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Headquartered in Deerfield, IL, Caterpillar is the world's largest heavy-machinery maker and seen as a bellwether for global economic activity.
The company has benefitted a lot from improving global growth since it derives about half its sales from international markets.
Impressive Results
Caterpillar delivered excellent results for Q1, beating on both the top and bottom lines and also raised its guidance.
Adjusted earnings per share of $2.82 were up 120% year over year, thanks to continued strength in many of its end markets and excellent cost control.
Revenues were up 32% year over year, mainly due to improved end-user demand and favorable changes in dealer inventories.
“The combination of strength in many of our end markets and our team’s continued focus on operational excellence - including strong cost control - helped us deliver improved margins and a record first-quarter profit,” said the CEO.
“Based on our strong first-quarter results and higher demand across all regions and most end markets, we are raising our outlook for 2018.”
Caterpillar shares surged in pre-market trading but later dropped about 6% on concerns that earnings may have peaked after the CFO said during the conference call that the quarter could prove to be a “high-water mark” for the year.
The stock has rebounded nicely since then as many investors saw the dip as an excellent opportunity to buy the shares. Easing of trade war concerns also helped the stock.
Rising Earnings Estimates
Analysts have raised their estimates for the company after excellent earnings. Zacks Consensus Estimates for the current and the next fiscal year have increased to $10.58 per share and $12.03 per share from $9.85 and $11.17, before the results.
The company has been beating estimates consistently over the past few quarters. The average positive surprise for the past four quarters is 33.44%.
Tupperware Brands Corporation is a multi-brand, multi-category, relationship-based sales company. It primarily manufactures and sells preparation, storage, and serving solutions for the kitchen and home.
The company made its debut in 1946 and has now expanded its presence in almost 100 countries around the world. Its sales force consists of independent contractors who market products directly to consumers.
As the company derives about 70% of its sales from emerging markets, it is a play on the growing middle class with rising incomes in these countries.
Lackluster Results and Guidance
GAAP net income was $35.7 million down from $47.4 million in 2017. Adjusted, diluted earnings per share were $0.91, 10-cents below the low-end of the their guidance range but slightly ahead of the Zacks Consensus Estimate of $0.88.
Established market sales decreased 12% (and 19% local currency), while emerging markets, were up 3% (1% local currency), thanks mainly to growth in China.
"Due to our soft result on the top-line, as well as a higher tax rate, adjusted earnings per share in the first quarter was 10-cents below the low-end of our January guidance range and 16% below the prior year in local currency,” said the CEO.
Shares of Nvidia have slipped since the company reported strong first quarter financial results on May 10. This slight post-earnings dip might present investors the best chance to buy Nvidia stock at this price for some time. Let’s take a look why.
Q1
To briefly recap Nvidia’s first quarter, the company’s adjusted earnings skyrocketed 141% from the year-ago period to $2.05 per share. Meanwhile, the Santa Clara, California-based tech power’s revenues soared 66% to $3.21 billion. Furthermore, Nvidia’s crucial Gaming revenues popped 68% to touch $1.72 billion.
Future
Looking quickly ahead, Nvidia is projected to report second-quarter revenues of $3.11 billion, based on our current Zacks Consensus Estimates. This would mark over a 39% climb from the prior-year quarter. For the full-year, Nvidia’s revenues are expected to surge nearly 36% to touch $13.18 billion.
Moving on to the opposite end of the income statement, Nvidia’s bottom line is projected to expand by more than 81% in the second quarter to reach $1.83 per share. This outsized growth is expected to continue for the full-year, with Nvidia’s earnings projected to soar just over 60% to reach $7.90 per share.
Price Movement
On top of Nvidia’s strong first quarter and its impressive growth outlook, investors will want to take a quick glance to see how its stock has performed recently.
Shares of Nvidia have soared nearly 79% during the last year, which crushes the S&P 500’s 13.5% climb. Nvidia’s performance also outpaces its industry’s roughly 56% growth. For reference, Nvidia’s industry includes the likes of Texas Instruments and Intel. NVDA looks even better against the broader semiconductor market’s roughly 36% climb.
