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Uber Technologies and Paramount Global have been highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – September 5, 2023 – Zacks Equity Research shares Uber Technologies (UBER - Free Report) as the Bull of the Day and Paramount Global (PARA - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Shell plc (SHEL - Free Report) , Eni SpA (E - Free Report) and Enbridge Inc (ENB - Free Report) .
Zacks Rank #1 stock (Strong Buy) Uber Technologies is the worldwide leader in ridesharing services through its Uber mobile application.Uber is also a market leader in the food delivery business through its "Uber Eats" service and the freight business through its "Mobility" operations. Since going public in 2019, Uber investors have been subject to a wild, volatile ride. The company fell victim to COVID-19 restrictions, two brutal bear markets, and a market environment that has not been kind to IPOs. However, in 2023, the company has turned the corner.
Finally, in the Green
Uber is slated to report an annual profit for the first time since going public. Meanwhile, revenues are on pace to grow for a third straight year.
International Expansion
Perhaps behind Uber's years of unprofitability lies its intentions to scale. International growth is a driving force for increased revenues. In 2021, Uber acquired freight company Transplace for $2.25 billion – allowing the freight business to expand its tentacles into Mexico.
Uber Eats Business is Surging Due to Acquisitions
Uber's management team has aggressively grown the company's delivery business in the past three years through acquisitions. In December 2020, Uber purchased the popular food delivery app Postmates. Next, Uber expanded into the alcohol delivery business by acquiring Drizly. Most recently, the company inked a partnership with Domino's, the largest pizza chain in the world. When Uber reports October 10th, Zacks Consensus Estimates suggest earnings will grow by a healthy 121.31% year-over-year.
Liquid, Institutional Quality Leader
Wall Street was just briefed on the latest 13F reports. A Form 13F is a report that large institutional investors must file quarterly. 13Fs give investors a rare window into the kind of stocks that the world's savviest investors are trafficking in. In the most recent 13F Filing, Third Point's Dan Loeb, Appaloosa's David Tepper, and Saudi Arabia's Public Investment Fund all held shares of Uber. Because of their sheer size and longer-than-normal time frame, institutional investors are a large market and stock-moving force worth observing and studying. Institutional investors like the ones mentioned above gravitate toward stocks like Uber because they have a rare combination of growth, liquidity, and innovation.
Uber is the Industry Leader
Uber and Lyft are the undisputed leaders in the rideshare industry. However, just because they share a duopoly of sorts doesn't mean that they are equal. For example, Uber grew revenue by 14% year-over-year last quarter, while Lyft grew at a lackluster pace of 3%.
Another sign that Uber is the dominant player in the industry is its robust relative strength. Lyft is below its IPO price, steeped in a downtrend, and is drastically underperforming Uber. Remember, price action and performance are directly correlated with supply and demand. Investors clearly favor Uber over Lyft.
Technical View
After a solid start to 2023, Uber shares are finding support at the 10-week moving average – a bullish sign.
Bottom Line
International growth, acquisitions, and a post-pandemic return to normal have Uber firing on all cylinders. Adding to the bullish outlook over the next six to twelve months is strong institutional sponsorship, intriguing price and volume action, and robust relative price and fundamental strength versus its peers.
Zacks Rank #5 (Strong Sell) stock Paramount Global, formerly ViacomCBS, is a multinational media and entertainment conglomerate with a diverse portfolio of brands and assets. However, the company is mainly focused on creating, distributing, and monetizing content across different platforms, including television, film, digital streaming, and live events. Paramount Global owns and operates well-known entertainment brands such as Paramount Pictures, Paramount+ streaming service, MTV, CBS, Nickelodeon, Showtime, and others. The company also produces a wide range of content, including movies, TV shows, news programs, and digital content, catering to a global audience.
Ballooning Debt
Friday, Moody's, a global financial services company specializing in credit ratings, research, and risk analysis, cut Paramount Global's debt rating from Baa2 to Baa3, one step above "noninvestment" grade. Paramount currently has more than $15 billion in long-term debt.
Because of the company's outsized long-term debt, it has been forced to make cuts elsewhere. Recently, Paramount agreed to sell its Simon & Schuster book division and was forced to slash its quarterly dividend by nearly 80% to raise cash.
A Rapidly Changing Industry
Paramount's business is being hurt by changing consumer preferences. Consumers are increasingly "cord-cutting" more than ever due to the many advantages over traditional cable such as cost savings, content variety and personalization, ad-free viewing and commitment free subscriptions. Though Paramount has a streaming service of its own, it faces stiff competition from strong existing streaming companies such as Netflix, Amazon Prime, Apple TV, Disney+ and many more. Global advertising is also adversely impacting Paramount. Year-over-year advertising revenues dropped 5.9% amid a weak global advertising market and fewer NFL games aired. As a result, annual EPS has moved in the wrong direction for investors and has declined for five consecutive years.
