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EnLink Midstream and Ball Corporation have been highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – November 8, 2022 – Zacks Equity Research shares EnLink Midstream (ENLC - Free Report) as the Bull of the Day and Ball Corporation (BALL - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Fox Corporation (FOXA - Free Report) , VIZIO (VZIO - Free Report) and DraftKings (DKNG - Free Report) .
EnLink Midstream, a Zacks Rank #1 (Strong Buy) stock, has benefitted immensely from the commodity price surge this year. After falling under $1/share during the initial onset of the coronavirus pandemic, the stock has surged over 1,500% since March 2020 and continues to make a series of higher highs. Only stocks that are garnering extreme buying pressure are able to make this type of price move, going from penny stock to double digits in just a two-year time span. ENLC is currently trading near new highs on the year, even as the market continues to hover in a correction.
ENLC boasts our highest-possible ‘A’ ratings for each of our Zacks Growth and Momentum Style Score categories, indicating a strong likelihood that the stock propels higher on the powerful combination of positive earnings estimate revisions and stock price performance. The company is a component of the Zacks Oil & Gas – Refining & Marketing industry, which ranks in the top 2% of all Zacks Ranked Industries. The group is up more than 43% this year while the S&P is down more than 20%.
Quantitative research studies have repeatedly shown that roughly half of a stock’s future price appreciation is due to its industry grouping. Because this group is ranked in the top half of all Zacks Ranked Industries, we expect it to outperform the market over the next 3 to 6 months. By targeting stocks contained within top industry groups, investors can dramatically improve their rate of success.
Company Description
EnLink Midstream, LLC provides midstream energy services domestically. The company is engaged in the gathering, processing, transporting, storing, and selling of natural gas and crude oil. Its midstream network includes over 12,000 miles of pipelines and more than 20 natural gas processing plants.
ENLC is also involved in carbon capture, in an effort to obtain real progress in terms of the decarbonization of the global economy. Just last month, the company announced that it entered a transportation service agreement with a subsidiary of ExxonMobil, where it will utilize portions of its existing pipeline network as well as new facilities to deliver carbon dioxide from the Mississippi River corridor to ExxonMobil’s carbon dioxide storage location.
Earnings Trends and Future Estimates
ENLC has exceeded earnings estimates in each of the past four quarters, sporting an average 92.58% beat over that timeframe. Last week, the oil and gas company reported third-quarter earnings of $0.18 cents per share, which translated to a 63.64% positive surprise versus the $0.11/share consensus estimate.
Looking ahead, earnings estimates for the current quarter as well as 2023 have been skyrocketing. Analysts are in agreement and in the past 30 days, Q4 EPS estimates have been increased by 25% to $0.15 per share. This reflects a 36.4% growth rate relative to the same quarter last year. It’s obvious the growth is there and looks set to continue.
Charting the Course
ENLC has continued its winning ways over the past few months while the market has been in correction mode. This is the kind of stock we want to include in our portfolio – one that is trending well and experiencing positive earnings estimate revisions. The stock has soared more than 80% this year and continues to make a series of higher highs. Only stocks that are in extremely powerful uptrends are able to weather bear markets so gracefully.
Notice how the 50 and 200-day moving averages as evidenced by the blue and red lines, respectively, are both sloping up. The stock is displaying relative strength versus the market – a bullish sign.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. And as we know, EnLink Midstream has seen a steady batch of positive revisions as of late. As long as this trend remains intact (and ENLC continues to post earnings beats), the stock should continue its bullish run through the end of this year and beyond.
Bottom Line
With a history of surpassing earnings estimates and an improving future outlook, EnLink Midstream represents a great opportunity. With a $0.45 (3.81%) dividend yield, it’s not difficult to see why this stock is a compelling investment.
Solid institutional buying and a high-performing industry group should continue to provide a tailwind for the stock price. Recent positive earnings estimate revisions will help to provide a cushion during any further market decline. If you’re looking for a way to diversify your portfolio, make sure to put ENLC on your shortlist.
