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Toyota Motor and IPG Photonics have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – April 10, 2024 – Zacks Equity Research shares Toyota Motor Corp. (TM - Free Report) as the Bull of the Day and IPG Photonics (IPGP - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Korn Ferry (KFY - Free Report) , Staffing 360 Solutions, Inc. (STAF - Free Report) and DLH Holdings Corp. (DLHC - Free Report) .
Toyota Motor Corp., a Zacks Rank #1 (Strong Buy), manufactures and sells passenger vehicles, minivans, commercial vehicles, and related parts and accessories. One of the leading global automakers in terms of sales and production, Toyota continues to experience strong demand for its robust lineup of vehicles.
The stock has responded in kind, breaking out to an all-time high in 2024. TM shares are displaying relative strength as buying pressure accumulates in this market leader.
The company is part of the Zacks Automotive – Foreign industry group, which currently ranks in the top 23% 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. This group is widely outperforming the market so far this year.
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
Based out of Japan, Toyota's product portfolio consists of a full range of models. Its automotive business caters to its domestic market as well as markets in North America, Europe, Asia, and the Middle East. The company has several manufacturing facilities across the globe that produce popular vehicle brands including Lexus, Toyota, Scion, Hino, and Daihatsu.
A durable lineup of trucks and sport utility vehicles are set to drive sales volumes. The company's electric vehicle (EV) push also represents a major tailwind. The Japanese auto giant aims to generate 40% of its global sales from EVs by 2025 and 70% by 2030. Toyota plans to invest $37 billion in EVs through the end of this decade.
Furthermore, Toyota provides financial services such as retail financing and leasing, wholesale financing, insurance, and credit cards. The company also operates GAZOO.com, a web portal for automobile information.
Earnings Trends and Future Estimates
Toyota has established an impressive earnings history, beating estimates in each of the last four quarters. Most recently, the company reported fiscal third-quarter earnings of $6.81/share, an 86.07% surprise over the $3.66/share consensus estimate.
Toyota delivered a trailing four-quarter average earnings surprise of 67.6%. Consistently beating earnings estimates is a recipe for success.
Analysts covering TM are in agreement and have been raising their earnings estimates lately. For the current fiscal year, analysts bumped up earnings estimates by 15.7% in the past 60 days. The Zacks Consensus Estimate now stands at $23.06/share, reflecting potential growth of 73.6% relative to the prior year. Revenues are projected to have risen 10% to $302.2 billion.
Let's Get Technical
TM shares advanced more than 75% over the last 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 both the 50-day (blue line) and 200-day (red line) moving averages are sloping up. The stock has been making a series of 52-week highs and recently surpassed its former all-time high. With both strong fundamental and technical indicators, Toyota 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, Toyota has recently witnessed positive revisions. As long as this trend remains intact (and TM continues to deliver earnings beats), the stock will likely continue its bullish run this year.
Bottom Line
Toyota repurchased 28 million shares in its fiscal third quarter and increased its dividend 5 times over the past 5 years. The company's commitment to maximize shareholder value is another compelling reason to consider investing in TM stock.
Backed by a leading industry group and impressive history of earnings beats, it's not difficult to see why Toyota is an appealing investment. An attractive technical trend along with robust fundamentals paint a bullish picture moving forward.
IPG Photonics, a Zacks Rank #5 (Strong Sell) stock, develops and manufactures high-performance fiber lasers, fiber amplifiers, and diode lasers used for diverse applications such as materials processing and medical enhancements. The company also offers integrated laser systems used for fine welding, cutting, drilling, and cladding.
Founded in 1990, Massachusetts-based IPG Photonics markets its products to original equipment manufacturers, system integrators, and end users through its direct sales force, as well as through agreements with independent sales representatives and distributors.
The Zacks Rundown
IPG Photonics has been severely underperforming the market over the past year. The stock experienced a climax top in July of 2023 and has been in a price downtrend ever since. IPGP is hitting a series of lower lows this year and represents a compelling short opportunity as volatility begins to rise.
IPGP is part of the Zacks Lasers Systems and Components industry group, which currently ranks in the bottom 1% out of approximately 250 industries. Because this industry is ranked in the bottom half of all Zacks Ranked Industries, we expect it to underperform the market over the next 3 to 6 months, just as it has so far this year.
Candidates in the bottom half of industry groups can often represent potential short candidates. While individual stocks have the ability to outperform even when included in weak industries, their industry association serves as a headwind for any potential rallies. IPG Photonics is fighting an uphill battle and the stock is confirming this notion as it continues to lag behind.
