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Crocs and Yeti have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – April 4, 2023 – Zacks Equity Research shares Crocs (CROX - Free Report) as the Bull of the Day and Yeti (YETI - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Sunoco LP (SUN - Free Report) , CVR Energy, Inc. (CVI - Free Report) and Par Pacific Holdings, Inc. (PARR - Free Report) .
Crocs has been an extremely strong stock over the last five years and it has put on a stellar performance since the market lows in October 2022. Even more encouraging is that CROX’s earnings expectations have been continually revised higher by analysts, helping it capture a Zacks Rank #1 (Strong Buy).
Earnings Expectations
Analysts are in unanimous agreement in upgrading Crocs’ earnings expectations, and current year earnings have been revised higher by nearly 7% over the last 90 days. Additionally, in Q4 Crocs beat analyst expectations on both the top and bottom line and has now topped earnings estimates for 11 straight quarters.
Current quarter sales are expected to climb 29% YoY to $853 million, while full year sales are projected to grow 12.5% to $4 billion. Current quarter earnings, which have been revised higher by 10% over the last 90 days are expected to grow 6.4% YoY to $2.18 per share, and next year earnings are projected to grow 12% to $12.55 per share.
Brand
Crocs is one of the most popular footwear brands in the world. It is famous for its iconic clog made with extremely light and comfortable materials. The company offers a wide variety of footwear products including sandals, wedges, flip-flops, and slides that cater to people of all ages. Crocs’ products are available in more than 80 countries and are distributed via wholesale, retail, and e-commerce platforms.
Booming E-commerce Growth
Crocs has made significant progress on building out its e-commerce and omnichannel sales capabilities, with its internet sales helping really boost growth. Crocs has maintained its focus on brand strength by increasing its social media efforts with strategic collaborations, and influencer campaigns. CROX has also improved customer experience through its Crocs mobile app.
Digital sales advanced 80% year over year in Q4 and represented 45.1% of total revenues, up from last year’s Q4 figure of 40.3%.
Opportunities Abroad
While domestic sales growth was just 0.3%, Asia Pacific and EMEA regions saw booming progress. Asia Pacific experienced 59% YoY sales growth, while EMEA grew 60%. These two segments now make up 13% and 15% of total sales respectively.
In the Asia Pacific region, where the climate is considerably hotter, and per capita income lower, you must imagine Crocs products will be a natural fit for consumers with many years of adoption ahead.
Reasonable Valuation
Even after the phenomenal growth of the last few years CROX is still trading at a reasonable valuation. At 11x one-year forward earnings, it is well below its three-year median of 19x, and the industry average 14x.
Technical Setup
Another bullish catalyst for Crocs is this compelling technical chart pattern. Since the October low, CROX stock has been stair-stepping its way higher, consolidating and breaking out every couple months. Now, the price action has carved out a third consolidation, which should propel the stock considerably higher. The breakout will be confirmed if price can trade above $130. Alternatively, below $110 and the chart pattern is invalid.
Bottom Line
Crocs has become an iconic brand whose products are recognized around the world. Even still, the company seems to have many years of future growth to look forward to. With its well-rounded product line, digital-first focus, growing international adoption, and improving earnings outlook, Crocs should be on the top of your list of stocks to buy.
After exploding in popularity with its exceptionally well-engineered products it seems Yeti is experiencing a significant slowdown in sales and earnings growth. Analysts have revised earnings expectations lower across timeframes which has caused YETI to be downgraded to a Zacks Rank #5 (Strong Sell).
Brand
Yeti designs, markets, and distributes premium outdoor and recreational products. The primary drivers of sales are coolers and drinkware, which are top quality products and have attracted a cult following. But for now, it looks like consumers are pulling back on these types of purchases, as the economic environment has shifted considerably over the last year.
It should be noted that the average cost of a Yeti cooler is about $350, and prices can go as high as $1500, while the drinkware and jugs can go as high as $125.
Stock Performance
YETI stock has outperformed the broad market since IPO, albeit with extremely high volatility. The stock skyrocketed 500% off its lows following the Covid-19 pandemic only to collapse -75% in the 2022 bear market.
Slowing Growth
After experiencing tremendous progress in sales since 2019, growth has clearly stalled over the last three quarters. Earnings are following the same path and have declined in the last two quarters as well.
Next quarter sales are projected to be flat YoY, while earnings are expected to be down -77% YoY to $0.14 per share.
Prior to this slowdown in growth, YETI was regularly seeing sales increasing 20% or more QoQ, so this slowdown is a big change in direction.
