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ADT and CarMax have been highlighted as Zacks Bull and Bear of the Day

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For Immediate Release

Chicago, IL – December 29, 2022 – Zacks Equity Research shares ADT (ADT - Free Report) as the Bull of the Day and CarMax (KMX - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Yield10 Bioscience, Inc. (YTEN - Free Report) , The Alkaline Water Company Inc. (WTER - Free Report) and Benson Hill, Inc. (BHIL - Free Report) .

Here is a synopsis of all five stocks.

Bull of the Day:

The Zacks Rank helps investors uncover stocks with strong earnings trends. Just a quick peek at the Zacks Rank tells the earnings story. Stocks which are Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy) stocks have stronger earnings trends than most stocks in the market. This tool helped me uncover today’s Bull of the Day, ADT.

ADT is a well-known and trusted provider of security and home automation services. The company has a long history, dating back to 1874, of protecting homes and businesses from burglaries, fires, and other emergencies.

In recent years, ADT has continued to innovate and expand its offerings. In addition to traditional security services such as burglar alarms and fire alarms, the company now offers a range of home automation products such as smart thermostats, smart locks, and smart lighting systems. These products allow customers to control their homes remotely and monitor their energy usage.

ADT's services are available through a network of authorized dealers and installation professionals who work with customers to design custom security solutions. The company also has a 24/7 monitoring center that responds to emergencies and alerts customers when there is a problem.

One of the key factors driving ADT's success is its strong brand recognition and customer loyalty. The company has a long history of providing reliable security services and has a reputation for excellent customer service. This has allowed ADT to attract and retain a large customer base, which has helped to drive growth and profitability.

Looking ahead, ADT is well-positioned to continue growing and expanding its business. The demand for home security and home automation products is expected to increase in the coming years, and ADT is well-positioned to meet this demand with its wide range of products and services.

The reason for the favorable Zacks Rank is that analysts have recently increased their earnings estimates for the current year and next year. The bullish moves have taken our Zacks Consensus Estimates for the current year from 17 cents to 51 cents while next year’s number is up from 27 cents to 78 cents.

Bear of the Day:

The car market is dying down. The wunderkinds of last year are becoming the face of the bear market now. Earnings are moving in the wrong direction. The Zacks Rank helps point out industries and stocks where earnings estimates are moving south. It helped me uncover today’s Bear of the Day, CarMax.

CarMax is a leading used car retailer in the United States. The company operates a network of over 200 stores across the country and has a strong online presence through its website, Carmax is known for its wide selection of high-quality used cars, as well as its no-haggle pricing and customer-friendly shopping experience.

In recent years, CarMax has experienced strong growth and financial performance. The company has consistently reported increasing revenues and earnings, and has a strong balance sheet with low levels of debt.

However, the company is facing some challenges in the near term that could negatively impact its earnings. One of the main factors is the slowdown in the used car market. The demand for used cars has been strong in recent years, but there are signs that this demand may be slowing down. This could lead to lower sales and revenues for CarMax, as well as lower profit margins.

Another factor that could impact CarMax’s earnings is the increasing competition in the used car market. There are a number of new players entering the market, and these companies are offering more competitive pricing and a wider range of services. This could make it more difficult for CarMax to maintain its market share and profitability.

CarMax has dropped to a Zacks Rank #5 (Strong Sell) because four analysts have cut their earnings expectations for the current year and next year. The bearish moves have cut our Zacks Consensus Estimates for the current year from $5.67 to $3.25 while next year’s number is off from $6.21 to $3.65. That represents an earnings contraction of 52% this year.

The Automotive – Retail and Wholesale – Parts industry ranks in the Bottom 29% of our Zacks Industry Rank.

Additional content:

3 Under $3 Consumer Staples Stocks Wall Street Recommends

Given the current market volatility marked by a high inflationary environment and recession fears, investing in safe havens and at lower prices appears to be a prudent thing to do. Talking of safe zones, there is no better space than the Consumer Staples sector, popularly known as the defensive spot.

As demand for staple products remains fairly stable, companies in the space remain relatively well placed even during economic downturns and market turbulence. The sector has always been a go-to place for investors, as it offers growth irrespective of the state of the economy. Notably, the Zacks Consumer Staples sector has rallied close to 12% in the past three months, outperforming the S&P 500’s gain of around 5%.

We believe the sector remains well placed for 2023 on the back of favorable demand and companies’ constant focus on undertaking innovation and other brand-building efforts to make the most of it. Companies (including food and beverage players) have been particularly investing in healthy offerings, given consumers’ rising inclination toward health and wellness (all the more since the pandemic).

While consumer staple companies are not immune to input cost inflation, tough labor market and supply-chain bottlenecks, players in the space have been undertaking robust pricing actions to counter the inflationary headwinds. Solid saving, restructuring and productivity measures have also been working well.

Getting to Our Picks

Investing in low-priced Consumer Staple stocks seems to be a good idea as we are about to enter 2023. Add to it, adhering to Wall Street recommendations makes it even safer.

On that note, we have highlighted three Consumer Staple stocks (using the Zacks Stock Screener), which boast strong fundamentals and are well-positioned for growth in the new year.  These stocks are priced below $3 and carry an average brokerage (ABR) recommendation of <=2. Additionally, these stocks flaunt a Zacks Rank 1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

3 Great Choices

Yield10 Bioscience, Inc.carries a Zacks Rank #2. Currently trading at $1.74, it has an ABR of 1 on a scale of 1 to 5. Based on these analyst projections, we expect an average price target of $12.25, suggesting a 512.5% upside to the current closing price. The company’s prospects look bright, given the favorable demand for low-carbon index feedstock oil for biofuels. To this end, Yield10 Bioscience’s focus on developing and commercializing Camelina as a new industrial crop bodes well. YTEN has been undertaking robust market development initiatives to fuel expansion.

Yield10 Bioscience is engaged in developing enhanced oilseed Camelina sativa for the production of proprietary seed products, alongside discovering high-value genetic traits for the agriculture and food spaces. The Zacks Consensus Estimate for YTEN’s 2023 bottom line has improved from a loss of $1.98 per share to a loss of $1.84 over the past 60 days, indicating 30.8% growth year over year.

The Alkaline Water Company Inc. produces, distributes, and markets bottled alkaline water. The company’s Pathway to Profitability strategy has been working well. Additionally, The Alkaline Water Company has been benefiting from continued expansion in the retail channel, thanks to its solid brand image in the beverage category. On its last earnings call, management stated that it remains encouraged and positive about YTEN’s prospects.

The Alkaline Water Company’s 2023 bottom line has improved from a loss of 11 cents per share to a loss of 9 cents in the past 60 days, indicating 52.6% growth year over year. Currently trading at 16.73 cents, it has an ABR of 1.00 on a scale of 1 to 5. Based on these analyst projections, we expect an average price target of $1.50, suggesting a 733.3% upside to the current closing price.

Benson Hill, Inc. is worth a shot. The food technology company’s Ingredients segment has been performing well. On its third-quarter 2022 earnings call, management raised its Ingredients segment full-year guidance on the back of robust demand for non-proprietary ingredient soy and yellow pea products.  It also pulled up its gross profit view owing to accelerated top-line growth and expectations of enhanced operating efficiencies. Focus on innovation also keeps the company well-placed for growth.

Currently trading at $2.23, BHIL has an ABR of 1.00 on a scale of 1 to 5. Based on analyst estimates, we expect an average price target of $6, suggesting a nearly 162% upside to the current closing price. The Zacks Consensus Estimate for Benson Hill’s 2023 bottom line has improved from a loss of 76 cents per share to a loss of 63 cents in the past 60 days.

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