For Immediate Release
Chicago, IL – November 19, 2019 – Zacks Equity Research Shares of Amedisys (AMED - Free Report) as the Bull of the Day, Six Flags Entertainment (SIX - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Target (TGT - Free Report) , Walmart (WMT - Free Report) and Disney (DIS - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Amedisys is a company that provides home health and hospice services throughout the U.S. It offers clinically focused programs for conditions like diabetes, congestive heart failure, orthopedics, and various rehabilitative programs, as well as hospice services to patients using an interdisciplinary care team.
Q3 Earnings Impress
Amedisys’ bottom line surged past the Zacks Consensus Estimate; non-GAAP earnings of $1.15 per share increased 21% year-over-year. Revenue of $495 million came in line with our consensus and grew $18.5% from the prior-year period.
The Home Health segment, which is the company’s biggest revenue generator, hit $311.5 million, up 5.6% year-over-year. Hospice jumped 57% year-over-year, while Personal Care increased 9% to $20.7 million.
“All three of our lines of business continue to grow; we have made great progress integrating the Compassionate Care acquisition; and most importantly, we are once again near the top of the industry in quality for both Home Health and Hospice,” said CEO and president Paul B. Kusserow.
Year-to-date, AMED is up 32%. Estimates have been rising lately too, pushing the stock towards a Zacks Rank #1 (Strong Buy).
For the current fiscal year, Amedisys’ earnings is expected to grow about 21% year-over-year. Eight analysts have revised their estimate upwards in the past 60 days, and the Zacks Consensus Estimate has jumped 23 cents higher from $4.16 to $4.39 per share during the same time frame.
2020 looks strong too, and earnings could see growth of 10.4%; next year’s consensus estimate sits at $4.85 per share, with six upward revisions in the last 60 days.
Looking ahead, Amedisys expects fiscal 2019 revenue to fall in the range of $1.94 billion and $1.98 billion, and adjusted EPS for the full-year to come in between $4.32 and $4.39 per share.
Because there can be uncertainty when investing in healthcare stocks, management urged “caution in considering the current trends and 2019 guidance.” Amedisys operates in a very competitive space, and an industry that is subject to heavy regulation. Despite intense market fluctuations this year, AMED has proven that it has been able to grow its key business segments. If you’re an investor looking for a broad healthcare stock to add to your portfolio, make sure to keep AMED on your shortlist.
Bear of the Day:
Six Flags Entertainment owns and operates regional theme parks, offering guests rides, water attractions, concerts, shows, restaurants, game venues and retail outlets. The company also holds long-term licenses for certain Warner Bros. and DC Comic characters like Bugs Bunny and Batman.
Shares Tumble After Disappointing Q3 Earnings
Last month, Six Flags reported underwhelming earnings for its fiscal 2019 third quarter. Q3 comprises its peak period too, so investors were doubly disappointed. Earnings of $2.11 per share lagged behind the Zacks Consensus Estimate of $2.30. Revenue managed to grow 1% year-over-year to $621.2 million, but fell well below what analysts were expecting.
Spending per guest was down 1% because of higher attendance from its Active Pass base, and revenue from sponsorships, accommodations, and international agreements dropped 26%. One bright note in the quarter was its membership program, however. Even though it pushed down per-guest spending, Q3’s attendance showed that Active Pass is boosting guest visit totals.
As a result, shares tumbled almost 12% after the report was released. And, SIX is down over 17% year-to-date.
Analysts have since turned bearish on Six Flags, with nine cutting estimates in the last 60 days for the current fiscal year. The Zacks Consensus Estimate has dropped 16 cents during that same time period from $2.78 to $2.62 per share. This sentiment has stretched into 2020, and our consensus estimate has fallen 19 cents in the past two months.
SIX is now a Zacks Rank #5 (Strong Sell).
Management didn’t provide guidance in the earnings press release, but the fact that Six Flags struggled to generate meaningful growth in its key quarter—40% of revenue comes from the third quarter—may not be a great sign, especially as consumer spending is strong right now.
Target (TGT - Free Report) Q3 Earnings On Deck: Can It Reach New Highs?
Target is set to report its third quarter performance before the opening bell on Wednesday, November 20. The retailer has seen its shares rise over 69% in 2019 and is currently trading around 2% below its 52-week high of $114.83.
Target has focused on expanding its digital presence, which will make its e-commerce figures imperative in the upcoming report. Wall Street will also look to Target’s guidance for the vital holiday shopping period.
Digital Sales Drive Growth
Target posted an impressive Q2 performance, with comparable digital sales up 34% to account for 7.3% of total sales. Nearly one-third of these sales came from same-day services, in-store pickup, Drive-Up, and Shipt. The uptick in these digital options shows how Target is using digital commerce to improve the profitability of physical stores.
CEO Brian Cornell was pleased with the performance and stated "These are remarkable statistics, and they demonstrate how rapidly our guests are learning about and embracing these new convenient options." Wall Street and investors will be looking for these digital channels to continue their remarkable growth and for consumers to continue to adopt these new ways of shopping.
Target also reports after its main competitor, Walmart, posted its Q3 results that highlighted strong operating metrics in its core US segment. This could put pressure on TGT as investors expect a strong report to assure them that Target isn’t giving up any ground to Walmart.
Target’s same-day services are expected to continue to bolster the company’s bottom-line but some are worried about the sustainability of the model. Some investors feel that the services will only be sustainable while the number of orders being fulfilled is still relatively small. Wall Street will look for updates on the success of the supply chain fulfillment and how management plans to handle the growth.
In preparation for the busiest shopping season of the year, Target is spending $50 million more on payroll during the fourth quarter than it did a year ago. The retailer is also offering enticing shipping deals from Nov. 1 through Nov. 21, which includes free shipping on thousands of items with no minimum purchase. And Target’s partnership with Disney should help the retailer boost its toy sales during the holidays.
Our Q3 consensus estimates forecast a bottom-line hike of 8.26% to $1.18 per share and a top-line gain of 3.63% to $18.47 billion. Comparable store sales in the third quarter are projected to come in at 3.67% and the retailer is estimated to add nine more stores from its Q2 2019 figure. Looking ahead to fiscal 2019’s figures, our estimates anticipate earnings to climb 14.47% to $6.17 per share and for net sales to reach $78.33 billion for a 3.95% rally.
Target has seen its earnings estimates revised higher, which helps TGT earn a Zacks Rank #2 (Buy). Target is also currently trading just below its all-time high and it hopes that an impressive Q3 report can send it soaring to new levels. However, to reach new record levels, Target will need to show investors that its digital commerce channels can continue to grow.
Wall Street might also expect Target to provide strong guidance for the fourth quarter. This would help assure investors that the holiday season is set to be bountiful for Target.
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