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AZEK and Morgan Stanley have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – October 13, 2023 – Zacks Equity Research shares AZEK (AZEK - Free Report) as the Bull of the Day and Morgan Stanley (MS - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on NVIDIA Corp. (NVDA - Free Report) , CME Group Inc.'s (CME - Free Report) and Coinbase Global, Inc. (COIN - Free Report) .
AZEK is a Zacks Rank #1 (Strong Buy) that engages in the manufacturing and selling of building products for residential, commercial, and industrial markets in the United States.
The stock fell apart in 2022 but has rallied over 100% off those lows from last year. Investors have seen a 25% sell-off over the last month, so the question right now is if the stock is a buy before earnings.
The bulls might have a case to stay long as analyst estimates are moving higher as the stock tests technical support. This makes the current trading level an attractive area to enter the stock.
About the Company
AZEK was founded in 2013 and is headquartered in Chicago, IL. The company operates through two segments: Residential and Commercial.
The residential side designs and manufacturers decking, railing, trim, molding, and other similar products. The commercial side manufactures engineered polymer materials used in various industries.
The stock has a Zacks Style Score of "B" in Growth and Momentum. It has a Forward PE of 27 and pays no dividend. AZEK currently employs over 2,100 and has a market cap of $4 billion.
Q1 Earnings Beat
In early August AZEK reported a Q3 beat of 15%. The company also saw a slight revenue beat and guided FY23 higher, seeing $1.34-1.36B v the 1.3B expected.
The company also raised FY23 EBITDA and Capex. Margins were higher at 25% v 21.9% last year.
Management commented that demand signals are providing a positive backdrop for the remainder of the building season. They added that the residential segment sell-through growth is improving versus the prior quarter.
The stock reacted positively, moving about 5% higher after EPS. From there, the stock drifted to February 2022 highs before starting to trend lower.
Analyst Estimates
Analyst estimates have been trending higher since before earnings and have continued to be taken higher since the August earnings report.
Looking at the current quarter, estimates are moving 20% higher over the last 90 days. For the next quarter, estimates have gone from $0.02 to $0.07 over that same time frame, a move of 250%.
Looking at the longer term, estimates are moving higher as well.
For the current year, analysts have taken numbers from $0.57 to $0.68, or 19%. For next year, we see estimates jump from $0.86 to $1.05, or 22%.
Analyst have also raised their price targets since the earnings report.
Goldman reiterated its Buy and lifted its price target to $37 from $32. JPMorgan Chase lifted its target to $37 from $30 and reiterated its Overweight.
AZEK next reports in November and a recent note from Jefferies saying they expect a guide coming in line with consensus. They expect growth in 2024 and believe the stock will react favorably to earnings.
The Technicals
The stock has recently sold off and now resides right at the 200-day moving average. The selling went hand in hand with the overall market sell-off and the move higher in interest rates.
Investors have a solid entry point at the 200-day, which lines up with a 61.8% Fibonacci retracement drawn from May lows to recent highs. This setup provides a good risk reward against the March lows while looking for a return to 2023 highs.
Bottom Line
After a rough ride in 2022, AZEK looks poised to provide solid fundamentals into next year. Earnings are scheduled for the end of November and will be a catalyst for the direction of the stock.
The recent pullback provides a good risk reward for bullish investors and a starter position should be considered at current levels.
Morgan Stanley is a Zacks Rank #5 (Strong Sell) that provides various financial products and services to corporations, governments, financial institutions, and individuals.
The stock is trading near lows as earnings approach next week. Investors should be cautious as the price action does not look great ahead of the print. Additionally, analyst estimates have been falling for the last few months.
About the Company
Morgan Stanley is one of the most recognizable names on Wall Street. It was founded in 1924 and is headquartered in New York, New York.The company employs over 80,000 people.
The company's business is divided into three segments:
The Institutional Securities segment contributed 45.5% of total net revenues in 2022 and includes activities such as capital raising, corporate lending, trading, and market-making.
The Wealth Management segment also accounted for 45.5% of 2022 revenues. It provides brokerage and investment advisory services covering various investment alternatives.
The Investment Management segment is the smallest, bringing in 9% of revenues. It provides global asset management products and services in equity, fixed-income, and alternative investments.
MS is valued at $130 billion and has a Forward PE of 14. The stock holds Zacks Style Scores of "F" in Growth, Momentum and Value. The stock pays a dividend of 4.3%.
Q2 Earnings
Morgan Stanley last reported in July, seeing an 8% EPS beat. The company beat on revenues and the Wealth and Management segment added $100B in new assets.
