For Immediate Release
Chicago, IL – November 30, 2018 – Zacks Equity Research highlights On Deck Capital (ONDK - Free Report) as the Bull of the Day, Thor Industries (THO - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Boeing (BA - Free Report) , Lockheed Martin (LMT - Free Report) and Northrop Grumman (NOC - Free Report) .
Here is a synopsis of all the five stocks:
Bull of the Day:
On Deck Capital recently beat the Zacks Consensus Estimate and it has seen estimates move higher ever since the beat. That has pushed it to a Zacks Rank #1 (Strong Buy) and we take a look at how it got that way in this Bull of the Day article.
On Deck Capital, Inc. operates an online platform for small business lending in the United States, Canada, and Australia. It offers term loans and lines of credit. The company was incorporated in 2006 and is headquartered in New York, New York.
Most Recent Earnings Report
Back on November 6, ONDK posted a positive earnings surprise of 54% when the company reported earnings of $0.17 when $0.11 was expected.
This was the fourth consecutive beat of the Zacks Consensus Estimate but the 54% level was well below the recent average. The previous three reports were all 100% or more!
Following the recent report, the Zacks Consensus Estimate for the current quarter jumped from $0.11 to $0.16. That is a huge move.
The Zacks Consensus Estimate for next quarter increased by a penny and the full year number for 2018 increased from $0.44 to $0.53.
The Zacks Consensus Estimate for next year also moved higher. 90 days ago the number was $0.46, but now it sits at $0.53 and looks to go higher.
Positive changes in the Zacks Consensus Estimate are the primary contributing factors for the Zacks Rank to move higher.
Right now I see 14x forward multiple on ONDK. When compared to 23% top line growth, you see a big difference. A 2x book multiple is pretty low and the 1.5xsales also is at an attractive level.
Over the last three quarters, margins have been improving. Operating margin jumped from 0.78% in March to 3.18% in June and the September quarter shows a 6.84% number.
More revenue and higher margins mean that EPS will be growing. Keep this up and the multiple will increase as well.
Bear of the Day:
Thor Industries is a Zacks Rank #5 (Strong Sell) after missing its last quarter in mid-September and as it prepares to report again in early December. Estimates have slipped and let's look at why it is a Zacks Rank #5 (Strong Sell) in this Bear of the Day article.
Thor Industries manufactures a wide range of recreational vehicles (RVs) at various manufacturing facilities located in Indiana and Ohio and sold through independent dealers in the U.S. and Canada.
Back on September 20, the company missed the Zacks Consensus Estimate by $0.26 in reporting earnings of $1.67. The Zacks Consensus Estimate was looking for $1.93 so that translates into a negative earnings surprise of 13.4%.
This was the second miss in a row of the Zacks Consensus Estimate, with the prior quarter being a negative earnings surprise of 4.5%.
Over the last 90 days, estimates for THO have dropped. The Zacks Consensus Estimate for the current quarter slipped to $1.53 from $2.07 while the number for next quarter also slipped to $1.60 from $1.97.
The Zacks Consensus Estimate for the current year has dropped from $9.26 to $8.00 over that 90 day time horizon and the next fiscal year number has also slipped from $10.45 to $8.77.
Large drops like that in the Zacks Consensus Estimate will push a stocks rank down to the lower levels. That is just what happened to THO.
I see THO slated to report on December 6 before the market opens. Right now, there is a slightly negative Earnings ESP, so the most recently updated estimate by an analyst came in just below the consensus.
Here’s Why Boeing (BA - Free Report) Looks Like a Buy Right Now
Shares of Boeing jumped again Thursday, this time on the back of a positive Cowen note. Now that the aerospace powerhouse might be ready to leave the Indonesian crash headlines behind, let’s see why BA stock looks like it might be worth buying at the moment.
Boeing stock popped Wednesday after the Wall Street Journal reported that investigators in Indonesia have started to see if maintenance issues were at fault last in month’s fatal Lion Air jet crash that involved a Boeing 737. Boeing also on Wednesday signed an agreement with state-owned Israel Aerospace Industries. The Chicago-based company’s deal, said to be worth billions of shekels, is expected to see them provide new tanker aircraft and other defense products.
On top of that, a Cowen aerospace analyst said that Boeing is his number one stock pick for 2019. Cowen's Cai von Rumohr wrote in a note that clients Thursday that Boeing is “in a production sweet spot” moving into 2019. “Most investors miss the power of BA's favorable production environment and potential to deliver extended cash flow ramp,” the analyst said. “Given visibility of a seven-year backlog and still-solid traffic growth, it would take a sharp economic slowdown to disrupt the favorable current production outlook.”
Cowen currently has a $445 per share price target on Boeing, which marks a roughly 33% upside from Wednesday’s closing price of $333.50 per share.
BA stock is up 23% during the last 12 months to outpace the S&P 500’s 4% climb and its industry’s 3% jump—this includes the likes of Lockheed Martin and Northrop Grumman. Plus, Boeing stock has performed far better than one of its other main rivals, Airbus and its 4.1% expansion.
Moving on, Boeing is currently trading at 18.7X forward 12-month Zacks Consensus EPS estimates. This does represent a slight premium compared to the S&P and its industry, which are both currently trading at 16.5X. However, BA stock has crushed these two in terms of stock price movement over this stretch.
Plus, Boeing stock has traded as high as 30.6X over the last year, with a one-year median of 22.4X. Boeing is also currently trading not too far above its one-year low of 17.6X. Therefore, we can say that BA stock looks relatively attractive at its current level.
Outlook & Earnings Trends
Boeing is coming off a third quarter that saw its revenues jump 4% from the year-ago period to $25.15 billion. Meanwhile, the firm’s adjusted quarterly earnings soared 37%.
Looking ahead, Boeing’s Q4 revenues are projected to pop 6.3% to $26.96 billion, based on our current Zacks Consensus Estimate. Plus, the company’s full-year revenues are expected to hit $99.85 billion, which would mark a nearly 7% jump from fiscal 2017. Jumping even further ahead, Boeing’s 2019 revenues are projected to pop 6.25% above our current fiscal year estimate.
At the bottom end of the income statement, Boeing’s adjusted Q4 earnings are expected to slip by 6%. Yet, investors should be very pleased to see that the company’s fiscal 2018 earnings are projected to surge 25%. Boeing’s following fiscal year earnings are expected to climb 20% above our 2018 projection.
Boeing is currently a Zacks Rank #2 (Buy) and boasts a “B” for Growth in our Style Scores system. The aerospace giant’s stock also currently rests roughly 14% below its 52-week high, including Thursday's climb. Therefore, Boeing might be a stock to consider at the moment, especially when we remember that BA is a dividend payer, which always comes in handy.
Boeing raised its most recent quarterly dividend to $1.71 per share, up from $1.42 in the prior year.
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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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