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Manpower Group, Papa John???s and Adobe Systems as Zacks Bull and Bear of the Day

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For Immediate Release         

Chicago, IL – March 21, 2018 – Zacks Equity Research highlights Manpower Group (MAN - Free Report) as the Bull of the Day and Papa John’s (PZZA - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onAdobe Systems (ADBE - Free Report) .

Here is a synopsis of all three stocks:

Bull of the Day:                                              

Last week marked the ninth anniversary of the “generational bottom,” and all throughout the world, markets are celebrating a prolonged stretch of relative health and recovery. In the U.S., that recovery is best exemplified by the strength of the jobs market, and investors can benefit from this strength by targeting companies like Manpower Group, a global staffing powerhouse.

Manpower is a world leader in innovative workforce solutions, serving both large and small organizations across all industries and sectors. The company is the third-largest staffing firm in the world. Manpower employs millions of people every year, throughout dozens of countries.

The company’s latest earnings report was strong, but its stock failed to generate momentum thanks to a market-wide selloff. Now MAN sits at an attractive level for value investors, and an even better earnings outlook—lifted by improved analyst sentiment—makes this Zacks Rank #1 (Strong Buy) a great option right now.

Latest Earnings Report

Manpower most recently reported earnings on Feb. 2. Adjusted profits for the quarter were $2.12 per share, surpassing the Zacks Consensus Estimate of $2.05. Quarterly revenues came in at $5.64 billion, up from $4.96 billion in the prior-year period and ahead of our $5.55 billion consensus estimate.

Meanwhile, operating profit for the reported quarter was $238.7 million compared with $212 million in the year-ago quarter. The increase in operating profit, despite rise in operating expenses, is due to significant top-line growth.

Manpower exited 2017 with cash and cash equivalents of $689 million compared with $598.5 million in the previous year. Long-term debt was $478.1 million compared with $785.6 million in 2016. The company also provided strong guidance in its latest report.

Bear of the Day:

Shifting consumer habits and a plethora of new delivery options have left the restaurant industry in flux, with traditional delivery powerhouses like some fast-food pizza chains struggling to compete. One such company is Papa John’s.

Papa John’s operates & franchises pizza delivery and carry-out restaurants. The company is the world’s third-largest pizza delivery brand. Papa John’s has about 5,199 restaurants, including 743 company-owned and 4,456 franchised restaurants in 50 states, and 44 countries and territories.

After another lackluster earnings report, analysts have soured on PZZA. The company has witnessed a number of negative earnings estimate revisions, earning the stock a Zacks Rank #5 (Strong Sell). Additional headwinds should continue to cause volatility, making this restaurant pick one to stay away from for now.

Latest Earnings Report

In the most recent quarter, Papa John’s reported adjusted earnings of $0.65 per share, missing the Zacks Consensus Estimate of $0.68 and declining about 6% from the year-ago period. Domestic company-owned comps fell 4.7% during the quarter, while comps at North American franchise restaurants slumped 3.5%.

Papa John’s was plagued by higher costs related to marketing initiatives, unit expansion, digital ordering, and increased use of online and mobile web technology. In the fourth quarter, total costs and expenses amounted to $429.3 million, up 7.8% from the prior-year quarter. Meanwhile, operating margin decreased 390 basis points to reach 7.8%.

Additional content:

Why Adobe (ADBE - Free Report) Stock Keeps Climbing

Shares of Adobe Systems jumped nearly 4% through early afternoon trading Tuesday to hit yet another new all-time high as investors continue to ride the software firm’s post-Q1 earnings wave.

Latest Results

Adobe, which makes editing programs such as Photoshop and Premiere, posted record first quarter revenues of $2.08 billion last week. This figure also marked 24% growth from the year-ago period. Furthermore, Adobe’s adjusted earnings of $1.55 per share topped our Zacks Consensus Estimate.

The company did not provide updated guidance for the rest of the year, but it previously announced that it expects to post full-year revenues of $8.73 billion. Adobe also noted that it expects the new Republican tax law will have a positive impact on its business.

“The new Tax Act is lowering Adobe’s effective tax rates, driving a significant increase in our earnings per share targets," CFO Mark Garrett said in a statement. “With ready access to our offshore cash, we will continue to evaluate investment opportunities to grow our business and we are actively expanding our campuses in the Bay Area and Utah to accommodate the growth of our employee base.”

Looking Ahead

It seems clear that Adobe’s most-recent quarter pleased investors, but this positivity won’t last forever unless there are growth metrics that support the company’s new price tag. Based on a quick look at the latest top and bottom line projections, Adobe does indeed look ready to continue its expansion.

Adobe’s Q2 revenues are projected to surge 21.3% to reach $2.15 billion, while the firm’s full-year sales are expected to climb at a similar rate to hit $8.78 billion. It also looks like Adobe’s new lower effective tax rate is in fact set to boost earnings right away.

The company is projected to see its quarterly earnings skyrocket 50%, while its fiscal 2018 EPS figure is expected soar by 45.9% to reach 6.29 per share.

Adobe has also recently earned a large number of estimate revisions for its current quarter, next quarter, and the current year, with 100% agreement to the upside. Investors should note that Adobe has matched or topped earnings estimates for 14 straight quarters, including a 9% average surprise in the trailing four periods.

This stretch of beats mostly likely means that Adobe does everything in its power to post the best earnings to please its shareholders. Looking ahead, the company might have an even easier time doing so if its effective tax rate stays down.

Bottom Line

Adobe made it clear that it plans to spend money to expand, and the firm recently highlighted the growth of one of its newer segments, Document Cloud. But Adobe’s bread and butter creative suite is a high margin business that allows it to return money to investors. Adobe is also currently a Zacks Rank #3 (Hold) and sports a “B” grade for both Growth and Momentum in our Style Scores system.

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Check back later for our full analysis on URBN’s earnings report!

Want more market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!

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ManpowerGroup Inc. (MAN) - free report >>

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