However, other areas including Institutional securities, fixed income, equity revenue and investment management were down year over year.
Management commented that the firm delivered solid results in a challenging market environment. While this was certainly true for Q2, analyst have been lowering estimates for the upcoming quarter and beyond.
Estimates
Over the last 90 days, numbers for the current quarter have been taken down from $1.45 to $1.28, or 12%.
For the current year, analysts have lowered estimates by 8% over that same time frame.
Looking at the longer term, numbers are going lower as well. For next year, estimates have fallen from $6.98 to $6.82 over the last 30 days or almost 2%.
The company will report on October 18th and investors should be aware of this momentum lower. While expectations are low an earnings miss could bring the stock to new 2023 lows.
Technical Take
Over the last two years, Morgan Stanley has traded between $70 and $105. The stock now sits at the bottom of that range and is at lows of the year, down 8% in 2023.
While it might be tempting to buy into the pullback, the stock is well below its moving averages. The 200-day is at $88, while the 50-day is at $84.
Investors should be patient into the print and see if things improve. If the momentum lower continues, the stock could fall below $70 and hit halfway back from the Covid-lows to highs, which is $68.
In Summary
Morgan Stanley and other banks continue to display terrible price action. Trading at 2023 lows going into earnings is not a bullish sign and investors should be patient.
Additional content:
3 Crypto Stocks to Buy as Bitcoin Attempts Another Rebound
The cryptocurrency market staged a solid rebound this year after a disappointing 2022 as the Federal Reserve's monetary tightening campaign, which saw aggressive interest rate hikes to combat multi-decade high inflation, weighed on cryptocurrencies.
However, cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Dogecoin (DOGE) and BNB (BNB), have been rangebound over the past three months as investors are yet to get a clear picture about the Fed's future course of action with its interest rate hikes.
Bitcoin particularly had been on a rally till July, with its price hitting $31,500. However, the Fed has since hiked interest rates once in July, following which cryptocurrencies took a hit once again. In fact, Bitcoin has been falling since hitting its 52-week high in early July.
However, it has also solidified its position over the past few weeks and is now hovering around $26,900 after falling as much as $25,400 in late August and September.
The rebound has been taking place since the Fed kept its benchmark policy rate unchanged in its September FOMC meeting to its current range of 5.25-5.25%.
A higher market interest rate has a negative impact on high-growth sectors such as technology, consumer discretionary and cryptocurrencies. The Fed's aggressive monetary tightening policy has also raised worries that the economy might slip into a recession.
Fed Chair Jerome Powell, in his first post-FOMC comment, said that inflation remains elevated, which might require the central bank to hike interest rates by another 25 basis points before it starts cutting interest rates in 2024.
Following Powell's hawkish comments, the yield on the 10-year U.S. Treasury Note surged to its highest level since 2007. The 10-year Treasury yield holds immense significance as it mirrors market participants' outlook on the nation's economic situation, influencing consumers, businesses and government entities.
However, cryptocurrencies are once again trying to rebound from their recent lows as investors' sentiments have been upbeat following dovish comments from a number of Fed officials. These officials believe that the recent tightening of credit conditions may make the central bank decide not to go for another interest rate hike in its November FOMC meeting.
Our Choices
NVIDIA Corp. is a major player in the semiconductor industry and has been one of the standout success stories of 2023. As a leading designer of graphic processing units (GPUs), the value of the NVDA stock tends to surge in a thriving crypto market. This is primarily due to the crucial role that GPUs play in data centers, artificial intelligence and the mining or production of cryptocurrencies.
NVIDIA's expected earnings growth rate for the current year is 221.6%. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 60 days. NVIDIA presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
CME Group Inc.'s options give the buyer of the call/put the right to buy/sell cryptocurrency futures contracts at a specific price at some future date. CME offers bitcoin and ether options based on the exchange's cash-settled standard and micro BTC and ETH futures contracts.
CME Group's expected earnings growth rate for the current year is 14.1%. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 60 days. CME presently has a Zacks Rank #2.
Coinbase Global, Inc. offers financial infrastructure and technology to support the global cryptocurrency economy. COIN provides a main financial account for consumers in the crypto space, a marketplace with liquidity for institutional crypto asset transactions, and technology and services for developers to build crypto-based applications and accept cryptocurrencies securely as payment.
Coinbase Global's expected earnings growth rate for the current year is 84.5%. The Zacks Consensus Estimate for current-year earnings has improved 4.4% over the last 60 days. Coinbase currently has a Zacks Rank #2.
