next 6-12 months with Value, Growth, and Momentum scores of B, C and B, respectively.
Analysts Raise Estimates
The reason that ADM is a Zacks #1 Rank again is purely based on analysts raising their EPS estimates with sufficient magnitude and agreement.
After April earnings, the Zacks Consensus Estimate for this year jumped nearly 20% from $5.15 to $6.13.
But in the last few weeks, analysts have been nudging up estimates more, pushing the consensus to $6.33, representing 22% annual growth.
And the topline now sits at $95.75 billion, for a projected 12.3% advance year-on-year.
Analysts are clearly expecting a strong Q2 from ADM with Jefferies boosting their expectations for the quarter from $1.28 to $1.75.
ADM is expected to report again in late July. Until then, the current market pullback looks like a great opportunity to grab some shares under $80.
Bear of the Day:
Ferrari has slipped into the cellar of the Zacks Rank since its early May earnings report as analysts continue to lower estimates.
In the past two months, the Zacks Consensus EPS Estimate for this year has dropped from $5.24 to $4.89, representing an 8% decline from 2021.
And next year's EPS consensus has been pared back from $6.14 to $5.78. It's worth noting that both years stood at $5.35 and $6.25, respectively, just 90 days ago.
Much of the downward revisions could be the result of pessimism about global growth that would impact luxury auto sales. Because the Q1 report was solid.
First Quarter Details
Ferrari delivered Q1 quarterly earnings of $1.45 per share, beating the Zacks Consensus Estimate of $1.26 per share. This compares to earnings of $1.34 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represented an earnings surprise of 15%. A quarter ago, it was expected that this luxury sports car maker would post earnings of $1.02 per share when it actually produced earnings of $1.33, delivering a surprise of 30.39%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times by an average of 20%.
Ferrari, which belongs to the Zacks Automotive - Original Equipment industry, posted revenues of $1.33 billion for the quarter ended March 2022, surpassing the Zacks Consensus Estimate by 14.14%. This compares to year-ago revenues of $1.22 billion. The company has topped consensus revenue estimates just once over the last four quarters.
And despite the big revenue beat in Q1, analysts are only expecting 2.46% topline growth this year to $5.17 billion.
Ferrari is trading under 6 times sales since falling over 31% this year. There may be value for this elite auto maker, but during the current global growth slowdown it's best to wait until estimates stop going down and stabilize. The Zacks Rank will let you know.
Additional content:
Boost Your Portfolio with These 3 Natural Gas Stocks
Being the cleanest burning fossil fuel, natural gas is on track to witness increasing demand. The commodity is being used for various purposes starting from heating homes and for industrial, residential and commercial activities. With high demand, it is expected that the pricing scenario for the commodity will remain favorable, encouraging investors to bet on upstream players.
High Gas Price
The price of natural gas is trading higher than $7 per million British thermal units (MMBtu), marking a massive improvement in the past year. The pricing scenario will be promising if the demand for the commodity remains favorable. The commodity is being used across all the sectors in the United States at a higher pace. Increasing economic activities have already led to the ramp of natural gas consumption in the industrial sector.
Residential and commercial sectors are also witnessing higher uses of natural gas. In the United States, the consumption of natural gas will likely increase 3% in 2022 to 85.3 billion cubic feet per day (Bcf/d), per the U.S. Energy Information Administration.
E&P Players to Gain
Rising gas price is expected to be favorable for energy companies involved in natural gas exploration and production (E&P) activities. To capitalize on high gas price, E&P companies have been adding rigs to gas-rich resources since the beginning of the year.
Since selecting the right companies with a footprint in the prolific gas plays is not an easy task, we are employing our proprietary Stock Screener to zero down on three stocks that are poised to gain. Two of the stocks sport a Zacks Rank #1 (Strong Buy), while one carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Antero Resources is a leading upstream energy player with a strong presence in the gas-rich prolific Appalachian Basin in West Virginia and Ohio. In the past 30 days, Antero Resources has witnessed upward earnings estimate revisions for 2022 and 2023.
The substantial exposure to improving commodity price is a huge positive for #1 Ranked Antero Resources. AR's production outlook seems bright, given that the firm has more than 20 years of premium drilling inventories.
Comstock Resources is a well-known name in the upstream space, with operations across the gas-rich Haynesville shale in North Louisiana and East Texas. The substantial exposure to improving commodity price is a huge positive for Comstock.
In the past 30 days, Comstock has witnessed upward earnings estimate revisions for 2022 and 2023. Through 2024, Zacks #2 Ranked CRK aims to generate a free cash flow of $2 billion to $3 billion.
Favorable commodity prices are also a huge positive for Southwestern Energy since it is a leading natural gas producer in the United States. In the past 30 days, Southwestern Energy has witnessed upward earnings estimate revisions for 2022 and 2023.
For this year, it is likely to see earnings growth of 46.7%. SWN, with Zacks Rank of 2, is gaining from deep Tier 1 inventory along with a sound financial and credit profile.
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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Zacks Investment Research
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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.