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The Zacks Analyst Blog Highlights JP Morgan, Live Nation Entertainment, PulteGroup and Builders FirstSource
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For Immediate Release
Chicago, IL – September 26, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: JP Morgan (JPM - Free Report) , Live Nation Entertainment (LYV - Free Report) , PulteGroup (PHM - Free Report) and Builders FirstSource (BLDR - Free Report) .
Here are highlights from Monday’s Analyst Blog:
The End of Policy Rate Hikes? Global Week Ahead
A market moment most stock traders waited for finally arrived.
Last week, major central banks spoke to the trading world.
To communicate formally: They are near the end of policy rate hikes.
At the end of this Global Week Ahead, for those developed economies?
Fresh personal consumption data — from the U.S. and the Euro Area — sheds light on how progress is going, slowing personal consumer price inflation down with steep monetary policy rate hikes.
In the emerging world, India's domestic debt enters a JP Morgan bond index.
Meanwhile, smaller Southeast Asian central banks wrestle with a currency dilemma.
Next are Reuters' five world market themes, reordered for equity traders—
(1) The Fed's PCE measure of inflation is out on Friday, Sept. 29th.
The Federal Reserve's preferred inflation gauge lands on Sept. 29th, right after the central bank signaled it plans to keep interest rates higher for longer to tame price pressures.
The personal consumption expenditures (PCE) price index rose 3.3% in the 12 months through July. The Fed tracks the PCE price indexes for its 2% inflation target.
In its latest decision on Wednesday, the Fed kept interest rates steady, but projected monetary policy will remain significantly tighter through 2024 than previously expected.
Investors will also be watching events in Washington DC, where U.S. lawmakers are haggling over a spending bill with a Sept. 30 deadline to avert a potential government shutdown that could rattle markets.
(2) Eurozone consumer price data is out on Friday, Sept. 29th, too.
The European Central Bank has not called time on its battle against inflation, but markets are laser-focused on when it might. That means Eurozone consumer prices data on Sept. 29th has the potential to move markets significantly.
Headline inflation in the euro area remains far above the ECB's 2% target but has been moving in the right direction.
Consumer prices increased by 5.2% year on year in August, extending a downward trend that started last autumn.
The ECB raised its deposit rate to a record 4% this month and revised up its inflation forecast for next year.
But with the currency bloc's economy weakening, the central bank also hinted a pause, at least, was coming. A further decline in inflation will undoubtedly spur intense speculation about the timing of its first rate cut.
(3) What happens to global oil prices? Is $100 a WTI barrel here shortly?
After what has felt like a relentless period of cost-of-living crisis and rising interest rates, central banks are finally wrestling inflation into submission. Or so they thought.
Oil prices — a major inflation variable that lies beyond the control of any policymaker — have risen above $90 a barrel to 10-month highs, serving as an unpleasant reminder that what goes down can also easily go up again.
The key driver has been Saudi Arabia and Russia, which account for over 20% of global output, agreeing to extend production cuts through year-end, to align supply with demand.
Most analysts agree the oil price would, in theory, have to remain higher for longer to really push up headline inflation. But the predictions of $100 oil are becoming louder. Central banks may not yet be able to declare the war on inflation over.
(4) India joins the benchmark JP Morgan EM domestic bond index.
India finally got the nod from JP Morgan to join its benchmark GBI-EM emerging market domestic bond index, which is followed by $236 billion of funds.
The decision will draw billions of dollars into domestic fixed-income markets of the world's fifth largest economy, with official inclusion due in increments from July 2024 until India reaches the 10% mark.
India began talks on including its debt in global indexes in 2019, but that ambition had been delayed by a number of factors, including its stance on capital gains taxes and local settlement.
Its government bond markets — in which foreigners currently hold less than 2% of outstanding paper — could get another boost when fellow index provider FTSE Russell decides on Sept. 28th whether to add India to its emerging bonds benchmark.
(5) Southeast Asia's central bank currency dilemma.
Asian central banks have a dilemma: how to handle weakening economic growth and peaking inflation, while arresting the slide in currencies to maintain stability in their financial systems.
The Bank of Indonesia kept rates steady for an eighth month on Thursday. Benign inflation might have argued for a cut, but Governor Perry Warjiyo emphasized currency stability was a deciding factor. The rupiah is at six-month lows and its yield premium over U.S. dollars has shrunk.
The same day, the Philippine central bank prioritized support for the peso over economic growth running at its slowest in nearly 12 years in the second quarter, with a hawkish pause.
The Bank of Thailand meets on Sept. 27th and is likely to stay hawkish, forced by the beleaguered baht, despite wide twin deficits and a struggling economy.
Heavy currency-market intervention has been one tactic. But much may rest on decisions of other central banks further afield, namely the Federal Reserve.
