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Bloomin' Brands and Lovesac have been highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – April 6, 2023 – Zacks Equity Research shares Bloomin’ Brands (BLMN - Free Report) as the Bull of the Day and The Lovesac Company (LOVE - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on W.W. Grainger (GWW - Free Report) , Atmos Energy (ATO - Free Report) and A. O. Smith (AOS - Free Report) .
Bloomin’ Brands is a Zacks Rank #1 (Strong Buy) that owns and operates casual, upscale casual, and fine dining restaurants.The company’s family of brands has expanded to include Carrabba's Italian Grill, Bonefish Grill, Fleming's Prime Steakhouse & Wine Bar, and Aussie Grill by Outback.
The stock has performed well in 2023, trading up as much as 40% after a solid earnings report back in February. However, the stock has dropped about 13% since those highs and investors are looking to buy the dip.
About the Company
Bloomin’ Brands was founded in 1988 and is based in Tampa, FL. The company operates through two segments, U.S. and International.
The stock has a Zacks Style Score of “A” in Value and “B” in Growth. Value investors like the name as the Forward PE is under 9.
BLMN currently employs approximately 87,000 Team Members and more than 1,450 restaurants worldwide. The company pays a dividend of 3.8%.
Q4 Earnings Beat
In mid-February, the company reported an earnings beat of 8%. This was the 12th straight EPS beat, a streak that started right after the COVID panic.
Looking at the quarter, the company reported EPS of $0.68 v the $0.63 expected. Revenues came just below expectations, but the company guided Q1 at $0.85-90, above the $0.85 expected. FY23 was guided higher, with the company now seeing a range of $2.91-$3.00 v the $2.67 expected.
Operating margins were up year over year despite significant inflation. The company raised their quarterly dividend by 71% and authorized a new $125M share repurchase program.
Analyst Estimates
Looking at analyst estimates since earnings, we see numbers ticking higher across most time frames.
Over the last 60 days, estimates for the current quarter have gone from $0.85 to $0.87. For next quarter, we see a 15% jump over that same time frame.
Looking at the bigger picture and the current year, we see estimates heading 9% higher over the last two months. Analyst have hiked from $2.67 to $2.93 since earnings were reported.
For next year, we see a similar move in estimates, with numbers headed from $2.83 to $3.09 since earnings. This is a move of 9% to the upside.
Since earnings, multiple analysts have taken price targets higher for BLMN. JPMorgan took theirs from $26 to $30, while Credit Suisse went from $27 to $31, Raymond James was the most bullish on the EPS report, going from $30 to $33 and rating BLMN with a Strong Buy.
The Technicals
The stock traded sideways for most of 2022, closing lower by about 4%. But the bulls came roaring in at the turn of the new year, talking the stock up 20%, from the $20 area to $24. When the company reported EPS in February, the stock further extended, hitting a high of $28.49.
Those highs made back in February were about 5% off the all-time highs, so investors are stalking the current pullback in anticipation that price can get back to those 2021 highs.
Drawing a Fibonacci retracement from the 2022 close to 2023 highs, we get a 50% retrace at the $24.30 level. This area has found buyers in the past and the 61.8% retracement at $23.30 is a level of interest as well.
If these levels were to fail, the bulls will likely support the 200-day at $22.
Bottom Line
Bloomin’ Brands has found its place in the casual dining market and is seeing success despite macro headwinds. For long-term investors, the stock is looking good on both the fundamental and technical sides.
Moreover, investors get paid a nice dividend and will see cash returned to shareholders in the form of stock buybacks. The bulls should expect the stock to trade back at all-time highs if markets can continue the positive 2023 trend.
The Lovesac Company is a Zacks Rank #5 (Strong Sell) that designs, manufactures, and sells furniture. The Company offers alternative furniture, sectionals, bean bags, bean bag chairs as well as other accessories such as blankets, footsacs and throw pillows.
The stock was a high flyer in the year after the pandemic. However, in 2022 the sellers knocked it down over 80% from all-time highs.
Lovesac has rallied since earnings, but investors might want to go into profit taking mode as earnings estimates continue to drop.
