For Immediate Release
Chicago, IL – July 22, 2022 – Zacks Equity Research shares Enterprise Products Partners L.P. (
EPD Quick Quote EPD - Free Report) as the Bull of the Day and ManpowerGroup ( MAN Quick Quote MAN - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on General Motors ( GM Quick Quote GM - Free Report) , Driven Brand Holdings ( DRVN Quick Quote DRVN - Free Report) and Lear Corp. ( LEA Quick Quote LEA - Free Report) .
Here is a synopsis of all five stocks:
Enterprise Products Partners L.P. was recently added to Zacks #1 Rank (Strong Buy) list as analysts are raising full year earnings estimates even before the company reports second quarter earnings results.
Enterprise Products Partners is a North American public partnership which provides midstream energy services to producers and consumers of natural gas, NGLs, crude oil, refined products and petrochemicals.
The partnership owns 50,000 miles of pipelines, over 260 million barrels of storage capacity for NGLs, crude oil, petrochemicals and refined products and 14 billion cubic feet of natural gas storage capacity.
Its services include natural gas, crude oil, and petrochemical gathering, transportation and storage as well as NGL transportation, fractionation storage and marine terminals. It also has a marine transportation business that operates on key U.S. inland and intracoastal waterway systems.
Raised the Dividend Again
On July 7, Enterprise Products Partners raised its second quarter dividend 5.6% year-over-year to $0.475 per unit.
It was the 74th distribution increase since the company's IPO in 1998 and the 24th year of distribution growth.
The dividend is currently yielding a juicy 7.5%.
Enterprise Products Partners also repurchased $35 million of common units in the second quarter as part of its share buyback program.
It has utilized 26% of its $2 billion share buyback program.
Analysts Raise Full Year Earnings Estimates
In the last week, the analysts have gotten bullish on Enterprise Products Partners even though it hasn't reported earnings yet. 3 estimates have been revised higher for 2022 in that time, which has pushed the Zacks Consensus Estimate up to $2.41 from $2.40.
That is earnings growth of 14.8% as the company made $2.10 last year.Enterprise Products Partners will report second quarter earnings on Aug 3, 2022, before the market opens.
Shares Fall from Highs
The energy stocks have pulled back from 2022 highs and Enterprise Products Partners is no exception. Shares have fallen 5.5% in the last 3 months.
They are cheaper than earlier this year, with a forward P/E of just 10.6.
For investors looking for a big income payout and rising earnings estimates, Enterprise Products Partners is one to keep on your short list.
ManpowerGroup is still seeing a strong global job market but negative currency exchange is hitting its earnings. Analysts have cut earnings estimates on this Zacks Rank #5 (Strong Sell).
ManpowerGroup is a global workforce solutions company. It has 3 different brands: Manpower, Experis and Talent Solutions. It operates in 75 countries and territories.
A Beat in the Second Quarter
On July 19, 2022, ManpowerGroup reported its second quarter results and beat the Zacks Consensus by $0.02. Earnings were $2.33 versus the consensus of $2.31.
Revenues fell 4% to $5.1 billion but were up 6% in constant currency.
It saw continued strong performance of its higher margin brands, including Experis and Talent Solutions. Manpower saw some supply chain disruptions in certain European markets which hit performance in that brand.
ManpowerGroup Guides Under Consensus on Q3
The strong dollar is hitting. ManpowerGroup gave third quarter guidance below the Zacks Consensus, in the range of $2.19 to $2.27.
That includes an unfavorable currency impact of $0.29. The Zacks Consensus for Q3 had been looking for $2.28.
But ManpowerGroup isn't bearish on the upcoming quarter.
"As we start the third quarter, labor markets remain very solid and demand for talent is strong. We continue to monitor those sectors in Europe where present-day supply-chain disruptions are impacting our business, particularly in the automotive industry," said Jonas Prising, CEO.
"At the same time, we also believe the persistent level of talent shortage represents a significant opportunity for our business," he added.
As a result of the lower guide, analysts have lowered both Q3 and full year estimates.
The 2022 Zacks Consensus has fallen to $8.83 from $8.97 prior to the earnings release. But that's still earnings growth of 22% as ManpowerGroup made just $7.24 last year.
Shares Sink in 2022
With fears of a recession climbing, it's not surprising that shares of ManpowerGroup have fallen 18.6% year-to-date.
Who wants to own a staffing company as the economy slows?