Ball Corporation supplies aluminum packaging products for the beverage, personal care, and household industries globally. The company manufactures and sells aluminum containers of carbonated soft drinks, beer, energy drinks, and related beverages. BALL also develops sensors and instruments, radio frequency systems, and other technologies for the civil and national security aerospace markets to governmental and commercial customers. Ball Corp. was founded in 1880 and is based in Westminster, CO.
The Zacks Rundown
BALL is part of the Zacks Containers – Metal and Glass industry group, which currently ranks in the bottom 1% out of approximately 250 industry groups. Because this industry is ranked in the bottom half of all Zacks Ranked Industries, we expect it to underperform the market over the next 3 to 6 months. This industry has widely underperformed the market this year with a -34% return year-to-date.
Candidates in the bottom tiers of industry groups can often represent solid potential short candidates. While individual stocks have the ability to outperform even when included in poor-performing industries, their industry association serves as a headwind for any potential rallies. BALL is fighting an uphill battle and the stock is confirming this notion as it continues to make a series of lower lows.
Despite this year’s price decline, BALL is still overvalued relative to its industry group, irrespective of the metric used.
Weak Foundation: Falling Short on Earnings and Deteriorating Forecasts
Earnings misses have been a sore spot for BALL during the past year. The packaging company has fallen short of estimates in three of the past four quarters. BALL most recently reported Q3 EPS last week of $0.75, missing the $0.76 consensus estimate by -1.32%.
BALL has posted an average earnings miss of -2.42% over the past four quarters. This is the type of negative trend that the bears like to see. Consistently missing earnings estimates is a recipe for stock price underperformance, and BALL is no exception.
Analysts have been revising earnings estimates downward as of late. For the current quarter, estimates have been slashed -11.49% over the past 60 days. The Q4 Zacks Consensus EPS Estimate now stands at $0.77, translating to a -20.62% earnings regression relative to the same quarter last year.
Technical Outlook
BALL stock has been steadily falling since last year and has now established a well-defined downtrend. Notice how both the 50-day (blue line) and 200-day (red line) moving averages are sloping down. Shares have declined more than 45% this year. The stock continues to trade below both averages, while the 50-day moving average has acted as steady resistance throughout the down move.
BALL has continued to make a series of lower lows during the fourth quarter, even as many stocks have shown strength.
Final Thoughts
The recent earnings misses in addition to deteriorating estimates are both huge red flags and need to be respected. These will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend.
BALL’s characteristics have resulted in a worst-possible Zacks Growth Style Score of ‘F,’ indicating further downside is likely. The fact that BALL is included in a bottom-performing industry group simply adds to the growing list of concerns. Investors will want to steer clear of BALL until the situation shows major signs of improvement, or possibly include it as part of a hedge or short strategy.
Additional content:
Fox to Buy a Stake in FanDuel
Fox Corporation has recently received a green flag towards buying a stake in FanDuel, one of the biggest brands in U.S. online gambling.
Fox had been facing a dispute with Flutter, the parent organization of FanDuel, over this deal over the past year, as the latter was demanding too high a price for an option to buy an 18.6% stake in FanDuel.
However, recently, an arbitrator has ruled that Fox has the option to buy a stake in sports-betting operator FanDuel Group from parent company Flutter for about $3.7 billion.
This comes as a strong tailwind for Fox as the deal would aid the performance of Fox Bet, the online sports betting brand of Fox, which has been struggling as it failed to gain traction in the U.S. betting market due to its poor reach and tech.
The deal would help Fox in successfully diversifying itself into the booming wagering business which per Custom Markets Insight is expected to reach around USD 145.6 Billion by 2030 at a CAGR of 12%.
Fox to Bolster Growth with Other M&A’s and Partnerships
Fox Corp recently announced its merger with News Corp. This merger would bring back high-profile business divisions under one roof after a split in 2013. Fox’s Fox News, Fox broadcast network, local TV stations and the Tubi streaming service would be combined with News Corp’s Dow Jones, The Wall Street Journal, as well as other assets, including HarperCollins Publishers and news organizations in the United Kingdom and Australia.
This would diversify and broaden the portfolio of Fox Corporation, hence gaining traction with more customers and adding new sources of revenue.
