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Constellation Energy and Winnebago Industries have been highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – December 14, 2023 – Zacks Equity Research shares Constellation Energy Corp. (CEG - Free Report) as the Bull of the Day and Winnebago Industries (WGO - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Applied Optoelectronics (AAOI - Free Report) , IonQ (IONQ - Free Report) and Vertiv (VRT - Free Report) .
Constellation Energy Corp. is a Zacks Rank #1 (Strong Buy) stock, and a compelling standout in the Utilities sector because of its exposure to nuclear energy. Furthermore, analysts are forecasting very strong long-term EPS share growth, which combined with its historically discounted valuation makes it a top-tier investment consideration.
Company Summary
Constellation Energy Corporation is the country's leading producer of carbon-free energy, powering 20 million homes and making up 10% of the nation's renewable electricity. Through its diversified energy assets, including nuclear, hydro, wind, and solar generation facilities it is leading the industry in the transition to renewable utilities.
Constellation as set ambitious goals intending to produce 95% carbon-free electricity by 2030, 100% carbon-free electricity by 2040, a 100% reduction of operations-driven emissions by 2040 and providing 100 percent of business customers with customized data to help them reduce their own carbon footprints.
Earnings Estimates
Analysts have been steadily revising earnings estimates over the last five months, giving it a top Zacks rank, and powering a 36% YTD return. Current quarter earnings estimates have been revised higher by 28% and are expected to climb 1,500% YoY to $1.64 per share. FY23 earnings estimates have increased by 34% and are projected to climb to $7.44 per share.
Valuation
Even with the strong appreciation in the stock, CEG still boasts a very fair relative valuation. It is currently trading at a one year forward earnings multiple of 15.4x, below the industry average of 17.2x, and below its two-year median of 20.3x.
Additionally, with EPS forecast to grow an average 26.3% annually over the next 3-5 years, CEG also enjoys a bargain PEG ratio. Considering the growth estimates and earnings multiple its PEG ratio is 0.58x, indicating a value investing opportunity.
Bottom Line
For investors looking to add exposure to alternative energy stocks, Constellation Energy Corporation is a worthy consideration. Its ambitious and innovative vision, along with its reasonable valuation and strong growth estimates also make it a unique option in the utilities sector.
Winnebago Industries, the country's leading producer of recreational vehicles, is bumping up against the obstacle of late business cycle economics, as consumers reduce discretionary spending and tighten budgets. In addition to a Zacks Rank #5 (Strong Sell) rating, it still has a historically elevated valuation, possibly not pricing in a further slowdown in consumer spending.
Because of these developments, I think investors should look for other opportunities.
Earnings Estimates
Analysts have unanimously lowered the expectation for Winnebago Industries earnings, giving it the lowest Zacks Ranks.
Current quarter earnings have declined by -12% and are forecast to fall -40% YoY to $1.25 per share. FY24 earnings have been revised lower by -5.6% and are projected to decrease by -14.3% YoY to $6.57 per share.
Technical Perspective
WGO stock has been trading in a wide range all year and was just denied by the upper level of resistance. I think it is likely that the lower level of support will be retested at some point in early 2024, making this stock one investors should avoid.
Valuation
Winnebago Industries is trading at a one year forward earnings multiple of 10.5x, which is below the industry average and above its five-year median of 9x. The company has also been increasing the share count over the last several years, and the shares outstanding jumped 11% in just the last year.
Bottom Line
Although Winnebago Industries is an industry leading company that likely has a positive long-term future, the near-term prospects for the stocks are not good. Investors should explore other industries as the market and economy digest the shifting environment.
Additional content:
3 Tech Stock Crushing the "Magnificent 7" in 2023
In the current investment landscape, the focus has shifted from the FANG stocks, and a new set of influential stocks, known as the Magnificent Seven Stocks, has emerged. These stocks include Alphabet, Apple, Amazon, Meta Platforms, Microsoft, Nvidia and Tesla. These companies are considered the new leaders in the stock market.
There is a pureplay ETF called Roundhill Magnificent Seven ETF on this theme. The ETF has surged more than 30% this year. Individually, Apple, Alphabet and Microsoft are up more than 50% each, Meta shares are up about 165%, Amazon has gained 70%, Nvidia has skyrocketed about 233% and Tesla is up nearly 118% this year.
