For Immediate Release

Chicago, IL – May 12, 2026 – Zacks Equity Research shares Western Digital (WDC Quick QuoteWDC - Free Report) as the Bull of the Day and Dream Finders Homes (DFH Quick QuoteDFH - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on The Boeing Company’s (BA Quick QuoteBA - Free Report) , RTX Corp. (RTX Quick QuoteRTX - Free Report) and Lockheed Martin (LMT Quick QuoteLMT - Free Report) .

Here is a synopsis of all five stocks:

Bull of the Day:

Western Digital Corp., a Zacks Rank #1 (Strong Buy), has seen its shares surge over the past year as the company benefits from an accelerating transformation driven by artificial intelligence and explosive demand for storage solutions. The company is a leader in enterprise hard disk drives (HDDs) and nearline storage.

The stock has broken out to an all-time high in 2026 on increasing volume. Shares continue to display relative strength as buying pressure accumulates in this market leader.

Western Digital is part of the Zacks Computer – Storage Devices industry group, which currently ranks in the top 13% out of approximately 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform over the next 3 to 6 months, just as it has over the past year:

Stocks in this industry are relatively undervalued based on traditional valuation metrics. They are also projected to experience above-average earnings growth, which signifies a powerful combination that should lead to higher prices in the future.

Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.

It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.

Company Description

Western Digital manufactures and sells data storage devices and solutions based on HDD technology in the United States, Asia, Europe, the Middle East, and Africa. The company offers internal HDDs, data center drives and platforms, as well as external and portable drives.

In a year where artificial intelligence reshaped the technology landscape, few companies captured the momentum quite like Western Digital. Innovations such as UltraSMR and heat-assisted magnetic recording have enabled the company to ship industry-leading 30TB+ drives tailored for AI data lakes. Strong free cash flow generation and a fortified balance sheet provide additional financial flexibility as the company capitalizes on multi-year hyperscaler buildouts.

The storage specialist, a standout in the Zacks Computer – Storage Devices industry, witnessed its shares surge nearly 300% last year, significantly outperforming both the broader market and its peers. And the industry's tailwinds are just getting started. AI-powered storage markets are exploding—from $30.27 billion in 2025 to a projected $187.61 billion by 2035 at a 20% compounded annual growth rate. Data center operators and hyperscalers continue to expand infrastructure at an unprecedented pace, driving sustained demand for the company’s HDD solutions.

Earnings Trends and Future Estimates

What stands out is Western Digital’s consistent ability to deliver positive earnings surprises; the storage provider has exceeded EPS estimates in each of the past 13 quarters. The company delivered a trailing four-quarter average surprise of over 11%, reflecting strong execution in converting AI-driven demand into results. This track record aligns perfectly with the power of the Zacks Rank system, which prioritizes stocks showing upward earnings revisions.

Western Digital’s transformation has been remarkable. The company reported fiscal third-quarter results back in April that exceeded expectations, with adjusted EPS of $2.72 beating the Zacks Consensus Estimate by nearly 13%. Revenue of $3.34 billion topped forecasts by about 3%. Increasing sales in the cloud end market are being driven by solid demand for higher-capacity nearline products.

The California-based company has been the beneficiary of improving earnings estimate revisions as of late. Looking into the current quarter, analysts have raised their EPS estimates by 28.13% in the past 60 days. The Zacks Consensus Estimate now stands at $3.28 per share, reflecting nearly 98% growth relative to the year-ago quarter.

Let’s Get Technical

Western Digital was the second-best performer in the S&P 500 last year. Only stocks that are in extremely powerful uptrends are able to make this type of price move and widely outperform the market. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.

Notice how shares remain above upward-sloping 50-day (blue line) and 200-day (red line) moving averages. The momentum has clearly carried over in 2026. With both strong fundamentals and technicals, Western Digital stock is poised to continue its outperformance.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Western Digital has recently witnessed positive revisions. As long as this trend remains intact (and WDC continues to deliver earnings beats), the stock will likely continue its bullish run throughout this year.

Bottom Line

Backed by a leading industry group and robust history of earnings beats, it’s not difficult to see why this company is a compelling investment. Currently, WDC carries a Zacks Rank #1 (Strong Buy), driven by favorable estimate momentum.