Fox has also entered a multi-year deal with VIZIO to expand its distribution partnership. The Fox Sports app will now be available on VIZIO smart TVs along with the Fox Weather channel being added to VIZIO WatchFree+ besides existing Fox ad-supported LiveNOW and Fox Soul. VIZIO Ads will also have access to Fox’s premium inventory for audience-based opportunities with advertisers.
In August, Fox announced the completion of a multi-year renewal of its distribution agreement with Verizon for its Fios TV platform.
The agreement included the continued distribution of the entire portfolio of FOX brands, including FOX News Media, FOX Sports, FOX Network and local FOX O&O TV stations in markets including New York, Washington, D.C. and Philadelphia. FOX Weather has also been added to the Fios TV lineup and Tubi is included in both Fios TV set-top boxes, as well as on many other platforms.
Threats Attached to the Deals
These mergers and acquisitions and partnerships are expected to bolster Fox’s top line, but they also bring certain headwinds for the company. The wagering business, into which Fox is expanding, is highly competitive with companies like DraftKings having already established a secure market position in the sports betting industry.
DraftKings is focusing on its iGaming products as it launched a sportsbook in Kansas at the start of this month. Its Same Game Parlay, which allows multiple betting outcomes from the same game into one parlay bet and feature enhancements like the Web3 strategy, has gained significant anticipation among players.
The merger with News Corporation also brings some risks for Fox. Readers’ preference for accessing news online, mostly free, has made News Corporation’s print-advertising model increasingly redundant. Besides, a major portion of News Corporation’s total revenues is generated outside the United States. The ongoing foreign exchange fluctuation or the U.S. dollar gaining strength may hurt both the top and bottom lines of the company.
This has not boded well among the investors. The shares of Fox Corporation, which currently holds a Zacks Rank #3 (Hold), have declined 19.1% year to date compared to Zacks Consumer Discretionary Sector, which fell 38.4%.
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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EnLink Midstream and Ball Corporation have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – November 8, 2022 – Zacks Equity Research shares EnLink Midstream (ENLC - Free Report) as the Bull of the Day and Ball Corporation (BALL - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Fox Corporation (FOXA - Free Report) , VIZIO (VZIO - Free Report) and DraftKings (DKNG - Free Report) .
Here is a synopsis of all five stocks.
Bull of the Day:
EnLink Midstream, a Zacks Rank #1 (Strong Buy) stock, has benefitted immensely from the commodity price surge this year. After falling under $1/share during the initial onset of the coronavirus pandemic, the stock has surged over 1,500% since March 2020 and continues to make a series of higher highs. Only stocks that are garnering extreme buying pressure are able to make this type of price move, going from penny stock to double digits in just a two-year time span. ENLC is currently trading near new highs on the year, even as the market continues to hover in a correction.
ENLC boasts our highest-possible ‘A’ ratings for each of our Zacks Growth and Momentum Style Score categories, indicating a strong likelihood that the stock propels higher on the powerful combination of positive earnings estimate revisions and stock price performance. The company is a component of the Zacks Oil & Gas – Refining & Marketing industry, which ranks in the top 2% of all Zacks Ranked Industries. The group is up more than 43% this year while the S&P is down more than 20%.
Quantitative research studies have repeatedly shown that roughly half of a stock’s future price appreciation is due to its industry grouping. Because this group is ranked in the top half of all Zacks Ranked Industries, we expect it to outperform the market over the next 3 to 6 months. By targeting stocks contained within top industry groups, investors can dramatically improve their rate of success.
Company Description
EnLink Midstream, LLC provides midstream energy services domestically. The company is engaged in the gathering, processing, transporting, storing, and selling of natural gas and crude oil. Its midstream network includes over 12,000 miles of pipelines and more than 20 natural gas processing plants.
ENLC is also involved in carbon capture, in an effort to obtain real progress in terms of the decarbonization of the global economy. Just last month, the company announced that it entered a transportation service agreement with a subsidiary of ExxonMobil, where it will utilize portions of its existing pipeline network as well as new facilities to deliver carbon dioxide from the Mississippi River corridor to ExxonMobil’s carbon dioxide storage location.