But there are three tech stocks that have beaten even the best of Magnificent Seven, i.e., Nvidia.
Inside the Dominance of Magnificent Seven
The Magnificent Seven stocks have a significant impact on the Nasdaq index, as they collectively account for a major portion of its total weighting. Despite recent fluctuations in the market, some of the Magnificent Seven Stocks, including Apple, Microsoft, Amazon, Google, Nvidia, and Meta, continue to exert a substantial impact on the tech-heavy Nasdaq index mainly due to their meaningful positions in the Artificial Intelligence (AI) space. The AI boom made them stars in 2023.
What About Other Tech Jewels?
Even in the narrow market breadth, some tech companies shined. With the Fed expected to go slow on its rate hike spree in 2024 (or even cut rates in late 2024), overall tech space should do well as the area thrives better in a low-rate environment.
Already, market breadth has continued to broaden, and smaller tech companies are likely to excel. Plus, the AI boom is ongoing, which is expected to push the space to another height next year.
Stock to Watch
Below, we highlight those winning tech stocks that trumped even Magnificent Seven in 2023. Since these stocks have a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), these winners have more room for growth going into 2024.
Applied Optoelectronics – Up 888.3% YTD
Applied Optoelectronics, Inc. designs, develops and manufactures advanced optical devices, packaged optical components, optical subsystems, laser transmitters and fiber optic transceivers. The Zacks Rank #3 company belongs to a top-ranked Zacks sector (top 31%).
IonQ– Up 268.8% YTD
IonQ Inc. provides a quantum system through the cloud on Amazon Braket, Microsoft Azure and Google Cloud, as well as through direct API access. IonQ Inc., formerly known as dMY Technology Group Inc. III., is based in COLLEGE PARK, Md. The Zacks Rank #2 company hails from a top-ranked Zacks industry (top 36%) and sector (top 31%).
Vertiv– Up 271.7% YTD
Vertiv Holdings Co provides digital infrastructure and continuity solutions. It offers hardware, software, analytics and ongoing services. The Zacks Rank #1 company belongs to a top-ranked Zacks industry (top 21%) and sector (top 31%). Two out of three analysts upped their earnings estimates for the upcoming quarter over the past one month.
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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Constellation Energy and Winnebago Industries have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – December 14, 2023 – Zacks Equity Research shares Constellation Energy Corp. (CEG - Free Report) as the Bull of the Day and Winnebago Industries (WGO - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Applied Optoelectronics (AAOI - Free Report) , IonQ (IONQ - Free Report) and Vertiv (VRT - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Constellation Energy Corp. is a Zacks Rank #1 (Strong Buy) stock, and a compelling standout in the Utilities sector because of its exposure to nuclear energy. Furthermore, analysts are forecasting very strong long-term EPS share growth, which combined with its historically discounted valuation makes it a top-tier investment consideration.
Company Summary
Constellation Energy Corporation is the country's leading producer of carbon-free energy, powering 20 million homes and making up 10% of the nation's renewable electricity. Through its diversified energy assets, including nuclear, hydro, wind, and solar generation facilities it is leading the industry in the transition to renewable utilities.
Constellation as set ambitious goals intending to produce 95% carbon-free electricity by 2030, 100% carbon-free electricity by 2040, a 100% reduction of operations-driven emissions by 2040 and providing 100 percent of business customers with customized data to help them reduce their own carbon footprints.
Earnings Estimates
Analysts have been steadily revising earnings estimates over the last five months, giving it a top Zacks rank, and powering a 36% YTD return. Current quarter earnings estimates have been revised higher by 28% and are expected to climb 1,500% YoY to $1.64 per share. FY23 earnings estimates have increased by 34% and are projected to climb to $7.44 per share.
Valuation
Even with the strong appreciation in the stock, CEG still boasts a very fair relative valuation. It is currently trading at a one year forward earnings multiple of 15.4x, below the industry average of 17.2x, and below its two-year median of 20.3x.
Additionally, with EPS forecast to grow an average 26.3% annually over the next 3-5 years, CEG also enjoys a bargain PEG ratio. Considering the growth estimates and earnings multiple its PEG ratio is 0.58x, indicating a value investing opportunity.
Bottom Line
For investors looking to add exposure to alternative energy stocks, Constellation Energy Corporation is a worthy consideration. Its ambitious and innovative vision, along with its reasonable valuation and strong growth estimates also make it a unique option in the utilities sector.