Jumping back over the last three years, Nvidia’s shares have skyrocketed 1,085% as its GPUs become more and more important in the multibillion-dollar gaming industry, data centers, and more. But even in the near-term, Nvidia’s stock price performance looks strong. Shares of NVDA have climbed nearly 28% since the start of the year, against its industry 18% climb and the S&P 500’s 2% expansion.
Despite Nvidia’s insane run of success and strong first quarter, shares of Nvidia closed Wednesday at $247.54 per share, which sits roughly 5% below its 52-week high of $260.50 per share.
Valuation
Now that we have looked at Nvidia’s recent quarterly performance and stock price movement, let’s get a feel for its current valuation picture. Coming into Thursday, Nvidia stock was trading at 34.7X forward 12-month Zacks Consensus EPS estimates, which marks a significant premium compared to its industry’s 18.3X and the S&P 500’s 16.9X.
But, Nvidia investors understand that the stock is a growth play at the moment and are likely not concerned about the company’s current valuation picture, especially considering its massive climb over the last several years. With that said, NVDA has traded as high as 57.4X forward 12-month earnings estimates over the last year, with a one-year median of 45.6X.
As investors can see, Nvidia stock is currently trading just above its year-long low and well below its high and median. Therefore, investors should be able to say with some confidence that Nvidia stock is not expensive at the moment. To some, Nvidia’s valuation might even appear rather attractive at its current level.
Bottom Line
Nvidia is currently a Zacks Rank #1 (Strong Buy) and sports an “A” grade for growth in our Style Scores system. Investors should also be pleased to note that Nvidia has received 11 earnings estimate revisions for its second quarter, with 100% agreement to the upside, all within the last 30 days. During this same timeframe, NVDA earned 12 full-year revisions, with the same 100% upside agreement.
Lastly, aside from data centers and gaming, Nvidia is ready to benefit from its presence in booming growth industries from artificial intelligence to self-driving vehicles.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Want more market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
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.
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.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/performance for information about the performance numbers displayed in this press release.
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Caterpillar, Tupperware, Nvidia, Texas Instruments and Intel as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – May 25, 2018 – Zacks Equity Research highlights Caterpillar (CAT - Free Report) as the Bull of the Day and Tupperware Brands Corporation (TUP - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Nvidia (NVDA - Free Report) , Texas Instruments (TXN - Free Report) and Intel (INTC - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Headquartered in Deerfield, IL, Caterpillar is the world's largest heavy-machinery maker and seen as a bellwether for global economic activity.
The company has benefitted a lot from improving global growth since it derives about half its sales from international markets.
Impressive Results
Caterpillar delivered excellent results for Q1, beating on both the top and bottom lines and also raised its guidance.
Adjusted earnings per share of $2.82 were up 120% year over year, thanks to continued strength in many of its end markets and excellent cost control.
Revenues were up 32% year over year, mainly due to improved end-user demand and favorable changes in dealer inventories.
“The combination of strength in many of our end markets and our team’s continued focus on operational excellence - including strong cost control - helped us deliver improved margins and a record first-quarter profit,” said the CEO.
“Based on our strong first-quarter results and higher demand across all regions and most end markets, we are raising our outlook for 2018.”
Caterpillar shares surged in pre-market trading but later dropped about 6% on concerns that earnings may have peaked after the CFO said during the conference call that the quarter could prove to be a “high-water mark” for the year.
The stock has rebounded nicely since then as many investors saw the dip as an excellent opportunity to buy the shares. Easing of trade war concerns also helped the stock.
Rising Earnings Estimates
Analysts have raised their estimates for the company after excellent earnings. Zacks Consensus Estimates for the current and the next fiscal year have increased to $10.58 per share and $12.03 per share from $9.85 and $11.17, before the results.
The company has been beating estimates consistently over the past few quarters. The average positive surprise for the past four quarters is 33.44%.
Bear of the Day:
Bear:
Tupperware Brands Corporation is a multi-brand, multi-category, relationship-based sales company. It primarily manufactures and sells preparation, storage, and serving solutions for the kitchen and home.
The company made its debut in 1946 and has now expanded its presence in almost 100 countries around the world. Its sales force consists of independent contractors who market products directly to consumers.
As the company derives about 70% of its sales from emerging markets, it is a play on the growing middle class with rising incomes in these countries.