Zacks #1 Rank (STRONG BUY) Stocks
(1) Live Nation Entertainment: This $80 a share stock in the Leisure and Recreation industry has a $18.8B market cap. I see a Zacks Value score of B, a Zacks Growth score of A and a Zacks Momentum score of C.
Incorporated in 2005 and headquartered in Beverly Hills, CA, Live Nation operates as a live entertainment company. It operates through Concerts, Ticketing, and Sponsorship and Advertising segments.
The company has more than 580 million fans across all of its concerts and ticketing platforms in 46 countries.
The company owns, operates and has exclusive booking rights for or has an equity interest in 289 venues, including House of Blues music venues, and prestigious locations such as The Fillmore in San Francisco, Brooklyn Bowl, the Hollywood Palladium, the Ziggo Dome in Amsterdam, 3 Arena in Ireland, Royal Arena in Copenhagen and Spark Arena in New Zealand.
The company operates via three segments:
Concerts (80.9% of total revenues in 2022): The segment promotes live music events in its owned or operated venues and rented third-party venues; operates and manages music venues; produces music festivals; makes related content; and provides management as well as other services to artists. The segment's direct operating expenses comprises artist fees, event production costs, show-related marketing and advertising expenses, and other costs.
Ticketing (13.4% of total revenues in 2022): The segment manages the ticketing operations. This segment sells tickets for its events, as well as for third-party clients in numerous live event categories, like arenas, stadiums, professional sports franchises and leagues, college sports teams, amphitheaters, music clubs, concert promoters, performing arts venues, museums, and theaters via websites, mobile apps, ticket outlets, and telephone call centers. The segment's operating costs include all center costs and credit card fees, along with other costs.
Sponsorship & Advertising (5.7% of total revenues in 2022): The segment sells international, national, and local sponsorships and placement of advertising. The segment's direct operating expenses include fulfillment costs associated with its sponsorship programs, and other costs.
(2) PulteGroup: This $74 a share stock in the U.S. Home Builder industry has a $16.7B market cap. I see a Zacks Value score of A, a Zacks Growth score of C and a Zacks Momentum score of C.
Based in Atlanta, GA, PulteGroup Inc. engages in homebuilding and financial services businesses, primarily in the United States.
The company conducts operations through two primary business segments – Homebuilding (which accounted for 98.1% as of 2022 total revenues) and Financial Services (1.9%).
The Homebuilding segment offers a wide variety of home designs including single family detached, townhouses, condominiums and duplexes at different prices, with a variety of options and amenities to all major customer segments: first-time, move-up and active adult.
Pulte's brand portfolio includes Centex, Pulte Homes, Del Webb, DiVosta Homes, John Wieland Homes and Neighborhoods, and American West.
The company operates in 810 active communities in 42 markets in 24 states across the United States in 2022. The homebuilding division is broken down into six reportable segments; Northeast, Southeast, Florida, Texas, Midwest and West.
Pulte's direct subsidiaries under the homebuilding segment include Pulte Diversified Companies Inc., Del Webb Corp. and Centex Corp.
Pulte's Financial Services business includes mortgage banking and title operations through Pulte Mortgage and other subsidiaries. Pulte Mortgage arranges financing by originating mortgage loans for homebuyers.
Backlog at the end of second-quarter 2023 was 13,558 units, which was down 29.3% year over year. In addition, potential housing revenues from backlog decreased by 29.5% from the prior-year quarter to $8.2 billion.
(3) Builders FirstSource: This $121 a share stock in the Retail Building Prodcuts industry has a $15.9B market cap. I see a Zacks Value score of A, a Zacks Growth score of C and a Zacks Momentum score of A.
Builders FirstSource is the largest supplier of building materials, manufactured components and construction services to professional homebuilders, sub-contractors, remodelers and consumers. The company recently completed its merger with BMC Stock Holdings, Inc.
The company operates in more than 550 locations in 42 states all over the United States.
Builders FirstSource offers an integrated solution to its customers by providing manufacturing, supply and installation of a full range of structural and related building products.
Its manufactured products include factory-built roof and floor trusses, wall panels and stairs, vinyl windows, custom millwork and trim, as well as engineered wood that the company designs, cuts, and assembles specifically for each home.
Following the merger with BMC Stock Holdings, Inc. on Jan 1st, 2021, Builders FirstSource reorganized the structure of its internal organization. Given similar economic characteristics, categories of products, distribution methods and customers, its three operating divisions (namely East, Central, and West) are aggregated into one reportable segment.
In 2022, the company made six acquisitions for $722.3 million.
As of Jun 30th, 2023, Builders FirstSource had cash and cash equivalents of $89.3 million compared with $80.4 million at 2022-end. The company had liquidity of $0.9 billion at Jun 30, 2023, including approximately $0.8 billion in net borrowing available under the revolving credit facility.
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.