Bear of the Day:
Winnebago Industries, the country's leading producer of recreational vehicles, is bumping up against the obstacle of late business cycle economics, as consumers reduce discretionary spending and tighten budgets. In addition to a Zacks Rank #5 (Strong Sell) rating, it still has a historically elevated valuation, possibly not pricing in a further slowdown in consumer spending.
Because of these developments, I think investors should look for other opportunities.
Earnings Estimates
Analysts have unanimously lowered the expectation for Winnebago Industries earnings, giving it the lowest Zacks Ranks.
Current quarter earnings have declined by -12% and are forecast to fall -40% YoY to $1.25 per share. FY24 earnings have been revised lower by -5.6% and are projected to decrease by -14.3% YoY to $6.57 per share.
Technical Perspective
WGO stock has been trading in a wide range all year and was just denied by the upper level of resistance. I think it is likely that the lower level of support will be retested at some point in early 2024, making this stock one investors should avoid.
Valuation
Winnebago Industries is trading at a one year forward earnings multiple of 10.5x, which is below the industry average and above its five-year median of 9x. The company has also been increasing the share count over the last several years, and the shares outstanding jumped 11% in just the last year.
Bottom Line
Although Winnebago Industries is an industry leading company that likely has a positive long-term future, the near-term prospects for the stocks are not good. Investors should explore other industries as the market and economy digest the shifting environment.
Additional content:
3 Tech Stock Crushing the "Magnificent 7" in 2023
In the current investment landscape, the focus has shifted from the FANG stocks, and a new set of influential stocks, known as the Magnificent Seven Stocks, has emerged. These stocks include Alphabet, Apple, Amazon, Meta Platforms, Microsoft, Nvidia and Tesla. These companies are considered the new leaders in the stock market.
There is a pureplay ETF called Roundhill Magnificent Seven ETF on this theme. The ETF has surged more than 30% this year. Individually, Apple, Alphabet and Microsoft are up more than 50% each, Meta shares are up about 165%, Amazon has gained 70%, Nvidia has skyrocketed about 233% and Tesla is up nearly 118% this year.
But there are three tech stocks that have beaten even the best of Magnificent Seven, i.e., Nvidia.
Inside the Dominance of Magnificent Seven
The Magnificent Seven stocks have a significant impact on the Nasdaq index, as they collectively account for a major portion of its total weighting. Despite recent fluctuations in the market, some of the Magnificent Seven Stocks, including Apple, Microsoft, Amazon, Google, Nvidia, and Meta, continue to exert a substantial impact on the tech-heavy Nasdaq index mainly due to their meaningful positions in the Artificial Intelligence (AI) space. The AI boom made them stars in 2023.
What About Other Tech Jewels?
Even in the narrow market breadth, some tech companies shined. With the Fed expected to go slow on its rate hike spree in 2024 (or even cut rates in late 2024), overall tech space should do well as the area thrives better in a low-rate environment.
Already, market breadth has continued to broaden, and smaller tech companies are likely to excel. Plus, the AI boom is ongoing, which is expected to push the space to another height next year.
Stock to Watch
Below, we highlight those winning tech stocks that trumped even Magnificent Seven in 2023. Since these stocks have a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), these winners have more room for growth going into 2024.
Applied Optoelectronics – Up 888.3% YTD
Applied Optoelectronics, Inc. designs, develops and manufactures advanced optical devices, packaged optical components, optical subsystems, laser transmitters and fiber optic transceivers. The Zacks Rank #3 company belongs to a top-ranked Zacks sector (top 31%).
IonQ– Up 268.8% YTD
IonQ Inc. provides a quantum system through the cloud on Amazon Braket, Microsoft Azure and Google Cloud, as well as through direct API access. IonQ Inc., formerly known as dMY Technology Group Inc. III., is based in COLLEGE PARK, Md. The Zacks Rank #2 company hails from a top-ranked Zacks industry (top 36%) and sector (top 31%).
Vertiv– Up 271.7% YTD
Vertiv Holdings Co provides digital infrastructure and continuity solutions. It offers hardware, software, analytics and ongoing services. The Zacks Rank #1 company belongs to a top-ranked Zacks industry (top 21%) and sector (top 31%). Two out of three analysts upped their earnings estimates for the upcoming quarter over the past one month.
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.