Lackluster Results and Guidance
GAAP net income was $35.7 million down from $47.4 million in 2017. Adjusted, diluted earnings per share were $0.91, 10-cents below the low-end of the their guidance range but slightly ahead of the Zacks Consensus Estimate of $0.88.
Established market sales decreased 12% (and 19% local currency), while emerging markets, were up 3% (1% local currency), thanks mainly to growth in China.
"Due to our soft result on the top-line, as well as a higher tax rate, adjusted earnings per share in the first quarter was 10-cents below the low-end of our January guidance range and 16% below the prior year in local currency,” said the CEO.
Why Nvidia (NVDA - Free Report) Stock Is a Strong Buy
Shares of Nvidia have slipped since the company reported strong first quarter financial results on May 10. This slight post-earnings dip might present investors the best chance to buy Nvidia stock at this price for some time. Let’s take a look why.
Q1
To briefly recap Nvidia’s first quarter, the company’s adjusted earnings skyrocketed 141% from the year-ago period to $2.05 per share. Meanwhile, the Santa Clara, California-based tech power’s revenues soared 66% to $3.21 billion. Furthermore, Nvidia’s crucial Gaming revenues popped 68% to touch $1.72 billion.
Future
Looking quickly ahead, Nvidia is projected to report second-quarter revenues of $3.11 billion, based on our current Zacks Consensus Estimates. This would mark over a 39% climb from the prior-year quarter. For the full-year, Nvidia’s revenues are expected to surge nearly 36% to touch $13.18 billion.
Moving on to the opposite end of the income statement, Nvidia’s bottom line is projected to expand by more than 81% in the second quarter to reach $1.83 per share. This outsized growth is expected to continue for the full-year, with Nvidia’s earnings projected to soar just over 60% to reach $7.90 per share.
Price Movement
On top of Nvidia’s strong first quarter and its impressive growth outlook, investors will want to take a quick glance to see how its stock has performed recently.
Shares of Nvidia have soared nearly 79% during the last year, which crushes the S&P 500’s 13.5% climb. Nvidia’s performance also outpaces its industry’s roughly 56% growth. For reference, Nvidia’s industry includes the likes of Texas Instruments and Intel. NVDA looks even better against the broader semiconductor market’s roughly 36% climb.
Jumping back over the last three years, Nvidia’s shares have skyrocketed 1,085% as its GPUs become more and more important in the multibillion-dollar gaming industry, data centers, and more. But even in the near-term, Nvidia’s stock price performance looks strong. Shares of NVDA have climbed nearly 28% since the start of the year, against its industry 18% climb and the S&P 500’s 2% expansion.
Despite Nvidia’s insane run of success and strong first quarter, shares of Nvidia closed Wednesday at $247.54 per share, which sits roughly 5% below its 52-week high of $260.50 per share.
Valuation
Now that we have looked at Nvidia’s recent quarterly performance and stock price movement, let’s get a feel for its current valuation picture. Coming into Thursday, Nvidia stock was trading at 34.7X forward 12-month Zacks Consensus EPS estimates, which marks a significant premium compared to its industry’s 18.3X and the S&P 500’s 16.9X.
But, Nvidia investors understand that the stock is a growth play at the moment and are likely not concerned about the company’s current valuation picture, especially considering its massive climb over the last several years. With that said, NVDA has traded as high as 57.4X forward 12-month earnings estimates over the last year, with a one-year median of 45.6X.
As investors can see, Nvidia stock is currently trading just above its year-long low and well below its high and median. Therefore, investors should be able to say with some confidence that Nvidia stock is not expensive at the moment. To some, Nvidia’s valuation might even appear rather attractive at its current level.
Bottom Line
Nvidia is currently a Zacks Rank #1 (Strong Buy) and sports an “A” grade for growth in our Style Scores system. Investors should also be pleased to note that Nvidia has received 11 earnings estimate revisions for its second quarter, with 100% agreement to the upside, all within the last 30 days. During this same timeframe, NVDA earned 12 full-year revisions, with the same 100% upside agreement.
Lastly, aside from data centers and gaming, Nvidia is ready to benefit from its presence in booming growth industries from artificial intelligence to self-driving vehicles.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
Want more market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
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 >>
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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/performance for information about the performance numbers displayed in this press release.