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SharkNinja and Schneider National have been highlighted as Zacks Bull and Bear of the Day

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For Immediate Release

Chicago, IL – May 21, 2024 – Zacks Equity Research shares SharkNinja, Inc. (SN - Free Report) , as the Bull of the Day and Schneider National, Inc. (SNDR - Free Report) , asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Coterra Energy (CTRA - Free Report) , Cheniere Energy (LNG - Free Report) and Chesapeake Energy (CHK - Free Report) . Here is a synopsis of all five stocks:

Bull of the Day:

SharkNinja, Inc. has been red-hot since being listed on the NYSE in August 2023. This Zacks Rank #1 (Strong Buy) is expected to grow sales and earnings by the double digits in 2024.

SharkNinja is a global product design and technology company. It operates two brands, Shark and Ninja. It has a history of bringing small home appliances to the market. You know its products and probably use them.

SharkNinja Has 4500+ patents and operates 5 innovation centers. Headquartered in Needham, Massachusetts, products are sold at key retailers, both online and off, and through distributors worldwide.

Third Beat in a Row in the First Quarter of 2024

On May 9, 2024, SharkNinja reported its first quarter 2024 results and beat the Zacks Consensus by $0.11. Earnings were $1.06 versus the Zacks Consensus of $0.95.

SharkNinja only went public in August 2023 after it was spun-off from Hong Kong's JS Global Lifestyle. It still has connections to China.

In its guidance, it said it would have capital expenditures of $160 million to $180 million to support investments in new product launches, technology and investments in tooling to support the diversification of its sourcing outside of China.

It has only had three earnings reports in its young life. But it has now beat on earnings every quarter as a stand-alone company.

Net sales jumped 24.7% to $1.066 billion compared to $855.3 million from a year ago. It saw growth in each of its 4 categories.

Cleaning Appliances net sales rose 1.7% to $421.9 million, driven by the extractor and robotics sub-categories.

Cooking and Beverage appliances net sales jumped 28.4% to $329.6 million from $256.7 million last year boosted by growth in Europe, specifically in the United Kingdom. Growth was also supported by success of the outdoor grill and outdoor oven in both the US and European markets.

Food Preparation Appliances saw net sales grow 74% to $205 million, compared to $117.8 million a year ago. It was driven by strong sales of ice cream makers and compact blenders, specifically the portable blenders.

SharkNinja also has an "Other" category which rose 66.4% to $109.6 million, up from $65.9 million a year ago, primarily driven by continued strength of hair care products in the beauty category such as the Shark FlexStyle Air Style & Drying System which is a competitor to the Dyson, and the successful launch of the new FlexBreeze fans.

Adjusted gross margin rose to 50.8% from 48.7%. It continues to see supply chain tailwinds.

SharkNinja Raised Its Full Year Outlook

After a strong first quarter, the company has gotten more bullish for the rest of the year.

Adjusted net sales are expected to rise 12% to 14% year-over-year while earnings are now expected in the range of $3.66 and $3.82.

For earnings, that would be growth between 14% and 19%.

It's not surprising, given the bullishness, that the analysts are also bullish. 4 estimates have been raised since the report, which has pushed the Zacks Consensus up to $3.82 from $3.54. This is at the high end of the company's range.

That's earnings growth of 18.6% as SharkNinja made $3.22 last year.

Analysts are also bullish about 2025, with 4 estimates higher since the report as well. The Zacks Consensus has jumped to $4.27 from $3.92 which is another earnings growth of 11.9%.

Shares Soar in 2024

SharkNinja was a hot stock out of the gate when it went public last summer. Shares have been hitting all-time highs throughout 2024 and are now up 90.5% since it went public while the S&P 500 is up just 15.9% .

Valuations aren't stretched. It trades with a forward P/E of 19.5, which is still attractive for a growth stock. Because earnings are moving higher, it has an attractive PEG ratio of just 1.4.

For investors who are fans of its products, and who are looking for a consumer products company, SharkNinja should be on your short list.

Bear of the Day:

Schneider National, Inc. is seeing a light at the end of the tunnel as the freight recession marches on. However, this Zacks Rank #5 (Strong Sell) still recently cut full year guidance.