Solid institutional buying should continue to provide a tailwind for the stock price. Robust fundamentals combined with a strong technical trend certainly justify adding shares to the mix. If you haven’t already done so, be sure to put WDC on your watchlist.

Bear of the Day:

Dream Finders Homes is engaged in the homebuilding business in the United States. The company designs, constructs, and sells single-family homes in some of the country’s hottest markets including Florida, North Carolina, Colorado, Texas, and the Washington D.C. metropolitan area.

The homebuilder also provides insurance agency services including escrow, closing, and title insurance. Founded in 2008, the company markets its homes under various brands including Dream Finders Homes, DF Luxury, Reverie Active Adult Lifestyle, Craft Homes and Coventry Homes.

While Dream Finders Homes delivered rapid growth in the post-pandemic housing boom, the current environment exposes significant vulnerabilities. Recent Q1 2026 results highlight a classic downturn trade-off: aggressive incentives are driving order volume but crushing margins and profitability. Combined with regional risks and rising leverage, the company faces material downside risk.

Elevated mortgage rates and macroeconomic uncertainty are hitting consumer confidence and affordability hard. The Southeast-focused homebuilder has been forced to offer sizeable incentives to boost demand, but this is not sustainable. Builders cannot indefinitely subsidize demand without destroying returns. If the market remains affordability-constrained, future quarters will likely show continued pressure or the need for even deeper incentives, further compressing earnings.

The Zacks Rundown

Dream Finders Homes has been severely underperforming the market over the past year. A Zacks Rank #5 (Strong Sell), the stock experienced a climax top in September of last year and has been in a price downtrend ever since. The stock is hitting a series of 52-week lows and represents a compelling short opportunity.

Shares are part of the Zacks Building Products – Home Builders industry group, which currently ranks in the bottom 7% out of approximately 250 industries. Because this industry is ranked in the bottom half of all Zacks Ranked Industries, we expect it to underperform the market over the next 3 to 6 months, just as it has over the past year:

While individual stocks have the ability to outperform even when included in weak industries, their industry association serves as a headwind for any potential rallies. Stocks in this industry are also expected to post below-average earnings growth. With much better alternatives in the current market environment, this stock should be avoided.

Weak Foundation: Earnings Misses and Deteriorating Forecasts

Earnings misses have been a sore spot for Dream Finders Homes lately. The homebuilder most recently reported Q1 earnings results back in April of 11 cents per share, which represented a 57.8% miss versus the $0.26/share consensus estimate. Revenues of $887.8 million were down from $989.9 million in the year-ago period, driven by a 14% decline in homebuilding revenue.

The company fell short of the earnings mark in three of the past four quarters, posting an average miss of 19.5% versus projections over that timeframe. Consistently missing expectations by a wide margin is a recipe for stock price underperformance.

Analysts have revised full-year earnings estimates downward by 13.59% in the past 60 days. The Zacks Consensus Estimate now stands at $1.59/share, reflecting a 25.7% plunge relative to last year. These are the types of negative trends that the bears like to see.

Technical Outlook

DFH stock has been steadily falling since late last year and has now established a well-defined downtrend. Notice how both the 50-day (blue line) and 200-day (red line) moving averages are sloping down. Shares have declined nearly 15% already this year, and the stock continues to trade below both moving averages.

DFH stock has also experienced what is known as a “death cross,” wherein the stock’s 50-day moving average crosses below its 200-day moving average. Shares would have to make a serious move to the upside and show increasing earnings estimate revisions to warrant taking any long positions in the stock.

Final Thoughts

As a smaller player, DFH lacks the scale, purchasing power, land bank depth, and brand strength of national builders. In a tougher market, larger competitors can more easily absorb cost pressures or use incentives strategically without as much margin damage.

A deteriorating fundamental and technical backdrop show that this stock doesn’t deserve a spot in the household portfolio. The fact that DFH stock is included in one of the worst-performing industry groups adds yet another headwind to a long list of concerns. Falling future earnings estimates will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend.

DFH stock is rated a worst-possible ‘F’ in our Zacks Growth Style Score category, indicating more weakness ahead is likely. Potential investors may want to give this stock the cold shoulder, or perhaps include it as part of a short or hedge strategy.