Earnings Trends and Future Estimates
ENLC has exceeded earnings estimates in each of the past four quarters, sporting an average 92.58% beat over that timeframe. Last week, the oil and gas company reported third-quarter earnings of $0.18 cents per share, which translated to a 63.64% positive surprise versus the $0.11/share consensus estimate.
Looking ahead, earnings estimates for the current quarter as well as 2023 have been skyrocketing. Analysts are in agreement and in the past 30 days, Q4 EPS estimates have been increased by 25% to $0.15 per share. This reflects a 36.4% growth rate relative to the same quarter last year. It’s obvious the growth is there and looks set to continue.
Charting the Course
ENLC has continued its winning ways over the past few months while the market has been in correction mode. This is the kind of stock we want to include in our portfolio – one that is trending well and experiencing positive earnings estimate revisions. The stock has soared more than 80% this year and continues to make a series of higher highs. Only stocks that are in extremely powerful uptrends are able to weather bear markets so gracefully.
Notice how the 50 and 200-day moving averages as evidenced by the blue and red lines, respectively, are both sloping up. The stock is displaying relative strength versus the market – a bullish sign.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. And as we know, EnLink Midstream has seen a steady batch of positive revisions as of late. As long as this trend remains intact (and ENLC continues to post earnings beats), the stock should continue its bullish run through the end of this year and beyond.
Bottom Line
With a history of surpassing earnings estimates and an improving future outlook, EnLink Midstream represents a great opportunity. With a $0.45 (3.81%) dividend yield, it’s not difficult to see why this stock is a compelling investment.
Solid institutional buying and a high-performing industry group should continue to provide a tailwind for the stock price. Recent positive earnings estimate revisions will help to provide a cushion during any further market decline. If you’re looking for a way to diversify your portfolio, make sure to put ENLC on your shortlist.
Bear of the Day:
Ball Corporation supplies aluminum packaging products for the beverage, personal care, and household industries globally. The company manufactures and sells aluminum containers of carbonated soft drinks, beer, energy drinks, and related beverages. BALL also develops sensors and instruments, radio frequency systems, and other technologies for the civil and national security aerospace markets to governmental and commercial customers. Ball Corp. was founded in 1880 and is based in Westminster, CO.
The Zacks Rundown
BALL is part of the Zacks Containers – Metal and Glass industry group, which currently ranks in the bottom 1% out of approximately 250 industry groups. Because this industry is ranked in the bottom half of all Zacks Ranked Industries, we expect it to underperform the market over the next 3 to 6 months. This industry has widely underperformed the market this year with a -34% return year-to-date.
Candidates in the bottom tiers of industry groups can often represent solid potential short candidates. While individual stocks have the ability to outperform even when included in poor-performing industries, their industry association serves as a headwind for any potential rallies. BALL is fighting an uphill battle and the stock is confirming this notion as it continues to make a series of lower lows.
Despite this year’s price decline, BALL is still overvalued relative to its industry group, irrespective of the metric used.
Weak Foundation: Falling Short on Earnings and Deteriorating Forecasts
Earnings misses have been a sore spot for BALL during the past year. The packaging company has fallen short of estimates in three of the past four quarters. BALL most recently reported Q3 EPS last week of $0.75, missing the $0.76 consensus estimate by -1.32%.
BALL has posted an average earnings miss of -2.42% over the past four quarters. This is the type of negative trend that the bears like to see. Consistently missing earnings estimates is a recipe for stock price underperformance, and BALL is no exception.
Analysts have been revising earnings estimates downward as of late. For the current quarter, estimates have been slashed -11.49% over the past 60 days. The Q4 Zacks Consensus EPS Estimate now stands at $0.77, translating to a -20.62% earnings regression relative to the same quarter last year.
Technical Outlook
BALL stock has been steadily falling since last year and has now established a well-defined downtrend. Notice how both the 50-day (blue line) and 200-day (red line) moving averages are sloping down. Shares have declined more than 45% this year. The stock continues to trade below both averages, while the 50-day moving average has acted as steady resistance throughout the down move.
