For Immediate Release

Chicago, IL – April 6, 2026 – Zacks Equity Research shares Imperial Oil Limited (IMO Quick QuoteIMO - Free Report) as the Bull of the Day and KB Home (KBH Quick QuoteKBH - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on BP plc (BP Quick QuoteBP - Free Report) , Equinox Gold (EQX Quick QuoteEQX - Free Report) and Textron (TXT Quick QuoteTXT - Free Report) .

Here is a synopsis of all five stocks:

Bull of the Day:

Imperial Oil Limited is a Canadian integrated oil company which is expected to see stronger earnings growth this year as oil prices rise due to the conflict in the Middle East. This Zacks Rank #1 (Strong Buy) has busted out to 5-year highs.

Imperial Oil is a Canadian integrated energy company headquartered in Calgary. It explores and produces oil and natural gas in the Canadian Oil Sands and transports it to its refineries, where it is made into a variety of products such as fuel, asphalt, motor oil, waxes and various chemicals and gases.

It's Canada's largest oil refiner.

Imperial Oil Beat Again in the Fourth Quarter of 2025

On Jan 30, 2026, Imperial Oil reported its fourth quarter 2025 results and beat on the Zacks Consensus Estimate by $0.05. Earnings were $1.41 versus the Consensus of $1.36.

It has a great earnings surprise track record. This was the fifteenth consecutive earnings beat. It's last miss was in early 2022.

Integrated oil companies are dependent on the price of crude as well as refining margins.

In the fourth quarter, the price of crude oil fell relative to the third quarter of 2025 due to global supply outpacing demand. Inventory had built across the global energy complex, depressing pricing.

Additionally, the Canadian WTI/WCS spread widened as seasonal weakening in heavy crude demand coincided with an increase in WCS supply.

Industry refining margins did improve in the fourth quarter of 2025, however, impacted by geopolitical factors and supply disruptions.

The War Changed Everything

But in Feb 2026, the world's energy market abruptly changed upon the breakout of the Middle East conflict. The Strait of Hormuz was mostly shut to shipping traffic, including crude, jet fuel and other refined products, and has remained shut into April.

Up to 10 million barrels of oil a day were removed from the oil market, which led to a decline in the excess inventory worldwide.

Oil prices have soared with both WTI and Brent oil trading above $100 a barrel. Prices for refined products have also been soaring, with gasoline, diesel and jet fuel jumping higher.

Imperial Oil is facing a completely different reality now. It will report first quarter 2026 earnings on May 1, 2026.

Analysts Try to Keep Up with Soaring Oil Prices

The Strait of Hormuz has been mostly shut to shipping for five weeks. It looks like the Iran War will not be over quickly. That means higher oil prices for longer.

The analysts are finally starting to price in the higher energy prices.

One earnings estimate was revised higher for 2026 in just the last week. It has pushed the Zacks Consensus up sharply to $6.48 from $5.20.

That is now earnings growth of 6.2% as Imperial Oil made $6.10 last year.

Here's what the dramatic turnaround in oil prices looks like in the earnings in the 5-year price and consensus chart.

Shares of Imperial Oil Jump to 5-Year Highs

Shares of Imperial Oil broke out of its old trending line even before the Iran War, around the start of 2026.

But the shares got another leg up in late February and March. They're now at 5-year highs.

Imperial Oil trades with a forward price-to-earnings (P/E) ratio of 19.9 but with earnings being revised higher, look for that to drop.

The company is shareholder friendly. It has paid dividends every year for over a century and has increased its annual dividend payment for 31 consecutive years.

In Jan 2026, Imperial Oil announced a 20% increase to the quarterly dividend to $0.87 from $0.72 Canadian. In US dollars, that's $2.55 annually, which is yielding 2%.

If you are looking for an integrated energy play, with both production and refining, which does not have any operations in the Middle East, Imperial Oil should be on your short list.

Bear of the Day:

KB Home continues to face challenging market conditions in the housing market. This Zacks Rank #5 (Strong Sell) is expected to see another year of declining earnings.

KB Home is one of the largest homebuilders in the United States. It operates in 49 markets and has built nearly 700,000 homes over the last 65 years.

KB Home Meets in the Fiscal First Quarter 2026 But Guidance Disappoints

On Mar 24, 2026, KB Home reported its fiscal first quarter 2026 results and met on the Zacks Consensus Estimate of $0.52.

This quarter reflects the start of the spring home buying season, which officially kicks off the week after the Super Bowl.

Revenue fell 23% to $1.08 billion and homes delivered declined 14% to 2,370.

The adjusted gross profit margin was 15.5%, compared with 20.3% in the year ago quarter, primarily reflecting price reductions, higher relative land costs, product and geographic mix, and reduced operating leverage.

Gross profit margin is a key fundamental for home builders. A reading under 20 usually indicates a bear market.

The average selling price fell to $452,100 from $500,700 a year ago.

KB Home saw solid traffic to its communities during the quarter, with year-over-year net order growth.

It's also achieving its targeted mix of Built to Order net orders, which are higher margins than spec homes. This is expected to contribute to stronger financial results in the second half of the fiscal year.

"Concerns surrounding the conflict in the Middle East have introduced an additional layer of uncertainty for consumers who were already working through numerous challenges," said Jeffrey Mezger, Executive Chairman.