Schneider is a multimodal provider of transportation, intermodal and logistics services. In business for 89 years, it has one of the broadest portfolios in the industry.

Schneider’s solutions include Regional and Long-Haul Truckload, Expedited, Dedicated, Bulk, Intermodal, Brokerage, Warehousing, Supply Chain Management, Port Logistics and Logistics Consulting.

Third Miss in a Row in Q1 2024

On May 2, 2024, Schneider National reported its first quarter 2024 results and missed on the Zacks Consensus for the third quarter in a row.
Earnings were $0.11 versus the consensus of $0.13.

Operating revenues fell 8% to $1.3 from $1.4 billion last year.

Truckload revenues, excluding fuel surcharges, increased $1.1 million to $538.1 million compared to the same quarter in 2023.

Intermodal revenues, excluding fuel surcharges, fell 7%, or $18.9 million, to $247.2 million year-over-year. First quarter 2024 volumes were flat compared to the same period a year ago.

Logistics revenues, excluding fuel surcharges, fell 15%, or $57.3 million, to $324.9 million due to decreased revenue per order and 8% lower brokerage volume compared with the year ago quarter. Much of that was due to muted freight conditions.

Schneider Cuts Full Year Earnings Guidance

It's not all doom and gloom. The industry conditions have been tough in trucking. But Schneider is seeing a light at the end of the tunnel.

"We still believe the cycle is closer to its end than its beginning and anticipate improving conditions as the year progresses; however, we have tempered our outlook on the timing of the recovery," said Darrell Campbell, Vice President and CFO.

Schneider cut its full year earnings guidance to a range of $0.85 to $1.00 from its prior guidance of $1.15 to $1.30.

The analysts also have been cutting their estimates. 2 have cut in the last week, which has pushed the Zacks Consensus down to $0.92 from $1.13 just 30 days earlier.

That is an earnings decline of 33% as Schneider made $1.37 last year.

Analysts are also seeing the light at the end of the tunnel, as they expect 2025 earnings to jump 79.8% to $1.65.

Shares Fall in 2024

Not surprisingly, given the guidance cut and the ongoing freight recession, the shares have been weak in 2024, falling 12.3%.

But they're not yet back to the 5 year lows, which was in 2020 when the Covid pandemic hit.

With the earnings being cut, it's not especially cheap, with a forward P/E of 24.

It is, however, shareholder friendly even though the company's free cash flow decreased $76.5 million in the quarter compared with a year ago.

In Feb 2023, Schneider announced a $150 million stock repurchase program. As of Mar 31, 2024, the company had repurchased 3.1 million Class B shares for a total of $79.2 million.

It also pays a dividend, which is currently yielding 1.7%. As of Mar 31, 2024, Schneider had returned $16.5 million in the form of dividends to shareholders year to date.

The company said in the first quarter press release that the freight recession has lasted longer than it originally anticipated.

But hopefully, it is nearing an end soon. Investors might want to wait on the sidelines for signs that it is, indeed, over.

Additional content:

Why Did U.S. Natural Gas Prices Move Up +16.6% Last Week?

The U.S. Energy Department's weekly inventory release showed that natural gas supplies increased less than expected. The positive inventory numbers, together with signs of production pullback and upcoming summer demand, buoyed natural gas futures, which settled with a healthy gain week over week.

Despite this spike, which saw natural gas hit its highest since January, the space remains highly susceptible to unpredictable weather patterns, impacting prices and market stability.

At this time, we advise investors to focus on stocks like Coterra Energy and Cheniere Energy.

EIA Reports a Build Smaller Than Market Expectations

Stockpiles held in underground storage in the lower 48 states rose 70 billion cubic feet (Bcf) for the week ended May 10, below the guidance of a 76 Bcf addition, per a survey conducted by S&P Global Commodity Insights. The increase compared with the five-year (2019-2023) average net injection of 90 Bcf and last year’s growth of 93 Bcf for the reported week.

The latest increase puts total natural gas stocks at 2,633 Bcf, which is 421 Bcf (19%) above the 2023 level and 620 Bcf (30.8%) higher than the five-year average.

