For Immediate Release
Chicago, IL – Nov 13, 2017 – Zacks Equity Research highlights Twin Disc, Inc. (TWIN - Free Report) as the Bull of the Day and Impinji Inc. (PI - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the JD.com, Inc. (JD - Free Report) , Home Depot, Inc. (HD - Free Report) and Walmart Stores, Inc. (WMT - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Twin Disc, Inc., a Zacks Rank #1 (Strong Buy) designs, manufactures and sells heavy duty off-highway power transmission equipment. Products offered include: hydraulic torque converters; power-shift transmissions; marine transmissions and surface drives; universal joints; gas turbine starting drives; power take-offs and reduction gears; industrial clutches; fluid couplings and control systems. Principal markets are: construction equipment, industrial equipment, government, marine, energy and natural resources and agriculture.
In the company’s most recent earnings report, TWIN crushed the Zacks consensus earnings estimate ($0.29 vs the estimate of $0.00), but came in just short of the revenue estimate ($45 million vs. the estimate of $46 million). The company saw year over year sales increase by +25.8%, due to growth in the North American oil and gas, and aftermarket components. The company also saw gross margins improve by 520 basis points to 30.8% for the quarter.
Drivers Going Forward
The big driver behind the estimate upgrades (as you can see below in the increasing estimates section) is their huge improvement in backlogs. TWIN’s six-month backlog currently stands at $62.7 million; this is a +35% improvement sequentially, and a +89% increase on a year over year basis. This massive increase in their backlogs was attributed to the recovering oil and gas markets in North America, and a now consistent level of industrial demand.
According to John H. Batten, President and CEO, “Positive momentum from new and existing North American pressure pumping customers accelerated in the fiscal 2018 first quarter, helping drive significant year-over-year improvements in sales, profitability, and backlog. We expect favorable trends within our oil and gas market to continue throughout this fiscal year as producers adjust to stable oil and gas prices, and North American servicing companies invest in rebuilding and expanding their pressure pumping fleets. Throughout the recent oil and gas downturn, our strategy was focused on emerging as a stronger, more profitable, and better positioned company.
“We proactively adjusted our cost structure, while investing in our power control technologies and our global support and service platform. These initiatives are beginning to pay off by enhancing profitability and expanding our market share. As the year progresses, we will remain committed to programs that increase operating efficiency by further reducing costs, investing in new production capabilities, and improving the effectiveness of our supply chain.”
Bear of the Day:
Impinji Inc., a Zacks Rank #5 (Strong Sell), is a provider of referral and information network radio frequency identification solutions to the retail, pharmaceutical, healthcare, food and beverage and other industries. The company's products include Indy Reader Chips which consists of integrated radio chips and supporting SDKs; Monza Tag Chips, which deliver memory options and extended features to RFID tags and Speedway fixed RFID readers and antennas for RFID-based information. Impinj, Inc. is based in Seattle, Washington.
The company reported Q3 17 earnings on November 1, where they missed the Zacks consensus earnings estimate but came in line with the revenue estimate. To compound the earnings misses, management guided Q4 below the consensus estimates due to supply shortages for readers and gateway products. Further impacting the top line, the company’s pricing power fell below that of their preceding quarters. Lastly, lower total volumes are also negatively weighing on the company. But management expects these issues to turn around sometime in the second half of 2018.
According to Chris Diorio, Impinj, co-founder and CEO, “We delivered a solid third quarter with strong reader and gateway volume growth. Our 2017 endpoint IC unit guidance remains unchanged at between 7.0 and 7.2 billion units. We see indicators of growing adoption for RAIN, and the Impinj platform, however, we expect to see a slight decrease in endpoint IC volumes in the second half of the year. We remain confident in our market opportunity and will continue investing in and delivering solutions and enterprise partnerships that leverage our platform, accelerate adoption and drive scale in this gigantic market opportunity.”
Upcoming Earnings Reports to Watch: JD, HD & WMT
It’s been a relatively strong earnings season throughout Wall Street, and in nearly every sector, investors are celebrating strong growth and positive surprises. Of course, Q3 reporting season is not quite over, so investors will want to stay tuned in as a few more marquee companies announce their latest results soon.
So far this earnings season, about 73% of S&P 500 companies have surpassed earnings estimates, while 67% have beaten revenue estimates. And in the upcoming week, a few mega-cap companies will also attempt to impress investors.
As we approach one of the final busy weeks of Q3 earnings season, investors should remember that they can always use the Zacks Earnings Calendar to plan out their schedules for earnings, dividend announcements, and other important financial releases.
This handy tool is your perfect one-stop-shop to properly prepare for the market events that will have an impact on your own portfolio.
Today, we’ve made that task even easier for you. Using the Earnings Calendar, we looked ahead to next week and selected the biggest reports to watch. Make sure to keep an eye on these companies as they prepare to report during the week of November 13.
1. JD.com, Inc.
Chinese e-commerce powerhouse JD.com will report its latest quarterly results before the market opens on November 13. JD has emerged as one of 2017’s hottest foreign tech stocks, and headed into the report, shares of the online marketplace are up more than 56% on the year.
JD is currently sporting a Zacks Rank #3 (Hold). Based on our latest consensus estimates, we expect to see the company post earnings of 10 cents per share and revenues of $12.25 billion, which would represent year-over-year growth rates of 244% and 35%, respectively. JD has met or surpassed earnings estimates in five consecutive quarters.
2. Home Depot, Inc.
Home improvement retail giant Home Depot is scheduled to release its latest earnings report before the bell on November 14. Although brick-and-mortar retail has struggled recently, Home Depot tends to find success whenever the overall economy and housing market is strong. With that said, shares of the company are up over 21% this year.
Heading into its report, Home Depot is sporting a Zacks Rank #2 (Buy). According to our most up-to-date consensus estimates, Home Depot is expected to report earnings of $1.81 per share and revenues of $24.47 billion. These results would represent year-over-year growth of 13% and 6%, respectively. What’s more, this report should act as a key bellwether for the domestic economy.
3. Walmart Stores, Inc.
Big-box retail behemoth Walmart is set to announce its financial results before the market open on November 16. Thanks to several key acquisitions and investments, Walmart’s e-commerce business is gaining serious momentum and should be the focal point of its report. Of course, investors will also want to focus on key details like comparable-store sales figures.
Ahead of its report date, Walmart is a Zacks Rank #3 (Hold). Our latest consensus estimates are calling for earnings of 97 cents per share and revenues of $121.02 billion, which would mark a slight bottom-line slump but a top-line expansion of 2.40%. Walmart has met or surpassed earnings estimates in eight straight quarters, and shares have gained about 30% in 2017.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
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About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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