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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The Zacks Analyst Blog Highlights JP Morgan, Live Nation Entertainment, PulteGroup and Builders FirstSource
For Immediate Release
Chicago, IL – September 26, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: JP Morgan (JPM - Free Report) , Live Nation Entertainment (LYV - Free Report) , PulteGroup (PHM - Free Report) and Builders FirstSource (BLDR - Free Report) .
Here are highlights from Monday’s Analyst Blog:
The End of Policy Rate Hikes? Global Week Ahead
A market moment most stock traders waited for finally arrived.
Last week, major central banks spoke to the trading world.
To communicate formally: They are near the end of policy rate hikes.
At the end of this Global Week Ahead, for those developed economies?
Fresh personal consumption data — from the U.S. and the Euro Area — sheds light on how progress is going, slowing personal consumer price inflation down with steep monetary policy rate hikes.
In the emerging world, India's domestic debt enters a JP Morgan bond index.
Meanwhile, smaller Southeast Asian central banks wrestle with a currency dilemma.
Next are Reuters' five world market themes, reordered for equity traders—
(1) The Fed's PCE measure of inflation is out on Friday, Sept. 29th.
The Federal Reserve's preferred inflation gauge lands on Sept. 29th, right after the central bank signaled it plans to keep interest rates higher for longer to tame price pressures.
The personal consumption expenditures (PCE) price index rose 3.3% in the 12 months through July. The Fed tracks the PCE price indexes for its 2% inflation target.
In its latest decision on Wednesday, the Fed kept interest rates steady, but projected monetary policy will remain significantly tighter through 2024 than previously expected.
Investors will also be watching events in Washington DC, where U.S. lawmakers are haggling over a spending bill with a Sept. 30 deadline to avert a potential government shutdown that could rattle markets.
(2) Eurozone consumer price data is out on Friday, Sept. 29th, too.
The European Central Bank has not called time on its battle against inflation, but markets are laser-focused on when it might. That means Eurozone consumer prices data on Sept. 29th has the potential to move markets significantly.
Headline inflation in the euro area remains far above the ECB's 2% target but has been moving in the right direction.
Consumer prices increased by 5.2% year on year in August, extending a downward trend that started last autumn.
The ECB raised its deposit rate to a record 4% this month and revised up its inflation forecast for next year.
But with the currency bloc's economy weakening, the central bank also hinted a pause, at least, was coming. A further decline in inflation will undoubtedly spur intense speculation about the timing of its first rate cut.
(3) What happens to global oil prices? Is $100 a WTI barrel here shortly?
After what has felt like a relentless period of cost-of-living crisis and rising interest rates, central banks are finally wrestling inflation into submission. Or so they thought.
Oil prices — a major inflation variable that lies beyond the control of any policymaker — have risen above $90 a barrel to 10-month highs, serving as an unpleasant reminder that what goes down can also easily go up again.
The key driver has been Saudi Arabia and Russia, which account for over 20% of global output, agreeing to extend production cuts through year-end, to align supply with demand.
Most analysts agree the oil price would, in theory, have to remain higher for longer to really push up headline inflation. But the predictions of $100 oil are becoming louder. Central banks may not yet be able to declare the war on inflation over.
(4) India joins the benchmark JP Morgan EM domestic bond index.
India finally got the nod from JP Morgan to join its benchmark GBI-EM emerging market domestic bond index, which is followed by $236 billion of funds.
The decision will draw billions of dollars into domestic fixed-income markets of the world's fifth largest economy, with official inclusion due in increments from July 2024 until India reaches the 10% mark.
India began talks on including its debt in global indexes in 2019, but that ambition had been delayed by a number of factors, including its stance on capital gains taxes and local settlement.
Its government bond markets — in which foreigners currently hold less than 2% of outstanding paper — could get another boost when fellow index provider FTSE Russell decides on Sept. 28th whether to add India to its emerging bonds benchmark.
(5) Southeast Asia's central bank currency dilemma.
Asian central banks have a dilemma: how to handle weakening economic growth and peaking inflation, while arresting the slide in currencies to maintain stability in their financial systems.
The Bank of Indonesia kept rates steady for an eighth month on Thursday. Benign inflation might have argued for a cut, but Governor Perry Warjiyo emphasized currency stability was a deciding factor. The rupiah is at six-month lows and its yield premium over U.S. dollars has shrunk.
The same day, the Philippine central bank prioritized support for the peso over economic growth running at its slowest in nearly 12 years in the second quarter, with a hawkish pause.
The Bank of Thailand meets on Sept. 27th and is likely to stay hawkish, forced by the beleaguered baht, despite wide twin deficits and a struggling economy.
Heavy currency-market intervention has been one tactic. But much may rest on decisions of other central banks further afield, namely the Federal Reserve.