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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AZEK and Morgan Stanley have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – October 13, 2023 – Zacks Equity Research shares AZEK (AZEK - Free Report) as the Bull of the Day and Morgan Stanley (MS - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on NVIDIA Corp. (NVDA - Free Report) , CME Group Inc.'s (CME - Free Report) and Coinbase Global, Inc. (COIN - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
AZEK is a Zacks Rank #1 (Strong Buy) that engages in the manufacturing and selling of building products for residential, commercial, and industrial markets in the United States.
The stock fell apart in 2022 but has rallied over 100% off those lows from last year. Investors have seen a 25% sell-off over the last month, so the question right now is if the stock is a buy before earnings.
The bulls might have a case to stay long as analyst estimates are moving higher as the stock tests technical support. This makes the current trading level an attractive area to enter the stock.
About the Company
AZEK was founded in 2013 and is headquartered in Chicago, IL. The company operates through two segments: Residential and Commercial.
The residential side designs and manufacturers decking, railing, trim, molding, and other similar products. The commercial side manufactures engineered polymer materials used in various industries.
The stock has a Zacks Style Score of "B" in Growth and Momentum. It has a Forward PE of 27 and pays no dividend. AZEK currently employs over 2,100 and has a market cap of $4 billion.
Q1 Earnings Beat
In early August AZEK reported a Q3 beat of 15%. The company also saw a slight revenue beat and guided FY23 higher, seeing $1.34-1.36B v the 1.3B expected.
The company also raised FY23 EBITDA and Capex. Margins were higher at 25% v 21.9% last year.
Management commented that demand signals are providing a positive backdrop for the remainder of the building season. They added that the residential segment sell-through growth is improving versus the prior quarter.
The stock reacted positively, moving about 5% higher after EPS. From there, the stock drifted to February 2022 highs before starting to trend lower.
Analyst Estimates
Analyst estimates have been trending higher since before earnings and have continued to be taken higher since the August earnings report.
Looking at the current quarter, estimates are moving 20% higher over the last 90 days. For the next quarter, estimates have gone from $0.02 to $0.07 over that same time frame, a move of 250%.
Looking at the longer term, estimates are moving higher as well.
For the current year, analysts have taken numbers from $0.57 to $0.68, or 19%. For next year, we see estimates jump from $0.86 to $1.05, or 22%.
Analyst have also raised their price targets since the earnings report.
Goldman reiterated its Buy and lifted its price target to $37 from $32. JPMorgan Chase lifted its target to $37 from $30 and reiterated its Overweight.
AZEK next reports in November and a recent note from Jefferies saying they expect a guide coming in line with consensus. They expect growth in 2024 and believe the stock will react favorably to earnings.
The Technicals
The stock has recently sold off and now resides right at the 200-day moving average. The selling went hand in hand with the overall market sell-off and the move higher in interest rates.
Investors have a solid entry point at the 200-day, which lines up with a 61.8% Fibonacci retracement drawn from May lows to recent highs. This setup provides a good risk reward against the March lows while looking for a return to 2023 highs.
Bottom Line
After a rough ride in 2022, AZEK looks poised to provide solid fundamentals into next year. Earnings are scheduled for the end of November and will be a catalyst for the direction of the stock.
The recent pullback provides a good risk reward for bullish investors and a starter position should be considered at current levels.
Bear of the Day:
Morgan Stanley is a Zacks Rank #5 (Strong Sell) that provides various financial products and services to corporations, governments, financial institutions, and individuals.
The stock is trading near lows as earnings approach next week. Investors should be cautious as the price action does not look great ahead of the print. Additionally, analyst estimates have been falling for the last few months.
About the Company
Morgan Stanley is one of the most recognizable names on Wall Street. It was founded in 1924 and is headquartered in New York, New York.The company employs over 80,000 people.
The company's business is divided into three segments:
The Institutional Securities segment contributed 45.5% of total net revenues in 2022 and includes activities such as capital raising, corporate lending, trading, and market-making.
The Wealth Management segment also accounted for 45.5% of 2022 revenues. It provides brokerage and investment advisory services covering various investment alternatives.
The Investment Management segment is the smallest, bringing in 9% of revenues. It provides global asset management products and services in equity, fixed-income, and alternative investments.
MS is valued at $130 billion and has a Forward PE of 14. The stock holds Zacks Style Scores of "F" in Growth, Momentum and Value. The stock pays a dividend of 4.3%.
Q2 Earnings
Morgan Stanley last reported in July, seeing an 8% EPS beat. The company beat on revenues and the Wealth and Management segment added $100B in new assets.
