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Nu Holdings and Tyson Foods have been highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – October 17, 2023 – Zacks Equity Research shares Nu Holdings Ltd. (NU - Free Report) as the Bull of the Day and Tyson Foods (TSN - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Pfizer (PFE - Free Report) and BioNTech (BNTX - Free Report) .
Nu Holdings Ltd., a Zacks Rank #1 (Strong Buy), is an international provider of digital banking services. NU shares are widely outperforming the market this year with the backing of a leading industry group. The stock is hitting a series of 52-week highs and displaying relative strength as buying pressure accumulates in this highly-ranked stock.
Operating at the intersection of technology and financial services, Nu Holdings is part of the Zacks Technology Services industry group. This group ranks in the top 38% out of more than 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months. The industry has been steadily outperforming the market this year with a 25.7% return.
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1. It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.
Company Description
Nu Holdings provides digital financial services in Brazil, Mexico, Columbia, as well as internationally. The company offers credit and debit cards, mobile payment solutions, and savings solutions for individuals and businesses.
In addition, the company offers NuCrypto, which enables the buying and selling of cryptocurrencies through the Nu app; NuInvest, an investment product that provides equity, fixed-income, options and ETF products; and NuInsurance, an insurance offering that helps customers secure life insurance and funeral benefits. Nu Holdings was founded in 2013 and is headquartered in Sao Paulo, Brazil.
Earnings Trends and Future Estimates
NU has built up an impressive earnings history, surpassing earnings estimates in each of the last four quarters. Back in August, the company reported second-quarter earnings of $0.06/share, a 50% surprise over the $0.04/share consensus estimate. NU has delivered a trailing four-quarter average earnings surprise of 120.83%.
Analysts covering NU are in agreement and have been increasing their earnings estimates as of late. For the current fiscal year, analysts have increased earnings estimates by 23.53% in the past 60 days. The 2023 Zacks Consensus EPS Estimate now stands at $0.21/share, reflecting a staggering potential growth rate of 425% relative to the prior year. Revenues are projected to surge 61.9% to $7.76 billion.
Let’s Get Technical
NU shares have advanced nearly 95% this year. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.
Notice how the 200-day (red line) moving average is sloping up. The stock has been making a series of higher highs and recently climbed back above its 50-day moving average (blue line). With both strong fundamentals and technicals, NU is poised to continue its outperformance.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Nu Holdings has recently witnessed positive revisions. As long as this trend remains intact (and NU continues to deliver earnings beats), the stock will likely continue its bullish run into the end of this year and beyond.
Bottom Line
The future looks bright for this highly-ranked, leading stock. Momentum has picked up in October as the market attempts to regain its footing.
Backed by a leading industry group and impressive history of earnings beats, it’s not difficult to see why this company is a compelling investment. Robust fundamentals combined with an appealing technical trend certainly justify adding shares to the mix.
Tyson Foods is a processor and marketer of chicken, pork, and beef. The company has been struggling due to high inflation and low pricing power for its product offerings. Tyson Foods has witnessed elevated input costs and has been dealing with weak margins for several quarters. Weakness in the consumer staples sector has also contributed to poor stock performance.
A member of the S&P 500, Tyson Foods manufactures and markets its products under recognized brand names such as Jimmy Dean, Hillshire Farm, and Ball Park. The company sells its products in more than 80 countries through its sales staff to grocery retailers and wholesalers, meat distributors, chain restaurants, convenience stores and hospitals. Tyson Foods was founded in 1935 and is headquartered in Springdale, AR.
The Zacks Rundown
TSN stock is a Zacks Rank #5 (Strong Sell) and is a component of the Zacks Food – Meat Products industry group, which ranks in the bottom 9% out of more than 250 Zacks Ranked Industries. As such, we expect this industry group as a whole to underperform the market over the next 3 to 6 months, just as it has over the course of the year.
Candidates in the bottom tiers of industries can often be potential short candidates. While individual stocks have the ability to outperform even when included in a poorly-performing industry group, the inclusion in a weaker group serves as a headwind for any potential rallies and the journey forward is that much more difficult.
Despite the underperformance this year, stocks in this group remain relatively overvalued.
As a part of this group, TSN stock has experienced considerable volatility in 2023. Shares recently touched a 52-week low even as the market has bounced off the September lows.
Recent Earnings Misses and Deteriorating Outlook
TSN has fallen short of earnings estimates in each of the last four quarters. The food company most recently reported fiscal third-quarter earnings back in August of $0.15/share, missing the $0.34/share consensus EPS estimate by 55.9%. Earnings plunged 92.3% from the same quarter in the prior year.
Tyson Foods has missed earnings estimates by an average of 50.5% over the past four quarters. Consistently falling short of earnings estimates is a recipe for underperformance, and TSN is no exception.
