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Dell Technologies and OneWater Marine have been highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – September 27, 2023 – Zacks Equity Research shares Dell Technologies (DELL - Free Report) as the Bull of the Day and OneWater Marine (ONEW - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Target (TGT - Free Report) , Macy's (M - Free Report) and Amazon (AMZN - Free Report) .
Dell Technologies stock is showing considerable relative strength in a weak market environment and is further bolstered by a Zacks Rank #1 (Strong Buy), indicating upward trending earnings revisions.
Dell Technologies is a provider of information technology solutions including servers, storage, and networking products as well as commercial and consumer notebooks, desktop computers and workstations.
In addition to a rebound in PC sales, which seem to have bounced off a bottom, its growth in server sales is being accelerated by the explosion in Artificial Intelligence opportunities. 20% of server orders YTD were AI enabled.
DELL continues to adjust to the technology market's needs and with a reasonable valuation, and strong price momentum is a worthy investment consideration for any investor's portfolio.
Earnings Estimates Snap Higher
At the most recent quarterly earnings report Dell Technologies beat analysts estimates by a whopping 54% and marked its sixth consecutive upward earnings surprise. These strong results have prompted analysts to make some significant revisions higher to future earnings expectations, as can be seen in the chart below.
Current quarterly earnings estimates have been revised higher by 8.1% and FY23 earnings estimates have increased by 13.5% over the last two months. EPS are forecast to climb 12% annually over the next 3-5 years.
Strong Stock in a Weak Tape
Since the last Federal Reserve interest rate meeting on September 20, stocks have been reeling, as Fed chair Jerome Powell indicated that he would continue to keep interest rates higher for longer. And while the S&P 500 is down nearly -6% month to date, Dell Technologies shows immense relative strength.
Furthermore, the price action in DELL stock has been forming a compelling technical chart pattern. The stock has been building out this bull flag consolidation over the last two weeks and if the price can breakout and close above the $70 level, it should make a bull run.
Critical to DELL moving higher in the short term will be how the broad market acts. However, even if there is some market weakness that pulls down DELL stock in the very short term it remains a convincing investment over the medium and long term.
Reasonable Valuation
Even with double digit earnings growth estimates, and a strong position in its respective market, Dell Technologies trades at a very reasonable valuation. Today, it is trading at a one year forward earnings multiple of 13.1x, which is well below the industry average of 34.5x, and above its three-year median of 10.3x.
DELL also pays a generous dividend yield of 2.1% and raised the payout by 12% over the last year.
Bottom Line
Dell Technologies, with its Zacks Rank #1 (Strong Buy), demonstrates resilience and adaptability in a volatile market, making it a noteworthy investment consideration. The company's innovation in AI-enabled server sales and its rebound in PC sales highlight its potential for sustained growth. Despite broader market uncertainties, its reasonable valuation, strong price momentum, and substantial dividend yield enhance its appeal, making Dell a promising investment for the discerning investor.
OneWater Marine, a premium boat retailer, is trading in a steep down trend, punctuated by dismal guidance from management, falling earnings estimates, and compressing margins. These developments have led analysts to revise earnings estimates lower, giving OneWater Marine a Zacks Rank #5 (Strong Sell) rating.
Falling Earnings Estimates
Earnings estimates have been revised considerably lower over the last two months. Current quarter earnings estimates have been lowered by -73% and are projected to fall -66% YoY to $0.43 per share. FY23 earnings estimates have been revised lower by -37% and are forecast to decline -50% YoY to $4.58 per share.
Highlighting a bright spot for the boat retailer is that sales growth is expected to remain marginally positive this year and next, which is better than some of its competitors expect. Nonetheless, the industry is expected to see headwinds going forward.
Bearish Technical Pattern
After gapping down more than -30% following the bleak Q3 earnings report, ONEW stock has remained under pressure. The price action isn't encouraging as a bearish wedge has formed in the chart, and a breakdown on Tuesday indicates there may be further downside action ahead.