The total supply of natural gas averaged 104.5 Bcf per day, up 0.2 Bcf per day on a weekly basis due to higher dry production, partly offset by lower shipments from Canada.

Meanwhile, daily consumption fell to 94.5 Bcf from 95.5 Bcf in the previous week, mainly reflecting a drop in natural gas consumed for power generation.

Natural Gas Prices Finish Sharply Higher

Natural gas prices trended northward last week following the lower-than-expected inventory build. Futures for June delivery ended Friday at $2.49 on the New York Mercantile Exchange, up some 16.6% from the previous week’s closing. As a matter of fact, the commodity’s resurgence over the past few weeks wiped out all of its losses since the start of this year.

Investors should know that natural gas realization has been under pressure from strong production, elevated stockpiles and tepid weather-related demand. It's worth mentioning that the current inventory levels are well above the year-ago figure and the five-year average. The bearish sentiment surrounding the commodity even prompted shale producers Chesapeake Energy and others to hit the brakes on new drilling.

Chesapeake announced a reduction in its drilling rigs so as to lower volume, with the Appalachian Basin-focused EQT following on. CHK has decided to curb the second quarter’s gas production expectations by 400 million cubic feet per day (MMcf/d), doubling the previous curtailment announced in March. It appears that these production cut announcements have been partly responsible for driving natural gas prices higher and galvanizing the market.

As is the norm with natural gas, changes in temperature and weather can lead to price swings. With low heating demand this winter, usage of the commodity to generate electricity took a hit. However, predictions of warmer-than-normal weather over most of the United States should boost demand.

Moreover, there are signs of curtailment in U.S. production. According to energy services provider Baker Hughes, the U.S. natural gas rig count — a pointer to where production is headed — is down around 27% from last year. Industry observers believe this could set the stage for a pullback in near-term drilling and supplies.

Meanwhile, a stable demand catalyst in the form of continued strong LNG feedgas deliveries, is supporting natural gas. As a matter of fact, LNG shipments for export from the United States have been elevated of late, due to environmental reasons and Europe’s endeavor to move away from its dependence on Russian natural gas supplies due to the war in Ukraine.

At the same time, the increase in gas flows due to the full restart of the Freeport LNG export plant in Texas has translated into more of the commodity being loaded onto ships. A heatwave blanketing Southeast Asia has also led to a jump in power demand for air conditioning, increasing exports of the super-chilled fuel.

Final Thoughts

The upshot of all these factors — the natural gas market — despite improving, remains an oversupplied one. As mentioned above, it endured a torrid year in 2023, briefly breaking below the $2 threshold for the first time since 2020. The situation was not much different in the early parts of 2024, with the fuel reaching a multi-year low near $1.48 in late March and struggling to sustain a rally over the psychological mark of $2. However, natural gas has staged quite the turnaround in a matter of weeks, and looks to improve even further given the favorable temperature outlook.

Nevertheless, based on several factors, the space is currently quite unpredictable and spooked by sudden changes in weather and production patterns. As such, investors are advised to still exercise caution and preferably hold on to fundamentally strong stocks like Coterra Energy and Cheniere Energy.

Coterra Energy: It is an independent upstream operator primarily engaged in the exploration, development and production of natural gas. Headquartered in Houston, TX, the firm owns some 183,000 net acres in the gas-producing Marcellus Shale of the Appalachian Basin. This Zacks Rank #3 (Hold) company churned out an average of 2,262.7 million cubic feet on a daily basis from these assets in 2023.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Coterra beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed in the other, the average being 9.8%. Valued at around $21 billion, CTRA has risen 8.9% in a year.

Cheniere Energy: Being the first company to receive regulatory approval to export LNG from its 2.6 billion cubic feet per day Sabine Pass terminal, Cheniere Energy enjoys a distinct competitive advantage.

Cheniere Energy beat the Zacks Consensus Estimate for earnings in two of the last four quarters and missed in the other two. This #3 Ranked natural gas exporter has a trailing four-quarter earnings surprise of roughly 58.9%, on average. LNG shares have moved up 11.3% in a year.

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