Recent Earnings and Deteriorating Forecasts
The laser developer has a mixed history in terms of earnings. IPG Photonics most recently reported fiscal first-quarter earnings of $0.89/share, missing the $0.95/share consensus estimate by 6.32%. The company has missed the earnings mark in two of the past five quarters.
Analysts covering IPGP decreased their earnings estimates recently. For the current quarter, estimates have been slashed by 52.48% in the past 60 days. The Zacks Consensus Estimate sits at $0.48/share, reflecting a 61.9% drop from the year-ago period.
Earnings are projected to plummet 30.2% in fiscal 2024, while sales are anticipated to fall 10.6% to $1.15 billion. These are exactly the types of trends that have the bears laser-focused.
Technical Outlook
IPG Photonics has been steadily falling since last year and has now established a well-defined downtrend. Notice how both the 50-day (blue line) and 200-day (red line) moving averages are sloping down. Shares have declined more than 20% in the past year, all while the major U.S. indices soar to new heights.
IPGP stock has also experienced what is known as a "death cross", whereby its 50-day moving average crosses below its 200-day moving average. IPG Photonics 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. Shares remain in negative territory this year while the general market is showing strength.
Final Thoughts
A deteriorating fundamental and technical backdrop show that this stock is not set to laser its way back to new highs anytime soon. The fact that IPGP 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 and falling future earnings estimates will likely serve as a ceiling to any potential rallies, nurturing the stock's downtrend. Potential investors may want to give this stock the cold shoulder, or perhaps include it as part of a short or hedge strategy. Bulls will want to steer clear of IPGP until the situation shows major signs of improvement.
Additional content:
Terrific Jobs Report a Godsend for These 3 Staffing Stocks
The labor market ended the first three months of the year on a solid footing, with jobs being added steadily and the unemployment rate edging lower. Job additions easily topped expectations in March despite higher interest rates, a tell-tale sign that the economy remains insulated from looming recessionary threats.
Nonfarm payrolls increased by 303,000 in March, way higher than analysts' projections of payrolls increasing by 200,000, per the Bureau of Labor Statistics. The jump in new jobs was the most since May 2023. Job creations, by the way, remained above the threshold of 100,000 job additions per month, signifying hiring by employers across all working-age populaces.
Interestingly, job additions in February were lowered to 270,000 from the prior 275,000, while January's job additions were raised to 256,000 from 229,000. However, job additions in the first month of the year are a heartening sign since employers cut jobs during this period as demand waned due to the end of the holiday shopping season.
Nonetheless, job additions remained robust in March. Healthcare employment increased by 72,000, while 71,000 government jobs were added. Additionally, leisure and hospitality, construction, and retail trade employment increased by 49,000, 39,000 and 18,000, respectively. Meanwhile, 16,000 jobs were added in the "other services" category.
What's more, the jobless rate dropped to 3.8% in March, lower than the 3.9% estimated. The unemployment rate remained below the 4% mark for the last 26 months, the longest stretch since 1960, and indicated robust hiring.
The leading index for jobs growth, the employment trend index of the Conference Board, also increased to 112.84 in March from February's downwardly revised reading of 111.85. The index remained above its pre-pandemic level and new job additions are likely to last in the second quarter as well, per the Conference Board's Associate Economist, Will Baltrus.
Thus, with job prospects firming, astute investors should keep tabs on staffing companies like Korn Ferry, Staffing 360 Solutions, Inc. and DLH Holdings Corp. that can make the most of the healthy employment scenario.
Korn Ferry is the world's leading and largest executive recruitment firm. The Zacks Consensus Estimate for its current-year earnings has increased 6.1% over the past 60 days. KFY's expected earnings growth rate for next year is 13.2%. KFY currently has a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Staffing 360 Solutions is engaged in a global buy-and-build strategy through the acquisition of staffing organizations. The Zacks Consensus Estimate for its current-year earnings has increased 38% over the past 60 days. STAF's expected earnings growth rate for the next quarter is 85.7%. STAF currently, has a Zacks Rank #2 (Buy).
DLH Holdings serves clients throughout the United States as a full-service provider of healthcare, logistics and technical support services to DoD and Federal agencies. The Zacks Consensus Estimate for its current-year earnings has increased 1.9% over the past 90 days. DLHC's expected earnings growth rate for next year is 72.7%. DLHC currently has a Zacks Rank #3 (Hold).