Valuation
OneWater Marine is trading at a one year forward earnings multiple of 5.4x, which is in line with its historical median, and well below the industry average of 24.8x.
Bottom Line
The leisure and recreation industry currently sits in the bottom 3% (237 out of 245) of the Zacks Industry Rank, showing a broad weakness in the segment. After the incredible boom period following the Covid-19 pandemic, it seems a lot of consumer spending, especially big-ticket items like boats was pulled forward a couple years. However, there will be a time in the future where demand for ONEW products again picks up, and the stock will again be worth considering. But until those earnings estimates begin to trend higher, I would avoid the stock.
Additional content:
Retailers Ramp Up Staffing Ahead of Holiday Season
With the holiday season approaching, retailers are actively preparing to meet the high expectations of shoppers eager for exciting deals. Players in the industry are all geared up to walk the extra mile this festive season to capitalize on any potential upswing in demand. The backdrop of healthy employment and wage gains has so far bolstered consumer spending, exhibiting remarkable resilience despite a challenging economic environment.
Strategies to Meet Consumer Preferences
The holiday season holds significant importance for retailers as it contributes a substantial portion of their annual revenues. Consequently, retailers must proactively address logistical and inventory challenges while devising comprehensive strategies to deliver a seamless shopping experience, both in physical stores and online. Keeping all these aspects in mind and to keep pace with any unprecedented increase in demand, retailers are unveiling hiring plans for the holiday season.
To cater to consumers' product preferences, retailers are focusing on replenishing shelves with in-demand merchandise and ramping up investments in digitization. These efforts are expected to result in the recruitment of a considerable number of seasonal associates who will play crucial roles in managing curbside and in-store pickups of online orders as well as doorstep deliveries. Furthermore, retailers are likely to expand their warehouse staff to ensure a smooth flow of inventory from distribution centers to stores throughout the festive season.
Retailers' Hiring Initiatives
Target is set to appoint nearly 100,000 seasonal workers, aiming to provide a seamless shopping experience for its customers. The company is launching its holiday deals early, featuring thousands of new items priced under $25 across various categories.
Target Circle members will enjoy exclusive access to the "Deal of the Day" shopping event, both in the store and online. From Oct 1 through Dec 24, customers can avail of incredible offers, including discounts on renowned national brands such as Apple, Nespresso, Dyson and Nintendo, along with an additional 5% discount with the RedCard.
Keeping in mind the festive rush, Macy's plans to fill more than 38,000 full and part-time seasonal associates across its Macy's, Bloomingdale's and Bluemercury stores, along with its distribution centers. The company is committed to offering competitive wages, with many positions starting at a minimum of $15 per hour.
Macy's is on track to strengthen its omnichannel capabilities with investments in online shopping experiences, data and analytics, technology infrastructure as well as better fulfillment capabilities.
Meanwhile, Amazon has ambitious plans to deploy 250,000 associates for the crucial festive season. The e-commerce giant aims to recruit individuals for both part-time and full-time positions, including roles in fulfillment centers and transportation, across the entire nation.
Final Thoughts
The significance of the holiday season for retailers cannot be overstated. This period marks a crucial juncture, often accounting for a substantial portion of annual sales. The influx of enthusiastic shoppers provides retailers with the opportunity to showcase their offerings, boost revenues and solidify brand loyalty. Retailers leverage this period to not only maximize sales but also leave an indelible impression on consumers.
However, market analysts are skeptical about whether the upcoming holiday season will meet retailers' expectations. They believe that cautious consumer spending, influenced by diminishing household savings and ongoing economic uncertainties, could potentially hinder the season's performance. According to Mastercard SpendingPulse, U.S. retail sales, excluding automotive, are anticipated to increase 3.7% from a year earlier during the traditional holiday period spanning from Nov 1 to Dec 24.
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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.