Additional content:

Boeing Stock Surges +6.9% in a Month: Time to Hold or Book Profits?

The Boeing Company’s shares have risen 6.9% in the past month against the Zacks Aerospace-Defense industry’s decline of 7.5%. The company is seeing growth across its commercial, defense and services businesses, driven by robust aircraft demand, significant contract awards and a solid backlog that underpins sustained revenue growth.

Shares of other defense stocks, such as RTX Corp.  and Lockheed Martin, have declined 12.6% and 18.3%, respectively, during the same time frame. RTX continues to secure strong demand for its combat-proven defense systems from the Pentagon and allied nations, while Lockheed Martin keeps leveraging its broad defense portfolio to win major contracts and strengthen its backlog.

Considering Boeing’s outperformance relative to its industry, investors may be wondering whether now is a good time to add the stock to their portfolios. Let’s examine the factors that have driven the share price gains and assess the company’s investment prospects to make a more informed decision.

Factors Acting in Favor of BA

Boeing remains one of the largest aircraft manufacturers in the United States in terms of revenues, orders and deliveries, particularly in the commercial aerospace industry. Supported by steadily growing demand in the commercial aerospace market, the company, a leading jet manufacturer, has been witnessing strong delivery and order activity.

During the first quarter of 2026, the company booked 140 net commercial airplane orders. Such solid order activities should continue to bolster revenue performance for Boeing’s commercial business over the long run.

Due to its diverse defense product portfolio and established footprint in the space technology industry, Boeing witnesses a solid inflow of contracts. During the first quarter of 2026, the Boeing Defense, Space & Security (“BDS”) unit booked $9 billion in orders, including contracts to continue E-7 Wedgetail development and additional international demand for KC-46 aircraft. This helped the segment maintain a strong backlog of $86 billion as of March 31, 2026. Strong contract wins and a robust backlog position should continue to support the BDS unit’s revenues, which grew 21% year over year in the first quarter of 2026.

The aviation services market, particularly the commercial segment, is set for significant growth in the coming years, fueled by technological advancements, shifting consumer preferences and geopolitical influences. Boeing forecasts a $4.7-trillion market opportunity for commercial aviation support and services in the 20-year period through 2044.

Challenges Confronting BA

Slow production, delayed deliveries and ongoing inspections have likely affected customer sentiment for Boeing’s commercial airplanes, leading to recent order cancellations. Aircraft order cancellations during the three months ended March 31, 2026, totaled $933 million and primarily relate to 737 and 787 aircraft. Ongoing trade tensions between the United States and China pose another challenge. Any escalation in trade disputes could delay these deliveries, hurt Boeing Commercial Airplanes’ revenues and increase inventory costs.

Estimates for BA Stock

The Zacks Consensus Estimate for 2026 earnings per share (EPS) has decreased 120.83% in the past 60 days.

The Zacks Consensus Estimate for RTX’s 2026 EPS has increased 1.47% in the past 60 days. The Zacks Consensus Estimate for Lockheed Martin’s 2026 EPS has increased 0.03% in the past 60 days.

BA’s Earnings Surprise History

The company beat on earnings in two of the trailing four quarters and missed in the other two, delivering an average negative surprise of 77.71%.

BA Stock’s Liquidity

The company’s current ratio is 1.18 compared with the industry’s average of 1.13. The ratio of more than one suggests a healthy liquidity position where the business can meet its immediate financial obligations without selling long-term assets.

BA Stock Trades at a Discount

In terms of valuation, Boeing’s forward 12-month price-to-sales (P/S) is 1.84X, a discount to the industry’s average of 2.48X. This suggests that investors will be paying a lower price than the company's expected sales growth compared with that of its peer group.

What Should an Investor Do Now?

Boeing continues to benefit from strong commercial aircraft demand, with rising jet orders and deliveries supporting long-term growth in its aerospace business. Its defense and space divisions are also seeing solid contract momentum and backlog expansion, while the company expects major long-term growth opportunities in global aviation services.

Considering ongoing trade tensions and its negative earnings growth, new investors should wait and look for a better entry point. Investors who already hold this Zacks Rank #3 (Hold) stock may consider retaining it, given the company’s strong liquidity and price performance. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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