Shares are cheap, however, with a forward P/E of just 8.9. But it could be a value trap if earnings estimates are cut further.
Investors do get a dividend, yielding 3.4%, for their troubles.
But investors may want to wait on the sidelines and keep ManpowerGroup on a watch list until there is more certainty in the global economy.
Additional content: What to Expect When GM Reports Earnings Next Week General Motors is slated to release on Jul 26, before market open. The Zacks Consensus Estimate for the quarter's earnings and revenues is pegged at $1.56 per share and $36.54 billion, respectively. second-quarter 2022 results
The Zacks Consensus Estimate for General Motors' second-quarter earnings per share has been revised downward by 7 cents over the past 30 days. The bottom-line projection indicates a year-over-year decline of 20.8%. The top-line estimate, however, implies year-over-year growth of 6.9%.
In the last reported quarter, GM topped earnings estimates on better-than-expected profits from the North America, International and Financial segments. In fact, over the trailing four quarters, the company topped the Zacks Consensus Estimate on all occasions, with the average being 24.4%.
While investors are keeping their fingers crossed for GM to retain its earnings beat streak in second-quarter 2022 as well, our model does not predict the same.
Things to Consider
General Motors' U.S. sales came in at 582,401 vehicles in the second quarter, declining 15% on a year-over-year basis. Deliveries of Chevrolet, GMC, Buick and Cadillac brands skid 11%,14%, 56% and 6.7%, respectively. Escalating supply chain issues — aggravated by the Russia-Ukraine war — kept a lid on vehicle supply despite robust demand.
However, rising average prices of vehicles amid tight inventories due to supply-demand mismatch are anticipated to have partially offset the decline in vehicle deliveries. The Zacks Consensus Estimate for General Motors' Q2 revenues from the North America unit is pegged at $29,132 million, indicating an increase from $27,932 million generated in the year-ago period.
However, high commodity costs, a tough labor market and logistical challenges are likely to have played spoilsports. Escalating operating expenses are also anticipated to have weighed on segmental margins. The consensus mark for General Motors' operating profit from the GMNA segment is pegged at $2,433 million, implying a decline of around 16% on a year-over-year basis.
As it is, the legacy automaker had already issued a warning early this month that its second-quarter results would be materially impacted by the severe ongoing supply chain snarls.
General Motors sold 484,200 vehicles in China during the second quarter of 2022, declining 36% year over year and marking the lowest levels since the first quarter of 2020. Sales recorded double-digit drops at all five brands — Buick, Cadillac, Chevrolet, Baojun and Wuling.
The downside stemmed from persistent chip shortage and COVID-19 resurgence. Volumes declined 21% sequentially. The Zacks Consensus Estimate for operating profit from the GMI segment is pegged at $139 million, implying a decline from $328 million generated in the last reported quarter.
General Motors' gloomy 2022 outlook for the GM Financial unit raises concern. The Zacks Consensus Estimate for operating profit from the GM Financial unit is pegged at $870 million, down from $1,581 million recorded in the corresponding quarter of 2021. Meanwhile, the consensus mark for the GM Cruise unit's operating loss stands at $291 million, narrowing from $363 million incurred in the year-ago period.
Our proven model does not conclusively predict an earnings beat for General Motors this time around. The combination of a positive
and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here Earnings ESP Earnings ESP: It has an Earnings ESP of -8.72%. This is because the Most Accurate Estimate of $1.42 per share is pegged 14 cents lower than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter. Zacks Rank: General Motors currently carries a Zacks Rank of 3.
You can see
the complete list of today's Zacks #1 Rank stocks here. Stocks with the Favorable Combination
While an earnings beat appears uncertain for General Motors, here are a couple of players from the auto space, which, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:
Driven Brand Holdings has an Earnings ESP of +14.45% and a Zacks Rank #3.
The Zacks Consensus Estimate for Driven's to-be-reported quarter's earnings and revenues is pegged at 29 cents per share and $486 million, respectively. Encouragingly, DRVN surpassed earnings estimates in the last four quarters, with the average being 30.1%.
Lear Corp. has an Earnings ESP of +7.58% and a Zacks Rank #3.
The Zacks Consensus Estimate for Lear's to-be-reported quarter's earnings and revenues is pegged at $1.19 per share and $4.79 billion, respectively. LEA surpassed earnings estimates in three of the last four quarters and missed once, with the average being 6.53%.
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