Relative Weakness
PARA's price and volume action is mirroring its weakening fundamental picture. In the past five years, PARA stock is down 74.2%, drastically underperforming the S&P 500 Index's gain of 58.6% over the same period. How weak has PARA been? The stock is now knocking on the door of the 2020 COVID-19 pandemic crash lows.
Bottom Line
The recent Moody's downgrade of Paramount Global's debt rating underscores the risk inherent in the stock. The company's long-term debt exceeds $15 billion, its quarterly dividend is shrinking, and fierce competition from streaming giants will likely cap new growth opportunities.
Additional content:
3 Oil Companies to Gain from Renewable Energy Investment
Economies across the world are gradually transitioning to cleaner energy sources. There has been a steady increase in pressure on energy companies to act on climate change on multiple fronts. Most analysts believe that although renewable energy will meet future energy needs, oil and natural gas demand will not be completely wiped out.
The U.S. Energy Information Administration, in its Annual Energy Outlook 2023, revealed that through 2050, renewables will increasingly match power demand. Thus, there are abundant opportunities for energy companies with a footprint in oil and gas resources or transporting commodities and the renewable energy space. Three such companies are Shell plc, Eni SpA and Enbridge Inc, each of which carries a Zacks Rank #3 (Hold). Thus, investors should keep an eye on these three energy firms as they are well-poised to gain in the long run.
Growing renewable business at a rapid pace is among the core strategies of Shell. In the renewable energy front, Shell has roughly 50 gigawatts (GW) of renewable generation capacity, considering projects that are either in operation, under construction or in the pipeline. Thus, for renewables and energy solutions, SHEL is investing actively in solar energy, wind energy, electric vehicle charging and others.
To implement the production of renewable energy, Plenitude, a benefit company, was established and is being controlled by Eni. To counter the decarbonization challenge, renewable energy generation is among the key strategies of Eni. This is reflected in its ambitious goal for more than 15 GW of installed renewable energy generating capacity by 2030.
Enbridge has been investing in wind farms, solar energy, geothermal projects and power transmission developments, reflecting the company's strong focus on renewables. Considering all the renewable energy projects that are either operational or under construction, Enbridge boasts a net of 2,173 megawatts of zero-emission energy generating capacity.
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/performancefor information about the performance numbers displayed in this press release.
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Uber Technologies and Paramount Global have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – September 5, 2023 – Zacks Equity Research shares Uber Technologies (UBER - Free Report) as the Bull of the Day and Paramount Global (PARA - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Shell plc (SHEL - Free Report) , Eni SpA (E - Free Report) and Enbridge Inc (ENB - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Company Overview
Zacks Rank #1 stock (Strong Buy) Uber Technologies is the worldwide leader in ridesharing services through its Uber mobile application.Uber is also a market leader in the food delivery business through its "Uber Eats" service and the freight business through its "Mobility" operations. Since going public in 2019, Uber investors have been subject to a wild, volatile ride. The company fell victim to COVID-19 restrictions, two brutal bear markets, and a market environment that has not been kind to IPOs. However, in 2023, the company has turned the corner.
Finally, in the Green
Uber is slated to report an annual profit for the first time since going public. Meanwhile, revenues are on pace to grow for a third straight year.
International Expansion
Perhaps behind Uber's years of unprofitability lies its intentions to scale. International growth is a driving force for increased revenues. In 2021, Uber acquired freight company Transplace for $2.25 billion – allowing the freight business to expand its tentacles into Mexico.
Uber Eats Business is Surging Due to Acquisitions
Uber's management team has aggressively grown the company's delivery business in the past three years through acquisitions. In December 2020, Uber purchased the popular food delivery app Postmates. Next, Uber expanded into the alcohol delivery business by acquiring Drizly. Most recently, the company inked a partnership with Domino's, the largest pizza chain in the world. When Uber reports October 10th, Zacks Consensus Estimates suggest earnings will grow by a healthy 121.31% year-over-year.
Liquid, Institutional Quality Leader
Wall Street was just briefed on the latest 13F reports. A Form 13F is a report that large institutional investors must file quarterly. 13Fs give investors a rare window into the kind of stocks that the world's savviest investors are trafficking in. In the most recent 13F Filing, Third Point's Dan Loeb, Appaloosa's David Tepper, and Saudi Arabia's Public Investment Fund all held shares of Uber. Because of their sheer size and longer-than-normal time frame, institutional investors are a large market and stock-moving force worth observing and studying. Institutional investors like the ones mentioned above gravitate toward stocks like Uber because they have a rare combination of growth, liquidity, and innovation.
Uber is the Industry Leader
Uber and Lyft are the undisputed leaders in the rideshare industry. However, just because they share a duopoly of sorts doesn't mean that they are equal. For example, Uber grew revenue by 14% year-over-year last quarter, while Lyft grew at a lackluster pace of 3%.