About the Company
Lovesac is headquartered in Samford, CT. The company was founded in 1995 and employs over 700 people.
The company markets its products primarily through lovesac.com website, as well as showrooms at top tier malls, lifestyle centers, mobile concierges, kiosks, and street locations in 40 states of the United States; and in store pop-up- shops and shop-in-shops.
Lovesac is valued at $450 million and has a Forward PE of 15. LOVE holds Zacks Style Scores of “A” in Growth, “B” in Value, but “F” in Momentum. The stock pays no dividend.
Q4 Earnings
Lovesac posted earnings in late March, just missing Zacks estimates. This was the first miss since late 2019.
On a positive note, revenues came in above expectations and SSS were up 36%. However, inventory increased due to stock inventory and freight capitalization costs.
The stock reacted positively to the earnings news and traded about 25% higher since the report. While LOVE is well off all-time highs, investors might be getting ahead of themselves as estimates continue to fall.
Estimates
Since earnings, the stock has seen analyst estimates drop across all time frames.
Over the last month, the current quarter has dropped from $0.03 to -$0.41. Next quarter's estimates are also falling, moving to $0.04 from $0.27, or 85%.
Looking longer term, next year’s estimates continue to trend lower. Over the last 90 days, estimates have been lowered from $4.31 to $2.79, a drop of 35%.
Clearly the up move in the stock has not yet reflected the drop in expected earnings.
Technical Take
The bulls can look at the chart and feel good for now. Price is trading above the 200-day and 50-day moving averages, which are both under the $27 level. The stock is also just off 2023 highs.
But one issue for the bulls is the $30 area which has been resistance multiple times this year and looks like a tough area to crack. If the stock fell back under the 200-day MA, we could see a quick flush to the $25 level and a move under $24 could motivate the bulls to take the name back to 2023 lows.
Summary
Lovesac was a former high flyer that was seeing a relief bounce. While the chart is looking better, earnings will not cooperate in upcoming quarters. The company might struggle over the short-term and the stock will likely follow suit.
Additional content:
3 Top Dividend Aristocrats to Buy as Fears of Recession Looms
Major bourses in the United States closed lower on Apr 4 as data indicated a cooling economy and reignited fears that the Federal Reserve’s aggressive monetary policies to curb decades-high inflation may lead to an imminent recession. Both the S&P 500 and the Dow ended a four-day winning run, while the tech-laden Nasdaq too finished in the negative territory.
Job openings in the United States for the month of February dropped to a 21-month low of 9.9 million, less than the revised 10.6 million in January, per the Labor Department. Analysts mostly estimated job openings to come in at 10.5 million in February.
Job openings have declined in some of the industries that have been hiring the most in recent times. Notable among them are professional businesses, retailers, restaurants, hotels, and transportation companies. Nonetheless, signs of softening of a rather strong labor market sparked worries about the broader health of the US economy.
Meanwhile, weakness in the manufacturing sector also deepened recession fears.According to the Commerce Department, orders for manufactured goods in the United States dropped 0.7% in February, more than analysts’ expectation of a fall of 0.6%.Factory orders have now dropped for the second straight month in February.
The decline in orders of transportation equipment largely contributed to the fall in overall factory orders. Barring transportation, U.S. factory orders were down 0.3% in February. The Institute of Supply Management (ISM), by the way, added that its index of new orders slipped to 44.3% in March from February’s 47%.
In reality, the ISM’s Manufacturing Purchasing Managers’ Index (PMI) dropped to 46.3% in March, its lowest since May 2020, when the coronavirus pandemic crushed economic growth. The ISM manufacturing PMI has now fallen for the fifth straight month, and the numbers are below 50%, signifying contraction.
Shrinking of new orders is largely associated with recession. Even though supply shortages are clearing up, yet, high-interest rates to tame inflation are impacting the near-term outlook for producers. As a result, many manufacturers are applying cost-cutting measures by implementing layoffs and freezing hiring.