Analysts Cut KB Home Fiscal 2026 and 2027 Earnings Estimates

2026 was supposed to be the year of the housing market turnaround, but that seems unlikely now.

KB Home guided a gross profit margin in the range of 15% to 15.6%, assuming no inventory-related charges, for the fiscal second quarter of 2026.

6 estimates were cut in the last 30 days, pushing the fiscal 2026 Zacks Consensus Estimate down to $3.55 from $4.16. That's a decline in earnings of 45.6% as the company made $6.52 last year.

6 estimates were also cut for fiscal 2027 over the prior month as well, pushing the Zacks Consensus down to $4.76 from $5.61. That's earnings growth of 33.9%, however. But it's going in the wrong direction.

Shares of KB Home Sink in the Last Six Months

With housing not seeing a turnaround during the spring buying season, it's not surprising that the shares of KB Home have been weak over the last 6 months.

Here is KB Home compared to the S&P 500 ETF (VOO).

KB Home is attractively priced with a forward price-to-earnings (P/E) of 14.3. A P/E under 15 is usually considered a value.

However, it also has the characteristics of a "trap" with the earnings expected to fall 45.6% this year.

KB Home is shareholder friendly. It pays a dividend currently yielding 2%.

But until the buyers return to the housing market, a homebuilder company like KB Home could be a tough place to park some money. Investors should watch the earnings estimates for a turn.

Housing has been in a recession for several years. At some point, it will come out of it.

Additional content:

Iran-War-Led Market Volatility: Top 3 Sectors & Stocks for 2026

The ongoing Iran conflict has injected extreme volatility into global financial markets, with equities, commodities and currencies becoming reactive to every geopolitical update. Markets rallied briefly on cease-fire speculation and falling oil prices, but renewed military escalation quickly reversed the trend, pushing crude oil higher again and sending risk assets into another volatile cycle. Brent crude recently jumped above $107 per barrel after renewed military threats, highlighting how sensitive markets remain to geopolitical developments.

Oil Shock, Inflation Fears and Equity Market Reaction

Markets are now pricing in additional interest rate hikes due to energy-driven inflation risks, which directly put pressure on equity valuations, particularly growth stocks. Futures tracking U.S. equities fell around 1%, while all three major indices moved lower as hopes of a near-term resolution to the Middle East conflict faded and oil prices surged back. The S&P 500 and Nasdaq Composite declined as yields moved higher, while the Dow Jones Industrial Average edged lower, reflecting broad-based risk aversion.

Sector Rotation Emerging as Key Investment Theme in Equity Market

Importantly, the current market reaction is consistent with historical patterns. Geopolitical conflicts usually do not cause long-term market declines, but they often lead to sector rotation. In the current environment, commodities have been relatively strong, while oil-sensitive industries and high-growth technology stocks remain under pressure.

At the sector level, energy and defensive utilities have outperformed, supported by higher oil prices and risk-averse investor positioning, while technology and communication services have lagged the broader market. This suggests that investors are shifting capital away from growth stocks toward defensive sectors and inflation hedges.

Against this backdrop, diversification across sectors and asset classes has become increasingly important, as markets continue to navigate inflation risks, changing interest rate expectations, AI-driven disruption and ongoing geopolitical uncertainty.

Below are three sectors and select stocks that are expected to benefit through the rest of 2026.

Energy Sector

The energy sector is the direct beneficiary of the Middle East conflict and oil supply disruption risks. Higher crude prices typically translate into stronger revenues, margins and free cash flow for oil producers and oilfield services companies. Energy companies also tend to increase dividends and share buybacks during high oil price cycles, which attracts institutional investors during volatile markets. Since February, stocks in this sector have gained 21.7% in aggregate.

BP plc currently presents a strong investment case driven by its focus on generating higher shareholder value through cost reductions and upstream growth. BP has announced several new upstream growth projects that are scheduled to start in 2026 and 2027. In 2026, this Zacks Rank #2 (Buy) stock is expected to report earnings growth of 22.6% on revenue growth of 28.2%.

Commodities and Precious Metals

Commodities, especially gold and industrial metals, tend to perform well during inflation, geopolitical uncertainty and currency volatility. Gold is considered a safe-haven asset, while industrial metals benefit from supply disruptions and infrastructure or defense-related demand.

A company with solid growth prospects in this niche is Equinox Gold with a Zacks Rank #2. This mining company is focused on the acquisition, exploration, development and operation of mineral properties across the Americas. The company primarily produces gold and also explores silver deposits. It was previously known as Trek Mining before rebranding. In 2026, this company is expected to report earnings growth of 270% on revenue growth of 42%.

Defense and Aerospace Sector

Geopolitical conflicts usually lead to increased military spending, weapons procurement and defense technology investments. Defense companies benefit from long-term government contracts, making their revenues more stable even during economic uncertainty.

Textron in this field is a strong pick at this moment with its Zacks Rank #2. Textron's Aviation business unit is benefiting from improving commercial air passenger traffic. Textron has also been witnessing strong order activity. The company also enjoys solid demand for its defense products. In 2026, this stock is expected to report earnings growth of 7.4% on revenue growth of 4.7%.

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

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