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Dell Technologies and OneWater Marine have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – September 27, 2023 – Zacks Equity Research shares Dell Technologies (DELL - Free Report) as the Bull of the Day and OneWater Marine (ONEW - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Target (TGT - Free Report) , Macy's (M - Free Report) and Amazon (AMZN - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Dell Technologies stock is showing considerable relative strength in a weak market environment and is further bolstered by a Zacks Rank #1 (Strong Buy), indicating upward trending earnings revisions.
Dell Technologies is a provider of information technology solutions including servers, storage, and networking products as well as commercial and consumer notebooks, desktop computers and workstations.
In addition to a rebound in PC sales, which seem to have bounced off a bottom, its growth in server sales is being accelerated by the explosion in Artificial Intelligence opportunities. 20% of server orders YTD were AI enabled.
DELL continues to adjust to the technology market's needs and with a reasonable valuation, and strong price momentum is a worthy investment consideration for any investor's portfolio.
Earnings Estimates Snap Higher
At the most recent quarterly earnings report Dell Technologies beat analysts estimates by a whopping 54% and marked its sixth consecutive upward earnings surprise. These strong results have prompted analysts to make some significant revisions higher to future earnings expectations, as can be seen in the chart below.
Current quarterly earnings estimates have been revised higher by 8.1% and FY23 earnings estimates have increased by 13.5% over the last two months. EPS are forecast to climb 12% annually over the next 3-5 years.
Strong Stock in a Weak Tape
Since the last Federal Reserve interest rate meeting on September 20, stocks have been reeling, as Fed chair Jerome Powell indicated that he would continue to keep interest rates higher for longer. And while the S&P 500 is down nearly -6% month to date, Dell Technologies shows immense relative strength.
Furthermore, the price action in DELL stock has been forming a compelling technical chart pattern. The stock has been building out this bull flag consolidation over the last two weeks and if the price can breakout and close above the $70 level, it should make a bull run.
Critical to DELL moving higher in the short term will be how the broad market acts. However, even if there is some market weakness that pulls down DELL stock in the very short term it remains a convincing investment over the medium and long term.
Reasonable Valuation
Even with double digit earnings growth estimates, and a strong position in its respective market, Dell Technologies trades at a very reasonable valuation. Today, it is trading at a one year forward earnings multiple of 13.1x, which is well below the industry average of 34.5x, and above its three-year median of 10.3x.
DELL also pays a generous dividend yield of 2.1% and raised the payout by 12% over the last year.
Bottom Line
Dell Technologies, with its Zacks Rank #1 (Strong Buy), demonstrates resilience and adaptability in a volatile market, making it a noteworthy investment consideration. The company's innovation in AI-enabled server sales and its rebound in PC sales highlight its potential for sustained growth. Despite broader market uncertainties, its reasonable valuation, strong price momentum, and substantial dividend yield enhance its appeal, making Dell a promising investment for the discerning investor.
Bear of the Day:
OneWater Marine, a premium boat retailer, is trading in a steep down trend, punctuated by dismal guidance from management, falling earnings estimates, and compressing margins. These developments have led analysts to revise earnings estimates lower, giving OneWater Marine a Zacks Rank #5 (Strong Sell) rating.
Falling Earnings Estimates
Earnings estimates have been revised considerably lower over the last two months. Current quarter earnings estimates have been lowered by -73% and are projected to fall -66% YoY to $0.43 per share. FY23 earnings estimates have been revised lower by -37% and are forecast to decline -50% YoY to $4.58 per share.
Highlighting a bright spot for the boat retailer is that sales growth is expected to remain marginally positive this year and next, which is better than some of its competitors expect. Nonetheless, the industry is expected to see headwinds going forward.
Bearish Technical Pattern
After gapping down more than -30% following the bleak Q3 earnings report, ONEW stock has remained under pressure. The price action isn't encouraging as a bearish wedge has formed in the chart, and a breakdown on Tuesday indicates there may be further downside action ahead.
