For Immediate Release
Chicago, IL – November 20, 2017 – Zacks Equity Research highlights Garmin Ltd (GRMN - Free Report) as the Bull of the Day and Fabrinet (FN - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Salesfore.com (CRM - Free Report) , Hewlett Packard Enterprise (HPE - Free Report) and Deere & Company (DE - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Wall Street has always welcomed second chances. Once known for its in-car GPS devices, Garmin Ltd has emerged as one of the most exciting “second chances” of the year, and investors are finally starting to reward the company for its shift to wearable technology.
Founded in 1989, Garmin became a household name thanks to its affordable and reliable GPS technology, which was quickly integrated into consumer navigation devices in the early 2000s. On top of that, Garmin has always been a market leader in GPS technology for the aviation, marine, and outdoor industries.
But Garmin's management has also been proactive and forward-thinking. The company's traditional GPS units are less popular in today's smartphone-dominated world, but Garmin has successfully shifted to a wearable tech focus. Now, after another great quarter, GRMN is a Zacks Rank #1 (Strong Buy) and looking like one of the strongest stocks in the consumer gadgets space.
Latest Earnings Report
Earlier this month, Garmin reported third-quarter results of 75 cents per share, beating the Zacks Consensus Estimate of 66 cents. The company notched revenues of $743.1 million, outpacing our consensus estimate by $25 million and expanding 2.9% year-over-year.
Product line expansion and innovation remained a key component of Garmin's performance. In the quarter, the company launched the Descent dive watch, the Impact bat swing sensor, and the TXi series of touchscreen flight displays. Garmin also unveiled several new wearables and partnered with Amazon to launch Garmin Speak, a device that brings full range of Alexa skills inside car.
Gross margin for the quarter was 58.4%, up 215 basis points from the year-ago period. Solid demand drove volume in all segments except Auto, helping to lift segment gross margins on a year-over-year basis.
Bear of the Day:
OEM services company Fabrinet started 2017 strongly, but the stock has toppled since hitting new highs in February and has been unable to garner any positive momentum recently. Now, after a disappointing quarter, it could be time to ditch FN for good.
Fabrinet provides precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers of complex products, such as optical communication components, modules and sub-systems, industrial lasers and sensors.
After sluggish results in its most recent quarter led to slipping earnings estimate revisions, Fabrinet is now sitting at a Zacks Rank #5 (Strong Sell), with shares already down about 20% on the year.
Latest Earnings Results
In its most recent quarter, Fabrinet posted earnings of 75 cents per share, missing our Zacks Consensus Estimate of 80 cents per share. The company also saw revenues of $357 million, which missed our consensus estimate of $359 million.
Management also announced guidance for its upcoming fiscal period. Fabrinet now expects current-quarter earnings to fall in the range of 69 cents to 71 cents per share. Revenue is expected to be in the range of $328 million to $332 million.
In the comparable quarter last year, Fabrinet reported earnings of 91 cents per share and revenues of $351 million, so the company's projections signal some significant retraction.
We have already moved past the traditionally busy stretch of earnings season, but there are still several key reports to look forward to next week. So far, Q3 earnings have been strong across the board, so it will be interesting to see whether these reports will continue that trend and inspire strong trading for the remainder of the calendar year.
With that said, investors 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.
And 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 20.
1. Salesfore.com (CRM - Free Report)
Cloud computing and customer relations giant Salesforce is scheduled to report its latest earnings results after the market closes on November 21. Salesforce has never missed the Zacks Consensus Estimate for earnings, and shares of the company are up over 56% so far this year. Nevertheless, increased competition in the cloud CRM space, as well as expensive international investments, could create new pressures this quarter.
Based on our latest consensus estimates, we expect Salesforce to report earnings of 37 cents per share and revenues of $2.65 billion, which would represent year-over-year growth of 52% and 23%, respectively. Investors will want to focus on the company's international growth, as a series of strategic partnerships and investments have made this segment the company's key growth catalyst.
2. Hewlett Packard Enterprise (HPE - Free Report)
Hewlett Packard Enterprise is slated to release its latest earnings report after the bell on November 21. Things have been relatively up and down for HPE since its split from the former Hewlett-Packard Company in late-2015. Still, the company is coming off a strong earnings beat in the most recent quarter, and a recent spin-off could help improve margins.
According to our latest consensus estimates, HPE is poised to post earnings of 28 cents per share and revenues of $7.71 billion. During the third-quarter of fiscal 2017, the company sold its Software business to British firm Micro Focus, so the most important year-over-year comparison for investors to keep an eye on will be in the net margin category.
3. Deere & Company (DE - Free Report)
Agricultural equipment behemoth Deere & Company is scheduled to report its latest earnings results before the market opens on November 22. Deere has met or surpassed the Zacks Consensus Estimate for earnings in 13 consecutive quarters, and the company's stock has gained more than 30% this year.
Based on our current consensus estimates, we expect DE to report earnings $1.42 per share and revenues of $6.91 billion, which would represent year-over-year growth of 58% and 22%, respectively. Typically, Deere & Company earnings reports serve as an important bellwether for the agricultural industry, and investors will anticipate more news on the company's pending acquisition of Wirtgen.
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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.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
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