Compressed margins
Further complicating the situation, Yeti has seen both gross and net margins collapse over the last few quarters. Profits have been negatively impacted by the rising costs of freight, and production costs, as well as a voluntary recall. Yeti had to recall nearly 2 million coolers in March 2023 because faulty magnets in the cooler’s closing mechanism posed risk of injury or death if accidentally ingested.
Valuation
Yeti is currently trading at a one-year forward earnings multiple of 20x, which is below its five-year median of 30x, and just above the broad market average of 19x. For a company that is facing flat sales and earnings growth it seems a bit expensive.
Bottom Line
Yeti is a business with great products that is bumping into some near-term obstacles. While it is very possible for the company to adjust its direction, and resume broad adoption there will need to be some changes internally before that happens. Additionally, as a premium product marketed to the mass market consumer, it is likely to experience continued slowing growth in the event of an economic downturn.
Additional content:
OPEC+ Cuts Production Targets: Time to Buy Oil Stocks?
The Organization of the Petroleum Exporting Countries (OPEC) has breathed new life into the energy sector, which has been languishing over the last few months on increased concerns about a global recession or slowdown that could further depress consumption and therefore, prices. The only hope was that the economy could somehow claw back without major mishap. But that too was dashed because of the bank failures. Their subsequent rescue did, however, re-instill some confidence, although it was a pretty bumpy ride in March.
For the same reasons, oil prices that the energy sector tracks, haven’t been too hot in recent history. Not, that is, until the Saudi Arabia announcement. The country has said it will cut production by 500,000 barrels per day (bpd) starting May, Iraq has agreed to cut by 200,000 bpd, UAE 144,000 bpd, Kuwait 128,000 bpd, Algeria 48,000 bpd and Oman 40,000 bpd. That means we are looking at a production cut of over a million bpd. After the announcement, both Brent and WTI shot up over 5% and are closing in on 6% as of this writing.
This is an obvious indication that at the risk of pushing the global economy into recession, oil-producing countries will move to protect prices. Energy cost being an important component of overall transportation costs thus impacts every sector. Therefore, inflation will be a tougher nut to crack, even with the Fed’s resolve. Especially at a time when China demand is roaring back and refineries are running at the kind of margins that makes them want to consume more and more crude.
As a result, many analysts who were expecting oil to close the year north of $90 a barrel are now projecting something closer to $100 by year end. So as you might expect, oil stocks are hot again. So let’s take a look at a few you may want to pick up today-
Sunoco LP
Sunoco is one of the biggest wholesale distributors of more than 10 motor fuel brands that are sourced from refiners and sold to roughly 10,000 customers in the U.S. including independent dealers, commercial customers, convenience stores and distributors. Many of its supply contracts are for the long term, which leads to relative stability in cash flows.
While its long-term agreements mean that production cuts and price hikes are not directly beneficial and may in fact be harmful if there is a recession that hurts volumes, this is a good defensive play in the current environment when we don’t really know what will happen in the next year, or even in the next six months.
In the last 60 days, the 2023 estimate increased a dime while the 2024 estimate increased a penny. So analysts too appear positive about the stock.
Zacks has a #1 (Strong Buy) rating and Value Score of A on the stock.
CVR Energy, Inc.
CVR engages in petroleum refining and nitrogen fertilizer manufacturing activity. The Petroleum segment caters to retailers, railroads, farm co-operatives and other refiners/marketers. The Nitrogen segment supplies agricultural and industrial customers. Given the shortage of key commodities in the world today as a result of geopolitical tensions, both segments are well positioned. This may not constitute growth from the very strong business levels in 2022, but business remains strong per se.
Analysts have raised the 2023 estimate by $1.03 (36.8%) in the last 60 days and there could be further upward revisions now. The 2024 estimate is up 15 cents (6.5%) in the same time period.
The stock carries a Zacks Rank #1 and an A each for Value, Growth and Momentum.
Par Pacific Holdings, Inc.
Par Pacific has refining, retail and logistics operations mainly in Hawaii, the Pacific Northwest, Wyoming and South Dakota. Its three refineries produce ultra-low sulfur diesel, gasoline, jet fuel, marine fuel, distillate, asphalt, low sulfur fuel oil and other associated refined products; the Retail segment operates 121 fuel retail outlets that also sell soft drinks, prepared foods and other sundries; and the logistics segment owns and operates terminals, pipelines, a single point mooring and trucking operations to distribute refined products. Therefore Par Pacific should gain from stronger pricing.
Analysts clearly like the company’s prospects. In the last 60 days, they have raised the 2023 estimate 65 cents (9.9%). The 2024 estimate is up 82 cents (21.1%).