The company has been on the receiving end of negative earnings estimate revisions as of late. For the current fiscal year, analysts have decreased estimates by 3.79% in the past 60 days. The fiscal 2023 Zacks Consensus EPS Estimate now stands at $1.27/share, translating to negative growth of -85.5% relative to last year.
Falling earnings estimates are a huge red flag and need to be respected. Negative growth year-over-year is the type of trend that bears like to see.
Technical Outlook
TSN stock is in a sustained downtrend. Shares have plunged below both the 50-day and 200-day moving averages. The stock is making a series of lower lows, with no respite from the selling in sight. Both moving averages have rolled over and are sloping down – another good sign for the bears.
While not the most accurate indicator, TSN stock has also experienced what is known as a ‘death cross’, wherein the stock’s 50-day moving average crosses below its 200-day moving average. Tyson Foods would have to make a serious move to the upside and show increasing earnings estimate revisions to warrant taking any long positions in the stock. TSN shares have fallen more than 24% in the past year alone.
Final Thoughts
A deteriorating fundamental and technical backdrop show that this stock is not set to hit new highs anytime soon. The fact that TSN is included in one of the worst-performing industry groups provides yet another headwind to a long list of concerns. A history of earnings misses will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend.
Shares continue to experience substantial volatility and have widely underperformed this year. With negative earnings estimate revisions continuing to pile up, this stock should be avoided as there are plenty of better alternatives in the current market environment.
Additional content:
Pfizer (PFE - Free Report) Cuts 2023 Outlook as Covid Product Demand Falls
Pfizer slashed its previously issued revenue guidance for 2023 due to lower-than-expected demand for its COVID products, COVID-19 vaccine, Comirnaty, and its oral antiviral pill for COVID, Paxlovid.
Pfizer records direct sales and alliance revenues from its partner, BioNTech for Comirnaty, and product revenues from Paxlovid.
The revenue guidance was lowered from $67.0 to $70.0 billion to $58.0 to $61.0 billion, which includes a $7 billion cut in Paxlovid revenues and a $2 billion reduction in Comirnaty revenues. The earlier revenue guidance included approximately $13.5 billion in sales from Comirnaty and Paxlovid sales of approximately $8 billion. Full-year 2023 combined revenues for Paxlovid and Comirnaty are now expected to be approximately $12.5 billion compared with $21.5 billion expected previously.
Excluding COVID-19 products, Pfizer continues to expect its revenues to rise 6% to 8% on an operational basis in 2023 as sales from non-COVID drugs remain strong. With the demand for COVID products coming in lower than expected, Pfizer announced cost cuts, including layoffs, which are expected to deliver targeted savings of at least $3.5 billion. Of this, approximately $1.0 billion is expected to be realized in 2023 and at least $2.5 billion is expected to be realized in 2024.
In the third quarter, Pfizer will record a non-cash charge of $5.5 billion as COVID inventory write-offs in the cost of goods sold. As a result of the lower-than-expected COVID revenues and the inventory write-offs, adjusted EPS is expected in the range of $1.45 to $1.65, down from $3.25 to $3.45 expected previously.
Pfizer’s shares were down almost 2.5% on Friday in response to the guidance cut. Pfizer’s stock has declined 37.4% so far this year against an increase of 8.5% for the industry.
Pfizer said it has amended its supply agreement with the U.S. government for Paxlovid and the latter will return approximately 7.9 million treatment courses of Emergency Use Authorized (EUA)-labeled U.S. government inventory at the end of 2023. In exchange, the U.S. government will receive credit for future NDA-labeled treatment courses from Pfizer.
From the beginning of 2024, Pfizer will begin selling Paxlovid in traditional commercial markets in the United States, with prices to be negotiated with payers. Earlier. Pfizer had said it will transition from government markets to commercial markets by the second half of 2023.
Pfizer reduced its 2023 outlook for Paxlovid due to the $4.2 billion non-cash revenue reversal for the return as well as the delay in transition to the commercial market, as discussed in the previous parah. The Comirnaty guidance was lowered by $2 billion due to lower-than-expected vaccination rates.
During the pandemic, Pfizer gave the world the first and most widely used vaccine, Comirnaty, and an oral treatment for COVID-19, Paxlovid. The profits that Pfizer generated from its COVID products in 2021 and 2022 strengthened its cash position, which is being used to make acquisitions, increase dividends, buy back shares and reduce debt. The cash enabled it to acquire Arena, ReViral, Biohaven and Global Blood Therapeutics in 2022.
It also allowed Pfizer to increase investments in R&D and SI&A to support its expected new product launches. Overall, the profits and cash from COVID products allowed Pfizer to invest in support of its growth plans for the second half of this decade.
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/performance for information about the performance numbers displayed in this press release.