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% 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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Toyota Motor and IPG Photonics have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – April 10, 2024 – Zacks Equity Research shares Toyota Motor Corp. (TM - Free Report) as the Bull of the Day and IPG Photonics (IPGP - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Korn Ferry (KFY - Free Report) , Staffing 360 Solutions, Inc. (STAF - Free Report) and DLH Holdings Corp. (DLHC - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Toyota Motor Corp., a Zacks Rank #1 (Strong Buy), manufactures and sells passenger vehicles, minivans, commercial vehicles, and related parts and accessories. One of the leading global automakers in terms of sales and production, Toyota continues to experience strong demand for its robust lineup of vehicles.
The stock has responded in kind, breaking out to an all-time high in 2024. TM shares are displaying relative strength as buying pressure accumulates in this market leader.
The company is part of the Zacks Automotive – Foreign industry group, which currently ranks in the top 23% 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. This group is widely outperforming the market so far this year.
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
Based out of Japan, Toyota's product portfolio consists of a full range of models. Its automotive business caters to its domestic market as well as markets in North America, Europe, Asia, and the Middle East. The company has several manufacturing facilities across the globe that produce popular vehicle brands including Lexus, Toyota, Scion, Hino, and Daihatsu.
A durable lineup of trucks and sport utility vehicles are set to drive sales volumes. The company's electric vehicle (EV) push also represents a major tailwind. The Japanese auto giant aims to generate 40% of its global sales from EVs by 2025 and 70% by 2030. Toyota plans to invest $37 billion in EVs through the end of this decade.
Furthermore, Toyota provides financial services such as retail financing and leasing, wholesale financing, insurance, and credit cards. The company also operates GAZOO.com, a web portal for automobile information.
Earnings Trends and Future Estimates
Toyota has established an impressive earnings history, beating estimates in each of the last four quarters. Most recently, the company reported fiscal third-quarter earnings of $6.81/share, an 86.07% surprise over the $3.66/share consensus estimate.
Toyota delivered a trailing four-quarter average earnings surprise of 67.6%. Consistently beating earnings estimates is a recipe for success.
Analysts covering TM are in agreement and have been raising their earnings estimates lately. For the current fiscal year, analysts bumped up earnings estimates by 15.7% in the past 60 days. The Zacks Consensus Estimate now stands at $23.06/share, reflecting potential growth of 73.6% relative to the prior year. Revenues are projected to have risen 10% to $302.2 billion.
Let's Get Technical
TM shares advanced more than 75% over the last 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 both the 50-day (blue line) and 200-day (red line) moving averages are sloping up. The stock has been making a series of 52-week highs and recently surpassed its former all-time high. With both strong fundamental and technical indicators, Toyota 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, Toyota has recently witnessed positive revisions. As long as this trend remains intact (and TM continues to deliver earnings beats), the stock will likely continue its bullish run this year.
Bottom Line
Toyota repurchased 28 million shares in its fiscal third quarter and increased its dividend 5 times over the past 5 years. The company's commitment to maximize shareholder value is another compelling reason to consider investing in TM stock.
Backed by a leading industry group and impressive history of earnings beats, it's not difficult to see why Toyota is an appealing investment. An attractive technical trend along with robust fundamentals paint a bullish picture moving forward.
Bear of the Day:
IPG Photonics, a Zacks Rank #5 (Strong Sell) stock, develops and manufactures high-performance fiber lasers, fiber amplifiers, and diode lasers used for diverse applications such as materials processing and medical enhancements. The company also offers integrated laser systems used for fine welding, cutting, drilling, and cladding.
Founded in 1990, Massachusetts-based IPG Photonics markets its products to original equipment manufacturers, system integrators, and end users through its direct sales force, as well as through agreements with independent sales representatives and distributors.
The Zacks Rundown
IPG Photonics has been severely underperforming the market over the past year. The stock experienced a climax top in July of 2023 and has been in a price downtrend ever since. IPGP is hitting a series of lower lows this year and represents a compelling short opportunity as volatility begins to rise.
IPGP is part of the Zacks Lasers Systems and Components industry group, which currently ranks in the bottom 1% out of approximately 250 industries. Because this industry is ranked in the bottom half of all Zacks Ranked Industries, we expect it to underperform the market over the next 3 to 6 months, just as it has so far this year.
Candidates in the bottom half of industry groups can often represent potential short candidates. While individual stocks have the ability to outperform even when included in weak industries, their industry association serves as a headwind for any potential rallies. IPG Photonics is fighting an uphill battle and the stock is confirming this notion as it continues to lag behind.