Thus, with economic worries looming and the stock market subjected to bouts of volatility, astute investors should place their bets on dividend aristocrats like W.W. Grainger, Atmos Energy and A. O. Smith for steady income. This is because such stocks have strong underlying fundamentals and a better-quality business, and are unperturbed by market instability.
W.W. Grainger is a broad-line, business-to-business distributor of maintenance, repair and operating products and services. This Zacks Rank #1 (Strong Buy) company is known for having raised its dividend for 51 years in a row. You can see the complete list of today’s Zacks Rank #1 stocks here.
W.W. Grainger has a dividend yield of 1%. GWW’s payout ratio presently sits at 23% of earnings. In the past five years, GWW’s payout has advanced by 5.9%. Check W.W. Grainger’s dividend history here.
The Zacks Consensus Estimate for its current-year earnings has moved up 5.1% over the past 60 days. The company’s expected earnings growth rate for the current year is 12.2%.
Atmos Energy is engaged in the regulated natural gas distribution and storage business. This Zacks Rank #2 (Buy) company is known for having raised its dividend for over 25 consecutive years.
Atmos Energy has a dividend yield of 2.7%. ATO’s payout ratio presently sits at 52% of earnings. In the past five years, ATO’s payout has advanced by 9.1%. Check Atmos Energy’s dividend history here.
The Zacks Consensus Estimate for its current-year earnings has moved up 0.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 7.1%.
A. O. Smith is one of the leading manufacturers of commercial and residential water heating equipment, and water treatment products in the world. This Zacks Rank #2 (Buy) company is known for having raised its dividend for 29 successive years.
A. O. Smith has a dividend yield of 1.7%. AOS’ payout ratio presently sits at 38% of earnings. In the past five years, AOS’ payout has advanced by 9.9%. Check A. O. Smith’s dividend history here.
The Zacks Consensus Estimate for its current-year earnings has moved up 1.2% over the past 60 days. The company’s expected earnings growth rate for the current year is 6.4%.
Shares of W.W. Grainger, Atmos Energy, and A. O. Smith have already gained 161.4%, 72.2%, and 7.3% over the past three-year period.
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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Bloomin' Brands and Lovesac have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – April 6, 2023 – Zacks Equity Research shares Bloomin’ Brands (BLMN - Free Report) as the Bull of the Day and The Lovesac Company (LOVE - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on W.W. Grainger (GWW - Free Report) , Atmos Energy (ATO - Free Report) and A. O. Smith (AOS - Free Report) .
Here is a synopsis of all five stocks.
Bull of the Day:
Bloomin’ Brands is a Zacks Rank #1 (Strong Buy) that owns and operates casual, upscale casual, and fine dining restaurants.The company’s family of brands has expanded to include Carrabba's Italian Grill, Bonefish Grill, Fleming's Prime Steakhouse & Wine Bar, and Aussie Grill by Outback.
The stock has performed well in 2023, trading up as much as 40% after a solid earnings report back in February. However, the stock has dropped about 13% since those highs and investors are looking to buy the dip.
About the Company
Bloomin’ Brands was founded in 1988 and is based in Tampa, FL. The company operates through two segments, U.S. and International.
The stock has a Zacks Style Score of “A” in Value and “B” in Growth. Value investors like the name as the Forward PE is under 9.
BLMN currently employs approximately 87,000 Team Members and more than 1,450 restaurants worldwide. The company pays a dividend of 3.8%.
Q4 Earnings Beat
In mid-February, the company reported an earnings beat of 8%. This was the 12th straight EPS beat, a streak that started right after the COVID panic.
Looking at the quarter, the company reported EPS of $0.68 v the $0.63 expected. Revenues came just below expectations, but the company guided Q1 at $0.85-90, above the $0.85 expected. FY23 was guided higher, with the company now seeing a range of $2.91-$3.00 v the $2.67 expected.
Operating margins were up year over year despite significant inflation. The company raised their quarterly dividend by 71% and authorized a new $125M share repurchase program.
Analyst Estimates
Looking at analyst estimates since earnings, we see numbers ticking higher across most time frames.
Over the last 60 days, estimates for the current quarter have gone from $0.85 to $0.87. For next quarter, we see a 15% jump over that same time frame.