Valuation
OneWater Marine is trading at a one year forward earnings multiple of 5.4x, which is in line with its historical median, and well below the industry average of 24.8x.
Bottom Line
The leisure and recreation industry currently sits in the bottom 3% (237 out of 245) of the Zacks Industry Rank, showing a broad weakness in the segment. After the incredible boom period following the Covid-19 pandemic, it seems a lot of consumer spending, especially big-ticket items like boats was pulled forward a couple years. However, there will be a time in the future where demand for ONEW products again picks up, and the stock will again be worth considering. But until those earnings estimates begin to trend higher, I would avoid the stock.
Additional content:
Retailers Ramp Up Staffing Ahead of Holiday Season
With the holiday season approaching, retailers are actively preparing to meet the high expectations of shoppers eager for exciting deals. Players in the industry are all geared up to walk the extra mile this festive season to capitalize on any potential upswing in demand. The backdrop of healthy employment and wage gains has so far bolstered consumer spending, exhibiting remarkable resilience despite a challenging economic environment.
Strategies to Meet Consumer Preferences
The holiday season holds significant importance for retailers as it contributes a substantial portion of their annual revenues. Consequently, retailers must proactively address logistical and inventory challenges while devising comprehensive strategies to deliver a seamless shopping experience, both in physical stores and online. Keeping all these aspects in mind and to keep pace with any unprecedented increase in demand, retailers are unveiling hiring plans for the holiday season.
To cater to consumers' product preferences, retailers are focusing on replenishing shelves with in-demand merchandise and ramping up investments in digitization. These efforts are expected to result in the recruitment of a considerable number of seasonal associates who will play crucial roles in managing curbside and in-store pickups of online orders as well as doorstep deliveries. Furthermore, retailers are likely to expand their warehouse staff to ensure a smooth flow of inventory from distribution centers to stores throughout the festive season.
Retailers' Hiring Initiatives
Target is set to appoint nearly 100,000 seasonal workers, aiming to provide a seamless shopping experience for its customers. The company is launching its holiday deals early, featuring thousands of new items priced under $25 across various categories.
Target Circle members will enjoy exclusive access to the "Deal of the Day" shopping event, both in the store and online. From Oct 1 through Dec 24, customers can avail of incredible offers, including discounts on renowned national brands such as Apple, Nespresso, Dyson and Nintendo, along with an additional 5% discount with the RedCard.
Keeping in mind the festive rush, Macy's plans to fill more than 38,000 full and part-time seasonal associates across its Macy's, Bloomingdale's and Bluemercury stores, along with its distribution centers. The company is committed to offering competitive wages, with many positions starting at a minimum of $15 per hour.
Macy's is on track to strengthen its omnichannel capabilities with investments in online shopping experiences, data and analytics, technology infrastructure as well as better fulfillment capabilities.
Meanwhile, Amazon has ambitious plans to deploy 250,000 associates for the crucial festive season. The e-commerce giant aims to recruit individuals for both part-time and full-time positions, including roles in fulfillment centers and transportation, across the entire nation.
Final Thoughts
The significance of the holiday season for retailers cannot be overstated. This period marks a crucial juncture, often accounting for a substantial portion of annual sales. The influx of enthusiastic shoppers provides retailers with the opportunity to showcase their offerings, boost revenues and solidify brand loyalty. Retailers leverage this period to not only maximize sales but also leave an indelible impression on consumers.
However, market analysts are skeptical about whether the upcoming holiday season will meet retailers' expectations. They believe that cautious consumer spending, influenced by diminishing household savings and ongoing economic uncertainties, could potentially hinder the season's performance. According to Mastercard SpendingPulse, U.S. retail sales, excluding automotive, are anticipated to increase 3.7% from a year earlier during the traditional holiday period spanning from Nov 1 to Dec 24.
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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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.