For Immediate Release
Chicago, IL – November 29, 2018 – Zacks Equity Research highlights Intel Corporation (INTC - Free Report) as the Bull of the Day, Dillard's Inc. (DDS - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Boeing (BA - Free Report) .
Here is a synopsis of all the three stocks:
Bull of the Day:
Intel Corporation has been a chipmaking powerhouse for decades after it officially became the world’s largest semiconductor supplier in the early 1990s. Today’s market is more crowded and Intel has faced some serious setbacks. But Intel is coming off an impressive quarter and its Q4 and full-year projections look strong.
Intel announced earlier in November that its board approved a $15 billion increase in its stock repurchase program. Right off the bat, this likely signals that Intel executives believe INTC stock is undervalued. Plus, it helps create more value for shareholders as the relative ownership stake of each investor increases.
Meanwhile, Intel posted strong third quarter financial results at the end of October. The company’s revenues surged 19% to $19.16 billion, which not only topped expectations but marked an all-time Q3 record. Some of Intel’s more buzz-worthy segments, such as IoT and its Mobileye autonomous vehicle unit, both achieved record revenue.
On the other side, the company’s adjusted quarterly earnings soared 39% to $1.40 per share. Intel also raised its fourth-quarter earnings and revenue outlook.
Bear of the Day:
Dillard's Inc. is coming off a disappointing bottom-line miss last quarter and its stock price has plummeted over the last six months. Looking ahead, the fashion retailer’s holiday quarter earnings and revenue outlook appears less than inspiring.
Dillard's closed its most recent quarter with 267 official Dillard’s locations and 25 clearance centers. The Little Rock, Arkansas-based firm’s adjusted Q3 earnings plummeted roughly 34% from the year-ago quarter to hit $0.27 per share, which also fell well short of our $0.56 a share Zacks Consensus Estimate.
Meanwhile, the department store operator posted revenue of $1.46 billion. This came in above our estimate and marked a 4.2% jump from the year-ago period. “While we are encouraged by our 3% comparable sales performance, this was a disappointing quarter as markdowns weighed heavily on gross margin, particularly in the first month,” CEO William T. Dillard, II said in a company statement.
Stock Price Movement
As we mentioned at the top, shares of DDS have tumbled roughly 14% in the last six months, which is worse than its peer group’s 3% decline. Plus, we can see that the last five years have been a rollercoaster for Dillard’s.
DDS stock closed regular trading Wednesday up 2.54% to $70.53 per share. This still represented a roughly 29% downturn compared to the company’s 52-week high of $98.75 per share.
Outlook & Earnings Trends
Looking ahead, our current Zacks Consensus Estimate is calling for Dillard’s Q4 revenues to sink by 5.4% to reach $1.99 billion. The fashion retailer’s full-year revenues are projected to slip by 0.25% to hit $6.41 billion. Plus, if we take a peek ahead to fiscal 2019, the company’s revenues are projected to drop marginally from our current year outlook.
Moving on, Dillard’s adjusted quarterly earnings are expected to fall by 7.1% to hit $2.62 per share. Investors should note that the company’s adjusted fiscal 2018 earnings are projected to surge by 19.38%. However, fiscal 2019’s earning picture is then expected to dip 5% below our 2018 estimate.
Maybe more importantly, Dillard’s earnings picture has turned more negative over the past 30 days. DDS’ Q4 earnings estimate has slipped by $0.19 per share during this stretch. Meanwhile, the company’s full-year earnings estimate fell by $0.75 a share.
Why Was Boeing (BA - Free Report) Surging on Wednesday?
Shares of Boeing were up more than 4.5% in afternoon trading hours Wednesday, as investors reacted positively to Fed chair Jerome Powell’s speech and a pair of headlines involving the aerospace behemoth specifically.
U.S. stocks in general moved higher Wednesday afternoon on the back of Powell’s statement that interest rates are close to neutral. Wall Street interpreted this as an indication that the Fed is nearing the end of its rate hike cycle, which is a shift in tone from where the central bank stood just a few months ago.
Powell and the rest of his committee are expected to raise rates by 25 basis points in December. Investors in recent months have grown concerned that the Fed is raising rates too quickly, but now it appears some reprieve is on the horizon.
The S&P 500 jumped as much as 1.8% on the news. The Dow Jones Industrial Average added about 550 points, putting the blue chip index on track for its best trading session since late March.
Dow component Boeing saw added gains in the wake of a few headlines. Notably, a WSJ report said that investigators in Indonesia are now exploring whether maintenance issues were at fault for a deadly crash involving a Boeing 737 in October. It appears possible that human maintenance mistakes, rather than fundamental issues with the 737, contributed to the accident.
Investors also reacted favorably to the news that Boeing inked a new deal with Israel Aerospace Industries. Boeing will reportedly provide the state-owned aerospace company with contracts worth billions of shekel.
Boeing recently agreed to a “reciprocal procurement” with Israel that will see the Chicago-based company spend billions of dollars in the country if its wins certain defense contracts.
Analysts have been largely impressed with Boeing recently. The stock has seen nine positive revisions to its full-year and next-year EPS estimates within the last 60 days, with no negative revisions to any estimates coming in over that time.
Boeing is now expected to see earnings of $18.08 per share in 2019, which would represent growth of 20% from this year’s projected total. Full-year earnings growth is expected to reach 25% in 2018. Positive estimate revisions and upbeat earnings surprises in recent quarters have earned Boeing a Zacks Rank #2 (Buy).
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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.
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