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Nu Holdings and Tyson Foods have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – October 17, 2023 – Zacks Equity Research shares Nu Holdings Ltd. (NU - Free Report) as the Bull of the Day and Tyson Foods (TSN - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Pfizer (PFE - Free Report) and BioNTech (BNTX - Free Report) .
Here is a synopsis of all four stocks.
Bull of the Day:
Nu Holdings Ltd., a Zacks Rank #1 (Strong Buy), is an international provider of digital banking services. NU shares are widely outperforming the market this year with the backing of a leading industry group. The stock is hitting a series of 52-week highs and displaying relative strength as buying pressure accumulates in this highly-ranked stock.
Operating at the intersection of technology and financial services, Nu Holdings is part of the Zacks Technology Services industry group. This group ranks in the top 38% out of more than 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months. The industry has been steadily outperforming the market this year with a 25.7% return.
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1. It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.
Company Description
Nu Holdings provides digital financial services in Brazil, Mexico, Columbia, as well as internationally. The company offers credit and debit cards, mobile payment solutions, and savings solutions for individuals and businesses.
In addition, the company offers NuCrypto, which enables the buying and selling of cryptocurrencies through the Nu app; NuInvest, an investment product that provides equity, fixed-income, options and ETF products; and NuInsurance, an insurance offering that helps customers secure life insurance and funeral benefits. Nu Holdings was founded in 2013 and is headquartered in Sao Paulo, Brazil.
Earnings Trends and Future Estimates
NU has built up an impressive earnings history, surpassing earnings estimates in each of the last four quarters. Back in August, the company reported second-quarter earnings of $0.06/share, a 50% surprise over the $0.04/share consensus estimate. NU has delivered a trailing four-quarter average earnings surprise of 120.83%.
Analysts covering NU are in agreement and have been increasing their earnings estimates as of late. For the current fiscal year, analysts have increased earnings estimates by 23.53% in the past 60 days. The 2023 Zacks Consensus EPS Estimate now stands at $0.21/share, reflecting a staggering potential growth rate of 425% relative to the prior year. Revenues are projected to surge 61.9% to $7.76 billion.
Let’s Get Technical
NU shares have advanced nearly 95% this year. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.
Notice how the 200-day (red line) moving average is sloping up. The stock has been making a series of higher highs and recently climbed back above its 50-day moving average (blue line). With both strong fundamentals and technicals, NU is poised to continue its outperformance.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Nu Holdings has recently witnessed positive revisions. As long as this trend remains intact (and NU continues to deliver earnings beats), the stock will likely continue its bullish run into the end of this year and beyond.
Bottom Line
The future looks bright for this highly-ranked, leading stock. Momentum has picked up in October as the market attempts to regain its footing.
Backed by a leading industry group and impressive history of earnings beats, it’s not difficult to see why this company is a compelling investment. Robust fundamentals combined with an appealing technical trend certainly justify adding shares to the mix.
Bear of the Day:
Tyson Foods is a processor and marketer of chicken, pork, and beef. The company has been struggling due to high inflation and low pricing power for its product offerings. Tyson Foods has witnessed elevated input costs and has been dealing with weak margins for several quarters. Weakness in the consumer staples sector has also contributed to poor stock performance.
A member of the S&P 500, Tyson Foods manufactures and markets its products under recognized brand names such as Jimmy Dean, Hillshire Farm, and Ball Park. The company sells its products in more than 80 countries through its sales staff to grocery retailers and wholesalers, meat distributors, chain restaurants, convenience stores and hospitals. Tyson Foods was founded in 1935 and is headquartered in Springdale, AR.
The Zacks Rundown
TSN stock is a Zacks Rank #5 (Strong Sell) and is a component of the Zacks Food – Meat Products industry group, which ranks in the bottom 9% out of more than 250 Zacks Ranked Industries. As such, we expect this industry group as a whole to underperform the market over the next 3 to 6 months, just as it has over the course of the year.
Candidates in the bottom tiers of industries can often be potential short candidates. While individual stocks have the ability to outperform even when included in a poorly-performing industry group, the inclusion in a weaker group serves as a headwind for any potential rallies and the journey forward is that much more difficult.
Despite the underperformance this year, stocks in this group remain relatively overvalued.
As a part of this group, TSN stock has experienced considerable volatility in 2023. Shares recently touched a 52-week low even as the market has bounced off the September lows.
Recent Earnings Misses and Deteriorating Outlook
TSN has fallen short of earnings estimates in each of the last four quarters. The food company most recently reported fiscal third-quarter earnings back in August of $0.15/share, missing the $0.34/share consensus EPS estimate by 55.9%. Earnings plunged 92.3% from the same quarter in the prior year.
Tyson Foods has missed earnings estimates by an average of 50.5% over the past four quarters. Consistently falling short of earnings estimates is a recipe for underperformance, and TSN is no exception.
