For Immediate Release
Chicago, IL – January 23, 2018 – Zacks Equity Research highlights Marriott International Inc. (MAR - Free Report) as the Bull of the Day and Hanesbrands Inc. (HBI - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Netflix (NFLX - Free Report) and Amazon (AMZN - Free Report) .
Here is a synopsis of all four stocks:
Bull of the Day:
One logical result of a strong global economy is that leisure and travel companies will see renewed activity. What’s more, we often see that legacy brands are able to leverage their industry dominance to really cash in on these upticks. These two factors, along with several other key fundamentals, should point investors in the direction of Marriott International Inc. right now.
Marriott is the world's largest hotel company. Its portfolio of brands includes Ritz-Carlton, Marriott Hotels, Renaissance Hotels, SpringHill Suites, Fairfield Inn & Suites, Residence Inn, and many more. Marriott recently completed a deal to purchase Starwood, adding even more infamous hotel chains to its portfolio.
The benefits of this acquisition, along with the aforementioned strength of the global economy and a series of great earnings reports, have left analysts and investors in a daze. Shares are soaring, earnings estimates are on the rise, and the stock is sporting a Zacks Rank #1 (Strong Buy). Let’s take a closer look.
Latest Earnings and Outlook
Marriott most recently reported earnings on Nov. 7. The company posted third-quarter adjusted profits of $1.10, beating the Zacks Consensus Estimate of $0.98 and expanding about 26% from the year-ago period. Adjusted total revenues of $5.66 billion also beat the Zacks Consensus Estimate and were up more than 46% year-over-year.
In the third quarter, Marriott’s revenue per available room (RevPAR) for worldwide comparable system-wide properties increased 2.4%. International comparable system-wide RevPAR rose 6.7%, while RevPAR in North America inched 0.4% higher. Total adjusted expenses decreased 1.6% year over year to $5 billion.
Marriott also adjusted its fourth-quarter earnings per share expectations to $0.98 - $1.00 from the previously announced range of $0.96 - $1.05. Based on our current consensus estimates, we expect the company to post earnings of $1.00 per share, which would represent year-over-year growth of 18%, when it reports next month.
Bear of the Day:
A tough retail environment and new outside competition have left traditional apparel makers in a tight battle for whatever is left of brick-and-mortar clothing sales. Unfortunately, we have seen even some of our most recognizable brands—like Hanesbrands Inc.—struggle to keep up.
Hanesbrands is a leading marketer of innerwear, outerwear, and hosiery apparel under strong consumer brands, including Hanes, Champion, Playtex, Bali, Just My Size, barely there, and Wonderbra. The company designs and sells T-shirts, bras, panties, men's underwear, children's underwear, socks, hosiery, casual wear, and active wear.
In its most recent quarterly earnings report, Hanesbrands management lowered the upper end of its sales and earnings guidance for the remainder of fiscal 2017, leading to a plethora of negative estimate revisions and helping the stock earn its Zacks Rank #5 (Strong Sell).
Latest Earnings and Outlook
Hanesbrands most recently reported earnings on Nov. 1. The company posted adjusted earnings of $0.60 per share, which was in line with the Zacks Consensus Estimate and about 7% higher than the year-ago quarter. Total revenues of $1.8 billion fell short of our consensus estimate and advanced just 2% year-over-year.
Strong international sales helped the company grow its top and bottom line, but Hanesbrands is growing increasingly worried about weak results in North America. Management has blamed soft store traffic and a tough retail landscape, along with the impact of U.S. hurricanes and the bankruptcy of Sears Canada, for this weak domestic performance.
Hanesbrands expects the fourth quarter to be impacted by additional marketing investments, the recently announced buyout of Alternative Apparel, and effects of Sears Canada’s bankruptcy. The company now projects revenues of $6.45 - $6.48 billion, compared with $6.45 - $6.55 billion expected earlier. Earnings are now expected to fall in a range of $1.93 - $1.95 per share, down from the previously announced range of $1.93 - $2.03.
Netflix just released its fourth-quarter 2017 financial results, posting earnings of $0.41 per share and revenues of $3.29 billion. Currently, Netflix is a Zacks Rank #3 (Hold), and is up nearly 8% to $227.79 per share in after-hours trading shortly after its earnings report was released.
Matched earnings estimates. The company posted earnings of $0.41 per share, matching the Zacks Consensus Estimate of $0.41 per share.
Beat revenue estimates. The company saw revenue figures of $3.29 billion, just topping our consensus estimate of $3.28 billion.
The company’s Q4 sales climbed 32.6% year-over-year. On top of that, Netflix’s quarterly earnings jumped from $0.15 per share in the year ago period.
Yet, what has investors so excited is the fact that the streaming powerhouse, which has been able to grow its subscriber base more quickly than anticipated, once again blew away quarterly subscriber estimates. Netflix added 8.3 million new subscribers in Q4, which marked a 15% jump from the year-ago period and also represented the biggest quarter in the company’s history.
Netflix originally predicted it would add a total of 6.3 million new subscribers in the fourth-quarter. The company added 6.36 million new international memberships alone. This massive growth will help the company as it fights for streaming supremacy over the likes of Amazon and Hulu.
Here’s a graph that looks at NFLX’s Price, Consensus and EPS Surprise history:
Netflix, Inc. Price, Consensus and EPS Surprise | Netflix, Inc. Quote
Netflix is the world's leading Internet television network with millions of subscribers in nearly 50 countries who have access to an ever-expanding library of TV shows and movies, including original programming, documentaries and feature films. The company offers the ability to watch as subscribers want, anytime, anywhere, on nearly any Internet-connected screen.
Check back later for our full analysis on NFLX’s earnings report!
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
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.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks Investment Research
800-767-3771 ext. 9339
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 http://www.zacks.com/performancefor information about the performance numbers displayed in this press release.