Looking at the bigger picture and the current year, we see estimates heading 9% higher over the last two months. Analyst have hiked from $2.67 to $2.93 since earnings were reported.
For next year, we see a similar move in estimates, with numbers headed from $2.83 to $3.09 since earnings. This is a move of 9% to the upside.
Since earnings, multiple analysts have taken price targets higher for BLMN. JPMorgan took theirs from $26 to $30, while Credit Suisse went from $27 to $31, Raymond James was the most bullish on the EPS report, going from $30 to $33 and rating BLMN with a Strong Buy.
The Technicals
The stock traded sideways for most of 2022, closing lower by about 4%. But the bulls came roaring in at the turn of the new year, talking the stock up 20%, from the $20 area to $24. When the company reported EPS in February, the stock further extended, hitting a high of $28.49.
Those highs made back in February were about 5% off the all-time highs, so investors are stalking the current pullback in anticipation that price can get back to those 2021 highs.
Drawing a Fibonacci retracement from the 2022 close to 2023 highs, we get a 50% retrace at the $24.30 level. This area has found buyers in the past and the 61.8% retracement at $23.30 is a level of interest as well.
If these levels were to fail, the bulls will likely support the 200-day at $22.
Bottom Line
Bloomin’ Brands has found its place in the casual dining market and is seeing success despite macro headwinds. For long-term investors, the stock is looking good on both the fundamental and technical sides.
Moreover, investors get paid a nice dividend and will see cash returned to shareholders in the form of stock buybacks. The bulls should expect the stock to trade back at all-time highs if markets can continue the positive 2023 trend.
Bear of the Day:
The Lovesac Company is a Zacks Rank #5 (Strong Sell) that designs, manufactures, and sells furniture. The Company offers alternative furniture, sectionals, bean bags, bean bag chairs as well as other accessories such as blankets, footsacs and throw pillows.
The stock was a high flyer in the year after the pandemic. However, in 2022 the sellers knocked it down over 80% from all-time highs.
Lovesac has rallied since earnings, but investors might want to go into profit taking mode as earnings estimates continue to drop.
About the Company
Lovesac is headquartered in Samford, CT. The company was founded in 1995 and employs over 700 people.
The company markets its products primarily through lovesac.com website, as well as showrooms at top tier malls, lifestyle centers, mobile concierges, kiosks, and street locations in 40 states of the United States; and in store pop-up- shops and shop-in-shops.
Lovesac is valued at $450 million and has a Forward PE of 15. LOVE holds Zacks Style Scores of “A” in Growth, “B” in Value, but “F” in Momentum. The stock pays no dividend.
Q4 Earnings
Lovesac posted earnings in late March, just missing Zacks estimates. This was the first miss since late 2019.
On a positive note, revenues came in above expectations and SSS were up 36%. However, inventory increased due to stock inventory and freight capitalization costs.
The stock reacted positively to the earnings news and traded about 25% higher since the report. While LOVE is well off all-time highs, investors might be getting ahead of themselves as estimates continue to fall.
Estimates
Since earnings, the stock has seen analyst estimates drop across all time frames.
Over the last month, the current quarter has dropped from $0.03 to -$0.41. Next quarter's estimates are also falling, moving to $0.04 from $0.27, or 85%.
Looking longer term, next year’s estimates continue to trend lower. Over the last 90 days, estimates have been lowered from $4.31 to $2.79, a drop of 35%.
Clearly the up move in the stock has not yet reflected the drop in expected earnings.
Technical Take
The bulls can look at the chart and feel good for now. Price is trading above the 200-day and 50-day moving averages, which are both under the $27 level. The stock is also just off 2023 highs.
But one issue for the bulls is the $30 area which has been resistance multiple times this year and looks like a tough area to crack. If the stock fell back under the 200-day MA, we could see a quick flush to the $25 level and a move under $24 could motivate the bulls to take the name back to 2023 lows.
Summary
Lovesac was a former high flyer that was seeing a relief bounce. While the chart is looking better, earnings will not cooperate in upcoming quarters. The company might struggle over the short-term and the stock will likely follow suit.