The company has been on the receiving end of negative earnings estimate revisions as of late. For the current fiscal year, analysts have decreased estimates by 3.79% in the past 60 days. The fiscal 2023 Zacks Consensus EPS Estimate now stands at $1.27/share, translating to negative growth of -85.5% relative to last year.
Falling earnings estimates are a huge red flag and need to be respected. Negative growth year-over-year is the type of trend that bears like to see.
Technical Outlook
TSN stock is in a sustained downtrend. Shares have plunged below both the 50-day and 200-day moving averages. The stock is making a series of lower lows, with no respite from the selling in sight. Both moving averages have rolled over and are sloping down – another good sign for the bears.
While not the most accurate indicator, TSN stock has also experienced what is known as a ‘death cross’, wherein the stock’s 50-day moving average crosses below its 200-day moving average. Tyson Foods would have to make a serious move to the upside and show increasing earnings estimate revisions to warrant taking any long positions in the stock. TSN shares have fallen more than 24% in the past year alone.
Final Thoughts
A deteriorating fundamental and technical backdrop show that this stock is not set to hit new highs anytime soon. The fact that TSN is included in one of the worst-performing industry groups provides yet another headwind to a long list of concerns. A history of earnings misses will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend.
Shares continue to experience substantial volatility and have widely underperformed this year. With negative earnings estimate revisions continuing to pile up, this stock should be avoided as there are plenty of better alternatives in the current market environment.
Additional content:
Pfizer (PFE - Free Report) Cuts 2023 Outlook as Covid Product Demand Falls
Pfizer slashed its previously issued revenue guidance for 2023 due to lower-than-expected demand for its COVID products, COVID-19 vaccine, Comirnaty, and its oral antiviral pill for COVID, Paxlovid.
Pfizer records direct sales and alliance revenues from its partner, BioNTech for Comirnaty, and product revenues from Paxlovid.
The revenue guidance was lowered from $67.0 to $70.0 billion to $58.0 to $61.0 billion, which includes a $7 billion cut in Paxlovid revenues and a $2 billion reduction in Comirnaty revenues. The earlier revenue guidance included approximately $13.5 billion in sales from Comirnaty and Paxlovid sales of approximately $8 billion. Full-year 2023 combined revenues for Paxlovid and Comirnaty are now expected to be approximately $12.5 billion compared with $21.5 billion expected previously.
Excluding COVID-19 products, Pfizer continues to expect its revenues to rise 6% to 8% on an operational basis in 2023 as sales from non-COVID drugs remain strong. With the demand for COVID products coming in lower than expected, Pfizer announced cost cuts, including layoffs, which are expected to deliver targeted savings of at least $3.5 billion. Of this, approximately $1.0 billion is expected to be realized in 2023 and at least $2.5 billion is expected to be realized in 2024.
In the third quarter, Pfizer will record a non-cash charge of $5.5 billion as COVID inventory write-offs in the cost of goods sold. As a result of the lower-than-expected COVID revenues and the inventory write-offs, adjusted EPS is expected in the range of $1.45 to $1.65, down from $3.25 to $3.45 expected previously.
Pfizer’s shares were down almost 2.5% on Friday in response to the guidance cut. Pfizer’s stock has declined 37.4% so far this year against an increase of 8.5% for the industry.
Pfizer said it has amended its supply agreement with the U.S. government for Paxlovid and the latter will return approximately 7.9 million treatment courses of Emergency Use Authorized (EUA)-labeled U.S. government inventory at the end of 2023. In exchange, the U.S. government will receive credit for future NDA-labeled treatment courses from Pfizer.
From the beginning of 2024, Pfizer will begin selling Paxlovid in traditional commercial markets in the United States, with prices to be negotiated with payers. Earlier. Pfizer had said it will transition from government markets to commercial markets by the second half of 2023.
Pfizer reduced its 2023 outlook for Paxlovid due to the $4.2 billion non-cash revenue reversal for the return as well as the delay in transition to the commercial market, as discussed in the previous parah. The Comirnaty guidance was lowered by $2 billion due to lower-than-expected vaccination rates.
During the pandemic, Pfizer gave the world the first and most widely used vaccine, Comirnaty, and an oral treatment for COVID-19, Paxlovid. The profits that Pfizer generated from its COVID products in 2021 and 2022 strengthened its cash position, which is being used to make acquisitions, increase dividends, buy back shares and reduce debt. The cash enabled it to acquire Arena, ReViral, Biohaven and Global Blood Therapeutics in 2022.
It also allowed Pfizer to increase investments in R&D and SI&A to support its expected new product launches. Overall, the profits and cash from COVID products allowed Pfizer to invest in support of its growth plans for the second half of this decade.
Zacks Rank & Stocks to Consider
Pfizer currently has a Zacks Rank #3 (Hold).
Pfizer Inc. price-consensus-chart | Pfizer Inc. Quote
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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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.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index.Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.