Zacks has a #1 rank on the stock and has awarded an A for Value, Growth as well as Momentum.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. 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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Crocs and Yeti have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – April 4, 2023 – Zacks Equity Research shares Crocs (CROX - Free Report) as the Bull of the Day and Yeti (YETI - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Sunoco LP (SUN - Free Report) , CVR Energy, Inc. (CVI - Free Report) and Par Pacific Holdings, Inc. (PARR - Free Report) .
Here is a synopsis of all five stocks.
Bull of the Day:
Crocs has been an extremely strong stock over the last five years and it has put on a stellar performance since the market lows in October 2022. Even more encouraging is that CROX’s earnings expectations have been continually revised higher by analysts, helping it capture a Zacks Rank #1 (Strong Buy).
Earnings Expectations
Analysts are in unanimous agreement in upgrading Crocs’ earnings expectations, and current year earnings have been revised higher by nearly 7% over the last 90 days. Additionally, in Q4 Crocs beat analyst expectations on both the top and bottom line and has now topped earnings estimates for 11 straight quarters.
Current quarter sales are expected to climb 29% YoY to $853 million, while full year sales are projected to grow 12.5% to $4 billion. Current quarter earnings, which have been revised higher by 10% over the last 90 days are expected to grow 6.4% YoY to $2.18 per share, and next year earnings are projected to grow 12% to $12.55 per share.
Brand
Crocs is one of the most popular footwear brands in the world. It is famous for its iconic clog made with extremely light and comfortable materials. The company offers a wide variety of footwear products including sandals, wedges, flip-flops, and slides that cater to people of all ages. Crocs’ products are available in more than 80 countries and are distributed via wholesale, retail, and e-commerce platforms.
Booming E-commerce Growth
Crocs has made significant progress on building out its e-commerce and omnichannel sales capabilities, with its internet sales helping really boost growth. Crocs has maintained its focus on brand strength by increasing its social media efforts with strategic collaborations, and influencer campaigns. CROX has also improved customer experience through its Crocs mobile app.
Digital sales advanced 80% year over year in Q4 and represented 45.1% of total revenues, up from last year’s Q4 figure of 40.3%.
Opportunities Abroad
While domestic sales growth was just 0.3%, Asia Pacific and EMEA regions saw booming progress. Asia Pacific experienced 59% YoY sales growth, while EMEA grew 60%. These two segments now make up 13% and 15% of total sales respectively.
In the Asia Pacific region, where the climate is considerably hotter, and per capita income lower, you must imagine Crocs products will be a natural fit for consumers with many years of adoption ahead.
Reasonable Valuation
Even after the phenomenal growth of the last few years CROX is still trading at a reasonable valuation. At 11x one-year forward earnings, it is well below its three-year median of 19x, and the industry average 14x.
Technical Setup
Another bullish catalyst for Crocs is this compelling technical chart pattern. Since the October low, CROX stock has been stair-stepping its way higher, consolidating and breaking out every couple months. Now, the price action has carved out a third consolidation, which should propel the stock considerably higher. The breakout will be confirmed if price can trade above $130. Alternatively, below $110 and the chart pattern is invalid.
Bottom Line
Crocs has become an iconic brand whose products are recognized around the world. Even still, the company seems to have many years of future growth to look forward to. With its well-rounded product line, digital-first focus, growing international adoption, and improving earnings outlook, Crocs should be on the top of your list of stocks to buy.
Bear of the Day:
After exploding in popularity with its exceptionally well-engineered products it seems Yeti is experiencing a significant slowdown in sales and earnings growth. Analysts have revised earnings expectations lower across timeframes which has caused YETI to be downgraded to a Zacks Rank #5 (Strong Sell).
Brand
Yeti designs, markets, and distributes premium outdoor and recreational products. The primary drivers of sales are coolers and drinkware, which are top quality products and have attracted a cult following. But for now, it looks like consumers are pulling back on these types of purchases, as the economic environment has shifted considerably over the last year.
It should be noted that the average cost of a Yeti cooler is about $350, and prices can go as high as $1500, while the drinkware and jugs can go as high as $125.
Stock Performance
YETI stock has outperformed the broad market since IPO, albeit with extremely high volatility. The stock skyrocketed 500% off its lows following the Covid-19 pandemic only to collapse -75% in the 2022 bear market.
Slowing Growth
After experiencing tremendous progress in sales since 2019, growth has clearly stalled over the last three quarters. Earnings are following the same path and have declined in the last two quarters as well.
Next quarter sales are projected to be flat YoY, while earnings are expected to be down -77% YoY to $0.14 per share.
Prior to this slowdown in growth, YETI was regularly seeing sales increasing 20% or more QoQ, so this slowdown is a big change in direction.