Recent Earnings and Deteriorating Forecasts
The laser developer has a mixed history in terms of earnings. IPG Photonics most recently reported fiscal first-quarter earnings of $0.89/share, missing the $0.95/share consensus estimate by 6.32%. The company has missed the earnings mark in two of the past five quarters.
Analysts covering IPGP decreased their earnings estimates recently. For the current quarter, estimates have been slashed by 52.48% in the past 60 days. The Zacks Consensus Estimate sits at $0.48/share, reflecting a 61.9% drop from the year-ago period.
Earnings are projected to plummet 30.2% in fiscal 2024, while sales are anticipated to fall 10.6% to $1.15 billion. These are exactly the types of trends that have the bears laser-focused.
Technical Outlook
IPG Photonics has been steadily falling since last year and has now established a well-defined downtrend. Notice how both the 50-day (blue line) and 200-day (red line) moving averages are sloping down. Shares have declined more than 20% in the past year, all while the major U.S. indices soar to new heights.
IPGP stock has also experienced what is known as a "death cross", whereby its 50-day moving average crosses below its 200-day moving average. IPG Photonics 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. Shares remain in negative territory this year while the general market is showing strength.
Final Thoughts
A deteriorating fundamental and technical backdrop show that this stock is not set to laser its way back to new highs anytime soon. The fact that IPGP 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 and falling future earnings estimates will likely serve as a ceiling to any potential rallies, nurturing the stock's downtrend. Potential investors may want to give this stock the cold shoulder, or perhaps include it as part of a short or hedge strategy. Bulls will want to steer clear of IPGP until the situation shows major signs of improvement.
Additional content:
Terrific Jobs Report a Godsend for These 3 Staffing Stocks
The labor market ended the first three months of the year on a solid footing, with jobs being added steadily and the unemployment rate edging lower. Job additions easily topped expectations in March despite higher interest rates, a tell-tale sign that the economy remains insulated from looming recessionary threats.
Nonfarm payrolls increased by 303,000 in March, way higher than analysts' projections of payrolls increasing by 200,000, per the Bureau of Labor Statistics. The jump in new jobs was the most since May 2023. Job creations, by the way, remained above the threshold of 100,000 job additions per month, signifying hiring by employers across all working-age populaces.
Interestingly, job additions in February were lowered to 270,000 from the prior 275,000, while January's job additions were raised to 256,000 from 229,000. However, job additions in the first month of the year are a heartening sign since employers cut jobs during this period as demand waned due to the end of the holiday shopping season.
Nonetheless, job additions remained robust in March. Healthcare employment increased by 72,000, while 71,000 government jobs were added. Additionally, leisure and hospitality, construction, and retail trade employment increased by 49,000, 39,000 and 18,000, respectively. Meanwhile, 16,000 jobs were added in the "other services" category.
What's more, the jobless rate dropped to 3.8% in March, lower than the 3.9% estimated. The unemployment rate remained below the 4% mark for the last 26 months, the longest stretch since 1960, and indicated robust hiring.
The leading index for jobs growth, the employment trend index of the Conference Board, also increased to 112.84 in March from February's downwardly revised reading of 111.85. The index remained above its pre-pandemic level and new job additions are likely to last in the second quarter as well, per the Conference Board's Associate Economist, Will Baltrus.
Thus, with job prospects firming, astute investors should keep tabs on staffing companies like Korn Ferry, Staffing 360 Solutions, Inc. and DLH Holdings Corp. that can make the most of the healthy employment scenario.
Korn Ferry is the world's leading and largest executive recruitment firm. The Zacks Consensus Estimate for its current-year earnings has increased 6.1% over the past 60 days. KFY's expected earnings growth rate for next year is 13.2%. KFY currently has a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Staffing 360 Solutions is engaged in a global buy-and-build strategy through the acquisition of staffing organizations. The Zacks Consensus Estimate for its current-year earnings has increased 38% over the past 60 days. STAF's expected earnings growth rate for the next quarter is 85.7%. STAF currently, has a Zacks Rank #2 (Buy).
DLH Holdings serves clients throughout the United States as a full-service provider of healthcare, logistics and technical support services to DoD and Federal agencies. The Zacks Consensus Estimate for its current-year earnings has increased 1.9% over the past 90 days. DLHC's expected earnings growth rate for next year is 72.7%. DLHC currently has a Zacks Rank #3 (Hold).
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% 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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https://www.zacks.com
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.