Zacks #1 Rank (STRONG BUY) Stocks
(1) Live Nation Entertainment: This $80 a share stock in the Leisure and Recreation industry has a $18.8B market cap. I see a Zacks Value score of B, a Zacks Growth score of A and a Zacks Momentum score of C.
Incorporated in 2005 and headquartered in Beverly Hills, CA, Live Nation operates as a live entertainment company. It operates through Concerts, Ticketing, and Sponsorship and Advertising segments.
The company has more than 580 million fans across all of its concerts and ticketing platforms in 46 countries.
The company owns, operates and has exclusive booking rights for or has an equity interest in 289 venues, including House of Blues music venues, and prestigious locations such as The Fillmore in San Francisco, Brooklyn Bowl, the Hollywood Palladium, the Ziggo Dome in Amsterdam, 3 Arena in Ireland, Royal Arena in Copenhagen and Spark Arena in New Zealand.
The company operates via three segments:
Concerts (80.9% of total revenues in 2022): The segment promotes live music events in its owned or operated venues and rented third-party venues; operates and manages music venues; produces music festivals; makes related content; and provides management as well as other services to artists. The segment's direct operating expenses comprises artist fees, event production costs, show-related marketing and advertising expenses, and other costs.
Ticketing (13.4% of total revenues in 2022): The segment manages the ticketing operations. This segment sells tickets for its events, as well as for third-party clients in numerous live event categories, like arenas, stadiums, professional sports franchises and leagues, college sports teams, amphitheaters, music clubs, concert promoters, performing arts venues, museums, and theaters via websites, mobile apps, ticket outlets, and telephone call centers. The segment's operating costs include all center costs and credit card fees, along with other costs.
Sponsorship & Advertising (5.7% of total revenues in 2022): The segment sells international, national, and local sponsorships and placement of advertising. The segment's direct operating expenses include fulfillment costs associated with its sponsorship programs, and other costs.
(2) PulteGroup: This $74 a share stock in the U.S. Home Builder industry has a $16.7B market cap. I see a Zacks Value score of A, a Zacks Growth score of C and a Zacks Momentum score of C.
Based in Atlanta, GA, PulteGroup Inc. engages in homebuilding and financial services businesses, primarily in the United States.
The company conducts operations through two primary business segments – Homebuilding (which accounted for 98.1% as of 2022 total revenues) and Financial Services (1.9%).
The Homebuilding segment offers a wide variety of home designs including single family detached, townhouses, condominiums and duplexes at different prices, with a variety of options and amenities to all major customer segments: first-time, move-up and active adult.
Pulte's brand portfolio includes Centex, Pulte Homes, Del Webb, DiVosta Homes, John Wieland Homes and Neighborhoods, and American West.
The company operates in 810 active communities in 42 markets in 24 states across the United States in 2022. The homebuilding division is broken down into six reportable segments; Northeast, Southeast, Florida, Texas, Midwest and West.
Pulte's direct subsidiaries under the homebuilding segment include Pulte Diversified Companies Inc., Del Webb Corp. and Centex Corp.
Pulte's Financial Services business includes mortgage banking and title operations through Pulte Mortgage and other subsidiaries. Pulte Mortgage arranges financing by originating mortgage loans for homebuyers.
Backlog at the end of second-quarter 2023 was 13,558 units, which was down 29.3% year over year. In addition, potential housing revenues from backlog decreased by 29.5% from the prior-year quarter to $8.2 billion.
(3) Builders FirstSource: This $121 a share stock in the Retail Building Prodcuts industry has a $15.9B market cap. I see a Zacks Value score of A, a Zacks Growth score of C and a Zacks Momentum score of A.
Builders FirstSource is the largest supplier of building materials, manufactured components and construction services to professional homebuilders, sub-contractors, remodelers and consumers. The company recently completed its merger with BMC Stock Holdings, Inc.
The company operates in more than 550 locations in 42 states all over the United States.
Builders FirstSource offers an integrated solution to its customers by providing manufacturing, supply and installation of a full range of structural and related building products.
Its manufactured products include factory-built roof and floor trusses, wall panels and stairs, vinyl windows, custom millwork and trim, as well as engineered wood that the company designs, cuts, and assembles specifically for each home.
Following the merger with BMC Stock Holdings, Inc. on Jan 1st, 2021, Builders FirstSource reorganized the structure of its internal organization. Given similar economic characteristics, categories of products, distribution methods and customers, its three operating divisions (namely East, Central, and West) are aggregated into one reportable segment.
In 2022, the company made six acquisitions for $722.3 million.
As of Jun 30th, 2023, Builders FirstSource had cash and cash equivalents of $89.3 million compared with $80.4 million at 2022-end. The company had liquidity of $0.9 billion at Jun 30, 2023, including approximately $0.8 billion in net borrowing available under the revolving credit facility.
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 >>
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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.