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Griffon and PayPal have been highlighted as Zacks Bull and Bear of the Day

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For Immediate Release

Chicago, IL – February 14, 2024 – Zacks Equity Research shares Griffon (GFF - Free Report) as the Bull of the Day and PayPal (PYPL - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Citigroup Inc. (C - Free Report) , BlackRock, Inc. (BLK - Free Report) and Truist Financial (TFC - Free Report) .

Here is a synopsis of all five stocks.

Bull of the Day:

Tuesday’s action following the hotter-than-expected CPI report was brutal. Everywhere you looked, stocks were taking a beating. The selling started early and got really bad before a late-day rally offered up a bit of mercy. Today may not be the day to come in and buy the dip, but investors should start getting their shopping lists together. One way to start that list is by looking at stocks with strongest earnings trends. Regardless of what happens to a stock’s price, earnings reflect the true state of the business.

Leaning on the Zacks Rank helps investors uncover these earnings superstars. One such stock is today’s Bull of the Day, Griffon. Griffon Corporation, through its subsidiaries, provides consumer and professional, and home and building products in the United States, Europe, Canada, Australia, and internationally. The company operates through two segments: Home and Building Products, and Consumer and Professional Products.

Griffon is currently a Zacks Rank #1 (Strong Buy) in the Diversified Operations industry which ranks in the Top 21% of our Zacks Industry Rank. In addition to the favorable rank, the stock enjoys a Zacks Value Style Score of B, Growth of A and Momentum of D to help it round out with a VGM Composite Score of A.

The reason for the favorable Zacks Rank is that analysts on Wall Street have been increasing their earnings estimates for the company. Over the last week alone, two analysts have increased their earnings estimates for the current year and next year. The bullish move has pushed up our Zacks Consensus Estimates from $4.09 to $4.80 for the current year and from $5.25 to $5.97 for next year.

Bear of the Day:

Fintech was once one of the hottest areas of the stock market. Back during the first round of Bitcoin frenzy, when the futures first started trading, all things fintech were going bonkers. Since then, the market has evolved and things are getting back to some normalcy. Most of these names are a far cry from their 2021 highs. Many of these stocks have been cut down 50, 60, even 70%. One such name is today’s Bear of the Day. I’m talking about PayPal.

PayPal Holdings, Inc. operates a technology platform that enables digital payments on behalf of merchants and consumers worldwide. It operates a two-sided network at scale that connects merchants and consumers that enables its customers to connect, transact, and send and receive payments through online and in person, as well as transfer and withdraw funds using various funding sources, such as bank accounts, PayPal or Venmo account balance, PayPal and Venmo branded credit products comprising its installment products, credit and debit cards, and cryptocurrencies, as well as other stored value products, including gift cards and eligible rewards.

PayPal is currently a Zacks Rank #5 (Strong Sell). The reason for the unfavorable Zacks Rank is that analysts all around Wall Street have been cutting their earnings estimates for the company. Over the last week alone, no fewer than 13 analysts have cut their current year estimates for the company. At least ten have done the same for next year’s numbers. Their bearish actions have cut PayPal’s current year Zacks Consensus Estimate from $5.53 to $5.06 while next year’s number is off from $6.28 to $5.56.

PayPal is in the Internet – Software industry that ranks in the Top 32% of our Zacks Industry Rank. Investors looking for other names within this industry have several names to choose from which are in the good graces of our Zacks Rank.

Additional content:

Citigroup (C - Free Report) Pushed by Fed to Speed Up Risk Management

Troubles for Citigroup Inc. do not seem to end. The bank, which had begun revamping its underlying technology, risk management and internal controls as part of remediation highlighted by the Office of the Comptroller of the Currency (“OCC”) and the Federal Reserve, is now being pushed by regulators to make urgent changes in the way it measures default risk of its trading partners.

In addition to this, the bank’s own auditors have found issues with a proposal to improve internal oversight, as reported by Reuters.

Notably, late last year, the Fed issued three notices concerning matters requiring immediate attention (MRIAs) to Citi. The MRIAs, which ranged from six months to a year, directed the bank to improve data and governance around how it sets aside capital to account for counterparty credit risks, a source with direct knowledge of the matter said.

In a separate incident, Citi’s internal audit unit said that some of the work related to risk management is not sufficient and that the bank has not fulfilled regulators’ requirements that the board of directors and the senior management team receive more information about firmwide risks.

The requirements relate to the bank’s ongoing risk management overhaul to address a pair of consent orders issued in 2020 by the Fed and the OCC.

In October 2020, regulators ordered Citi to improve its risk management and internal controls.

The OCC announced a $400-million fine against the company’s primary banking subsidiary and said that it would require Citi to seek the agency’s non-objection before making acquisitions.

Apart from this, the Fed said that it would require Citi to conduct a “gap analysis” of its risk management framework and internal controls system to determine what enhancements need to be made.

The above-mentioned consent orders from the OCC and the Fed followed several risk-related lapses at Citi, including an incorrect payment of $900 million made to the creditors of cosmetics company Revlon.

Moreover, according to a source with direct knowledge of the matter, the OCC conducted exams in September and October to assess whether Citi had made as much progress on data integrity as it claimed. But Citi failed the exams, which forced it to do additional work.

Citi stated, “Like any multi-year effort of this scale, progress isn’t linear and there are important learnings along the way that we’re incorporating into our efforts, including in the areas of regulatory reporting, infrastructure and data enhancement.”

Notably, the latest rebuke on Citi comes as CEO Jane Fraser enters her fourth year. The above-mentioned issues have made her task more complex as she carries out the company’s biggest overhaul in decades to boost profits and shares.

Currently, Citi is in the midst of a multi-year plan to improve efficiency and shareholder returns by simplifying its business structure, for which it is selling businesses and laying off thousands of employees.

The bank’s restructuring plan involves selling/winding down underperforming businesses and retail franchises, trimming management layers and eliminating 20,000 jobs, or 10% of its total workforce, by the end of 2026.

Such strategies provide an illustrative roadmap to the company achieving its medium-term target of return on average tangible common shareholder equity of 11-12%. This reflects that management expects improvement in C’s performance.

Moreover, the company’s effort to focus on revenue growth and reduce expenses over the long term will positively impact its earnings growth and likely revive shareholders' confidence in the stock.

Over the past six months, shares of Citi have gained 22.3% compared with the industry’s 11.6% growth.

Currently, Citigroup carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Restructuring Efforts by Other Banks

BlackRock, Inc. has been planning to eliminate 600 job positions. This accounts for nearly 3% of the company’s total global workforce.

Despite this elimination, BLK has been positive about its growth prospects. By the end of 2024, BlackRock expects to employ a larger workforce as it plans to expand certain parts of its business.

As part of its cost-saving plan, Truist Financial will likely shutter 4% of its branch network by March. Per the data from the Federal Deposit Insurance Corporation, TFC had 2,006 branches across 17 states and Washington, DC, as of Dec 29, 2023.

The primary reasons behind branch closures, as stated by Truist Financial spokesperson, are lower branch traffic and transaction volume. The spokesperson also noted that nine branches in North Carolina and seven in the Washington, DC, metropolitan area are slated to close by March.

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