Another sign that Uber is the dominant player in the industry is its robust relative strength. Lyft is below its IPO price, steeped in a downtrend, and is drastically underperforming Uber. Remember, price action and performance are directly correlated with supply and demand. Investors clearly favor Uber over Lyft.
Technical View
After a solid start to 2023, Uber shares are finding support at the 10-week moving average – a bullish sign.
Bottom Line
International growth, acquisitions, and a post-pandemic return to normal have Uber firing on all cylinders. Adding to the bullish outlook over the next six to twelve months is strong institutional sponsorship, intriguing price and volume action, and robust relative price and fundamental strength versus its peers.
Bear of the Day:
Company Overview
Zacks Rank #5 (Strong Sell) stock Paramount Global, formerly ViacomCBS, is a multinational media and entertainment conglomerate with a diverse portfolio of brands and assets. However, the company is mainly focused on creating, distributing, and monetizing content across different platforms, including television, film, digital streaming, and live events. Paramount Global owns and operates well-known entertainment brands such as Paramount Pictures, Paramount+ streaming service, MTV, CBS, Nickelodeon, Showtime, and others. The company also produces a wide range of content, including movies, TV shows, news programs, and digital content, catering to a global audience.
Ballooning Debt
Friday, Moody's, a global financial services company specializing in credit ratings, research, and risk analysis, cut Paramount Global's debt rating from Baa2 to Baa3, one step above "noninvestment" grade. Paramount currently has more than $15 billion in long-term debt.
Because of the company's outsized long-term debt, it has been forced to make cuts elsewhere. Recently, Paramount agreed to sell its Simon & Schuster book division and was forced to slash its quarterly dividend by nearly 80% to raise cash.
A Rapidly Changing Industry
Paramount's business is being hurt by changing consumer preferences. Consumers are increasingly "cord-cutting" more than ever due to the many advantages over traditional cable such as cost savings, content variety and personalization, ad-free viewing and commitment free subscriptions. Though Paramount has a streaming service of its own, it faces stiff competition from strong existing streaming companies such as Netflix, Amazon Prime, Apple TV, Disney+ and many more. Global advertising is also adversely impacting Paramount. Year-over-year advertising revenues dropped 5.9% amid a weak global advertising market and fewer NFL games aired. As a result, annual EPS has moved in the wrong direction for investors and has declined for five consecutive years.
Relative Weakness
PARA's price and volume action is mirroring its weakening fundamental picture. In the past five years, PARA stock is down 74.2%, drastically underperforming the S&P 500 Index's gain of 58.6% over the same period. How weak has PARA been? The stock is now knocking on the door of the 2020 COVID-19 pandemic crash lows.
Bottom Line
The recent Moody's downgrade of Paramount Global's debt rating underscores the risk inherent in the stock. The company's long-term debt exceeds $15 billion, its quarterly dividend is shrinking, and fierce competition from streaming giants will likely cap new growth opportunities.
Additional content:
3 Oil Companies to Gain from Renewable Energy Investment
Economies across the world are gradually transitioning to cleaner energy sources. There has been a steady increase in pressure on energy companies to act on climate change on multiple fronts. Most analysts believe that although renewable energy will meet future energy needs, oil and natural gas demand will not be completely wiped out.
The U.S. Energy Information Administration, in its Annual Energy Outlook 2023, revealed that through 2050, renewables will increasingly match power demand. Thus, there are abundant opportunities for energy companies with a footprint in oil and gas resources or transporting commodities and the renewable energy space. Three such companies are Shell plc, Eni SpA and Enbridge Inc, each of which carries a Zacks Rank #3 (Hold). Thus, investors should keep an eye on these three energy firms as they are well-poised to gain in the long run.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
3 Stocks to Keep an Eye On
Growing renewable business at a rapid pace is among the core strategies of Shell. In the renewable energy front, Shell has roughly 50 gigawatts (GW) of renewable generation capacity, considering projects that are either in operation, under construction or in the pipeline. Thus, for renewables and energy solutions, SHEL is investing actively in solar energy, wind energy, electric vehicle charging and others.
To implement the production of renewable energy, Plenitude, a benefit company, was established and is being controlled by Eni. To counter the decarbonization challenge, renewable energy generation is among the key strategies of Eni. This is reflected in its ambitious goal for more than 15 GW of installed renewable energy generating capacity by 2030.
Enbridge has been investing in wind farms, solar energy, geothermal projects and power transmission developments, reflecting the company's strong focus on renewables. Considering all the renewable energy projects that are either operational or under construction, Enbridge boasts a net of 2,173 megawatts of zero-emission energy generating capacity.
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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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/performancefor information about the performance numbers displayed in this press release.