BALL has continued to make a series of lower lows during the fourth quarter, even as many stocks have shown strength.
Final Thoughts
The recent earnings misses in addition to deteriorating estimates are both huge red flags and need to be respected. These will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend.
BALL’s characteristics have resulted in a worst-possible Zacks Growth Style Score of ‘F,’ indicating further downside is likely. The fact that BALL is included in a bottom-performing industry group simply adds to the growing list of concerns. Investors will want to steer clear of BALL until the situation shows major signs of improvement, or possibly include it as part of a hedge or short strategy.
Additional content:
Fox to Buy a Stake in FanDuel
Fox Corporation has recently received a green flag towards buying a stake in FanDuel, one of the biggest brands in U.S. online gambling.
Fox had been facing a dispute with Flutter, the parent organization of FanDuel, over this deal over the past year, as the latter was demanding too high a price for an option to buy an 18.6% stake in FanDuel.
However, recently, an arbitrator has ruled that Fox has the option to buy a stake in sports-betting operator FanDuel Group from parent company Flutter for about $3.7 billion.
This comes as a strong tailwind for Fox as the deal would aid the performance of Fox Bet, the online sports betting brand of Fox, which has been struggling as it failed to gain traction in the U.S. betting market due to its poor reach and tech.
The deal would help Fox in successfully diversifying itself into the booming wagering business which per Custom Markets Insight is expected to reach around USD 145.6 Billion by 2030 at a CAGR of 12%.
Fox to Bolster Growth with Other M&A’s and Partnerships
Fox Corp recently announced its merger with News Corp. This merger would bring back high-profile business divisions under one roof after a split in 2013. Fox’s Fox News, Fox broadcast network, local TV stations and the Tubi streaming service would be combined with News Corp’s Dow Jones, The Wall Street Journal, as well as other assets, including HarperCollins Publishers and news organizations in the United Kingdom and Australia.
This would diversify and broaden the portfolio of Fox Corporation, hence gaining traction with more customers and adding new sources of revenue.
Fox Corporation price-consensus-chart | Fox Corporation Quote
Fox has also entered a multi-year deal with VIZIO to expand its distribution partnership. The Fox Sports app will now be available on VIZIO smart TVs along with the Fox Weather channel being added to VIZIO WatchFree+ besides existing Fox ad-supported LiveNOW and Fox Soul. VIZIO Ads will also have access to Fox’s premium inventory for audience-based opportunities with advertisers.
In August, Fox announced the completion of a multi-year renewal of its distribution agreement with Verizon for its Fios TV platform.
The agreement included the continued distribution of the entire portfolio of FOX brands, including FOX News Media, FOX Sports, FOX Network and local FOX O&O TV stations in markets including New York, Washington, D.C. and Philadelphia. FOX Weather has also been added to the Fios TV lineup and Tubi is included in both Fios TV set-top boxes, as well as on many other platforms.
Threats Attached to the Deals
These mergers and acquisitions and partnerships are expected to bolster Fox’s top line, but they also bring certain headwinds for the company. The wagering business, into which Fox is expanding, is highly competitive with companies like DraftKings having already established a secure market position in the sports betting industry.
DraftKings is focusing on its iGaming products as it launched a sportsbook in Kansas at the start of this month. Its Same Game Parlay, which allows multiple betting outcomes from the same game into one parlay bet and feature enhancements like the Web3 strategy, has gained significant anticipation among players.
The merger with News Corporation also brings some risks for Fox. Readers’ preference for accessing news online, mostly free, has made News Corporation’s print-advertising model increasingly redundant. Besides, a major portion of News Corporation’s total revenues is generated outside the United States. The ongoing foreign exchange fluctuation or the U.S. dollar gaining strength may hurt both the top and bottom lines of the company.
This has not boded well among the investors. The shares of Fox Corporation, which currently holds a Zacks Rank #3 (Hold), have declined 19.1% year to date compared to Zacks Consumer Discretionary Sector, which fell 38.4%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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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.
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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.