However, other areas including Institutional securities, fixed income, equity revenue and investment management were down year over year.
Management commented that the firm delivered solid results in a challenging market environment. While this was certainly true for Q2, analyst have been lowering estimates for the upcoming quarter and beyond.
Estimates
Over the last 90 days, numbers for the current quarter have been taken down from $1.45 to $1.28, or 12%.
For the current year, analysts have lowered estimates by 8% over that same time frame.
Looking at the longer term, numbers are going lower as well. For next year, estimates have fallen from $6.98 to $6.82 over the last 30 days or almost 2%.
The company will report on October 18th and investors should be aware of this momentum lower. While expectations are low an earnings miss could bring the stock to new 2023 lows.
Technical Take
Over the last two years, Morgan Stanley has traded between $70 and $105. The stock now sits at the bottom of that range and is at lows of the year, down 8% in 2023.
While it might be tempting to buy into the pullback, the stock is well below its moving averages. The 200-day is at $88, while the 50-day is at $84.
Investors should be patient into the print and see if things improve. If the momentum lower continues, the stock could fall below $70 and hit halfway back from the Covid-lows to highs, which is $68.
In Summary
Morgan Stanley and other banks continue to display terrible price action. Trading at 2023 lows going into earnings is not a bullish sign and investors should be patient.
Additional content:
3 Crypto Stocks to Buy as Bitcoin Attempts Another Rebound
The cryptocurrency market staged a solid rebound this year after a disappointing 2022 as the Federal Reserve's monetary tightening campaign, which saw aggressive interest rate hikes to combat multi-decade high inflation, weighed on cryptocurrencies.
However, cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Dogecoin (DOGE) and BNB (BNB), have been rangebound over the past three months as investors are yet to get a clear picture about the Fed's future course of action with its interest rate hikes.
Bitcoin particularly had been on a rally till July, with its price hitting $31,500. However, the Fed has since hiked interest rates once in July, following which cryptocurrencies took a hit once again. In fact, Bitcoin has been falling since hitting its 52-week high in early July.
However, it has also solidified its position over the past few weeks and is now hovering around $26,900 after falling as much as $25,400 in late August and September.
The rebound has been taking place since the Fed kept its benchmark policy rate unchanged in its September FOMC meeting to its current range of 5.25-5.25%.
A higher market interest rate has a negative impact on high-growth sectors such as technology, consumer discretionary and cryptocurrencies. The Fed's aggressive monetary tightening policy has also raised worries that the economy might slip into a recession.
Fed Chair Jerome Powell, in his first post-FOMC comment, said that inflation remains elevated, which might require the central bank to hike interest rates by another 25 basis points before it starts cutting interest rates in 2024.
Following Powell's hawkish comments, the yield on the 10-year U.S. Treasury Note surged to its highest level since 2007. The 10-year Treasury yield holds immense significance as it mirrors market participants' outlook on the nation's economic situation, influencing consumers, businesses and government entities.
However, cryptocurrencies are once again trying to rebound from their recent lows as investors' sentiments have been upbeat following dovish comments from a number of Fed officials. These officials believe that the recent tightening of credit conditions may make the central bank decide not to go for another interest rate hike in its November FOMC meeting.
Our Choices
NVIDIA Corp. is a major player in the semiconductor industry and has been one of the standout success stories of 2023. As a leading designer of graphic processing units (GPUs), the value of the NVDA stock tends to surge in a thriving crypto market. This is primarily due to the crucial role that GPUs play in data centers, artificial intelligence and the mining or production of cryptocurrencies.
NVIDIA's expected earnings growth rate for the current year is 221.6%. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 60 days. NVIDIA presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
CME Group Inc.'s options give the buyer of the call/put the right to buy/sell cryptocurrency futures contracts at a specific price at some future date. CME offers bitcoin and ether options based on the exchange's cash-settled standard and micro BTC and ETH futures contracts.
CME Group's expected earnings growth rate for the current year is 14.1%. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 60 days. CME presently has a Zacks Rank #2.
Coinbase Global, Inc. offers financial infrastructure and technology to support the global cryptocurrency economy. COIN provides a main financial account for consumers in the crypto space, a marketplace with liquidity for institutional crypto asset transactions, and technology and services for developers to build crypto-based applications and accept cryptocurrencies securely as payment.
Coinbase Global's expected earnings growth rate for the current year is 84.5%. The Zacks Consensus Estimate for current-year earnings has improved 4.4% over the last 60 days. Coinbase currently has a Zacks Rank #2.
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.