Compressed margins
Further complicating the situation, Yeti has seen both gross and net margins collapse over the last few quarters. Profits have been negatively impacted by the rising costs of freight, and production costs, as well as a voluntary recall. Yeti had to recall nearly 2 million coolers in March 2023 because faulty magnets in the cooler’s closing mechanism posed risk of injury or death if accidentally ingested.
Valuation
Yeti is currently trading at a one-year forward earnings multiple of 20x, which is below its five-year median of 30x, and just above the broad market average of 19x. For a company that is facing flat sales and earnings growth it seems a bit expensive.
Bottom Line
Yeti is a business with great products that is bumping into some near-term obstacles. While it is very possible for the company to adjust its direction, and resume broad adoption there will need to be some changes internally before that happens. Additionally, as a premium product marketed to the mass market consumer, it is likely to experience continued slowing growth in the event of an economic downturn.
Additional content:
OPEC+ Cuts Production Targets: Time to Buy Oil Stocks?
The Organization of the Petroleum Exporting Countries (OPEC) has breathed new life into the energy sector, which has been languishing over the last few months on increased concerns about a global recession or slowdown that could further depress consumption and therefore, prices. The only hope was that the economy could somehow claw back without major mishap. But that too was dashed because of the bank failures. Their subsequent rescue did, however, re-instill some confidence, although it was a pretty bumpy ride in March.
For the same reasons, oil prices that the energy sector tracks, haven’t been too hot in recent history. Not, that is, until the Saudi Arabia announcement. The country has said it will cut production by 500,000 barrels per day (bpd) starting May, Iraq has agreed to cut by 200,000 bpd, UAE 144,000 bpd, Kuwait 128,000 bpd, Algeria 48,000 bpd and Oman 40,000 bpd. That means we are looking at a production cut of over a million bpd. After the announcement, both Brent and WTI shot up over 5% and are closing in on 6% as of this writing.
This is an obvious indication that at the risk of pushing the global economy into recession, oil-producing countries will move to protect prices. Energy cost being an important component of overall transportation costs thus impacts every sector. Therefore, inflation will be a tougher nut to crack, even with the Fed’s resolve. Especially at a time when China demand is roaring back and refineries are running at the kind of margins that makes them want to consume more and more crude.
As a result, many analysts who were expecting oil to close the year north of $90 a barrel are now projecting something closer to $100 by year end. So as you might expect, oil stocks are hot again. So let’s take a look at a few you may want to pick up today-
Sunoco LP
Sunoco is one of the biggest wholesale distributors of more than 10 motor fuel brands that are sourced from refiners and sold to roughly 10,000 customers in the U.S. including independent dealers, commercial customers, convenience stores and distributors. Many of its supply contracts are for the long term, which leads to relative stability in cash flows.
While its long-term agreements mean that production cuts and price hikes are not directly beneficial and may in fact be harmful if there is a recession that hurts volumes, this is a good defensive play in the current environment when we don’t really know what will happen in the next year, or even in the next six months.
In the last 60 days, the 2023 estimate increased a dime while the 2024 estimate increased a penny. So analysts too appear positive about the stock.
Zacks has a #1 (Strong Buy) rating and Value Score of A on the stock.
CVR Energy, Inc.
CVR engages in petroleum refining and nitrogen fertilizer manufacturing activity. The Petroleum segment caters to retailers, railroads, farm co-operatives and other refiners/marketers. The Nitrogen segment supplies agricultural and industrial customers. Given the shortage of key commodities in the world today as a result of geopolitical tensions, both segments are well positioned. This may not constitute growth from the very strong business levels in 2022, but business remains strong per se.
Analysts have raised the 2023 estimate by $1.03 (36.8%) in the last 60 days and there could be further upward revisions now. The 2024 estimate is up 15 cents (6.5%) in the same time period.
The stock carries a Zacks Rank #1 and an A each for Value, Growth and Momentum.
Par Pacific Holdings, Inc.
Par Pacific has refining, retail and logistics operations mainly in Hawaii, the Pacific Northwest, Wyoming and South Dakota. Its three refineries produce ultra-low sulfur diesel, gasoline, jet fuel, marine fuel, distillate, asphalt, low sulfur fuel oil and other associated refined products; the Retail segment operates 121 fuel retail outlets that also sell soft drinks, prepared foods and other sundries; and the logistics segment owns and operates terminals, pipelines, a single point mooring and trucking operations to distribute refined products. Therefore Par Pacific should gain from stronger pricing.
Analysts clearly like the company’s prospects. In the last 60 days, they have raised the 2023 estimate 65 cents (9.9%). The 2024 estimate is up 82 cents (21.1%).
Zacks has a #1 rank on the stock and has awarded an A for Value, Growth as well as Momentum.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
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.