Additional content:
3 Top Dividend Aristocrats to Buy as Fears of Recession Looms
Major bourses in the United States closed lower on Apr 4 as data indicated a cooling economy and reignited fears that the Federal Reserve’s aggressive monetary policies to curb decades-high inflation may lead to an imminent recession. Both the S&P 500 and the Dow ended a four-day winning run, while the tech-laden Nasdaq too finished in the negative territory.
Job openings in the United States for the month of February dropped to a 21-month low of 9.9 million, less than the revised 10.6 million in January, per the Labor Department. Analysts mostly estimated job openings to come in at 10.5 million in February.
Job openings have declined in some of the industries that have been hiring the most in recent times. Notable among them are professional businesses, retailers, restaurants, hotels, and transportation companies. Nonetheless, signs of softening of a rather strong labor market sparked worries about the broader health of the US economy.
Meanwhile, weakness in the manufacturing sector also deepened recession fears.According to the Commerce Department, orders for manufactured goods in the United States dropped 0.7% in February, more than analysts’ expectation of a fall of 0.6%.Factory orders have now dropped for the second straight month in February.
The decline in orders of transportation equipment largely contributed to the fall in overall factory orders. Barring transportation, U.S. factory orders were down 0.3% in February. The Institute of Supply Management (ISM), by the way, added that its index of new orders slipped to 44.3% in March from February’s 47%.
In reality, the ISM’s Manufacturing Purchasing Managers’ Index (PMI) dropped to 46.3% in March, its lowest since May 2020, when the coronavirus pandemic crushed economic growth. The ISM manufacturing PMI has now fallen for the fifth straight month, and the numbers are below 50%, signifying contraction.
Shrinking of new orders is largely associated with recession. Even though supply shortages are clearing up, yet, high-interest rates to tame inflation are impacting the near-term outlook for producers. As a result, many manufacturers are applying cost-cutting measures by implementing layoffs and freezing hiring.
Thus, with economic worries looming and the stock market subjected to bouts of volatility, astute investors should place their bets on dividend aristocrats like W.W. Grainger, Atmos Energy and A. O. Smith for steady income. This is because such stocks have strong underlying fundamentals and a better-quality business, and are unperturbed by market instability.
W.W. Grainger is a broad-line, business-to-business distributor of maintenance, repair and operating products and services. This Zacks Rank #1 (Strong Buy) company is known for having raised its dividend for 51 years in a row. You can see the complete list of today’s Zacks Rank #1 stocks here.
W.W. Grainger has a dividend yield of 1%. GWW’s payout ratio presently sits at 23% of earnings. In the past five years, GWW’s payout has advanced by 5.9%. Check W.W. Grainger’s dividend history here.
The Zacks Consensus Estimate for its current-year earnings has moved up 5.1% over the past 60 days. The company’s expected earnings growth rate for the current year is 12.2%.
Atmos Energy is engaged in the regulated natural gas distribution and storage business. This Zacks Rank #2 (Buy) company is known for having raised its dividend for over 25 consecutive years.
Atmos Energy has a dividend yield of 2.7%. ATO’s payout ratio presently sits at 52% of earnings. In the past five years, ATO’s payout has advanced by 9.1%. Check Atmos Energy’s dividend history here.
The Zacks Consensus Estimate for its current-year earnings has moved up 0.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 7.1%.
A. O. Smith is one of the leading manufacturers of commercial and residential water heating equipment, and water treatment products in the world. This Zacks Rank #2 (Buy) company is known for having raised its dividend for 29 successive years.
A. O. Smith has a dividend yield of 1.7%. AOS’ payout ratio presently sits at 38% of earnings. In the past five years, AOS’ payout has advanced by 9.9%. Check A. O. Smith’s dividend history here.
The Zacks Consensus Estimate for its current-year earnings has moved up 1.2% over the past 60 days. The company’s expected earnings growth rate for the current year is 6.4%.
Shares of W.W. Grainger, Atmos Energy, and A. O. Smith have already gained 161.4%, 72.2%, and 7.3% over the past three-year period.
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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.