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Abercrombie & Fitch, Cirrus Logic, DTE Energy, NextEra Energy and Xcel Energy highlighted as Zacks Bull and Bear of the Day

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·10 min read
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For Immediate Release

Chicago, IL – June 16, 2021 – Zacks Equity Research Shares of Abercrombie & Fitch Co. ANF as the Bull of the Day, Cirrus Logic, Inc. CRUS as the Bear of the Day. In addition, Zacks Equity Research provides analysis on DTE Energy Company DTE, NextEra Energy, Inc. NEE and Xcel Energy Inc. XEL.

Here is a synopsis of all five stocks:

Bull of the Day:

Abercrombie & Fitch is a specialty retailer of premium, high-quality casual apparel for men, women, and kids through a network of approximately 850 stores across North America, Europe, Asia and the Middle East. Its product portfolio includes knit and woven shirts, jeans, sweaters, outerwear, and accessories for men, women and kids, under the Abercrombie & Fitch, abercrombie kids and Hollister brands.

Q1 Earnings Recap

Investors cheered Abercrombie's latest earnings release, sending the stock up 13% the day of its pre-market report.

Revenue grew 61% year-over-year in the first quarter, and digital sales spiked 45% (and making up 52% of total sales). Even more notable is that Q1 sales were up 6% from Q1 2019 sales, showing that ANF's growth goes beyond just rebounding from the coronavirus pandemic. The company's styles and collections are clearly resonating with shoppers looking to buy more than just sweatpants.

Adjusted earnings hit $0.67 per share, a big improvement from a loss of $3.30 per share in 2020.

Management also said that inventories remained "tightly controlled," which helped improve price realization and benefitted the retailer's gross margin rate, which expanded by 900 basis points.

ANF Breaks Out

Year-to-date, shares of ANF have jumped over 111% compared to the S&P 500's 13% increase. Earnings estimates have been rising too, and ANF is a Zacks Rank #1 (Strong Buy) right now.

For fiscal 2022, seven analysts have revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up $1.45 to $2.84 per share. Earnings are expected to grow about 489% compared to the prior year period. Fiscal 2023 looks strong too, with continuing bullish sentiment from analysts.

Looking ahead, CEO Fran Horowitz said they're "excited about the future," and commented in the earnings report that momentum is continuing in the second quarter across all of its brands. The retailer remains focused on profitable revenue growth and the expansion of its digital platforms.

If you're an investor searching for a retail stock to add to your portfolio, make sure to keep ANF on your shortlist.

Bear of the Day:

Headquartered in Austin, TX, Cirrus Logic is a fabless semiconductor supplier, which develops, manufactures and markets analog, mixed-signal, and audio DSP integrated circuits (ICs).The company's chips are used in a wide range of industrial and consumer markets including portable and non-portable media players, smartphones, tablets, home-theater receivers, automotive entertainment systems, televisions, docking stations, as well as wearables which includes, smart watches, action cameras, smart bands and VR headsets.

Why CRUS's Q4 Earnings Disappointed

Shares of Cirrus plunged as much as 17.5% after the company's fourth quarter update was released.

Sales fell 5% year-over-year to $293.5 million and adjusted earnings came to $0.66 per share, both missing the Street consensus of $302.5 million and $0.71 per share.

Like other chip makers, supply constraints impacted the company's top line as well as its outlook for Q1 2022. Management set the midpoint of its current quarter revenue guidance 8% below projections.

Non-GAAP gross margin was 50.5%, while non-GAAP operating expenses came to $106 million.

Bottom Line

CRUS is now a Zacks Rank #5 (Strong Sell).

Six analysts have cut their full year earnings outlook over the past 60 days, with Cirrus' bottom line expected to grow only 2.2% year-over-year. But Wall Street has raised its earnings picture for 2023, and next year's consensus has increased five cents to $5.18 per share.

Shares have been volatile so far in 2021. Year-to-date, CRUS is down 3.5% compared to the Nasdaq and S&P 500's gain of 9.2% and 13%, respectively.

Cirrus' short-term weakness is a direct result of the global semiconductor shortage, and even though management expects this core issue to linger for a few more quarters, there's no doubt the chip industry will recover in the long run. CRUS, then, could be ripe for a rebound once the chip industry's manufacturing capacity gets back to normal.

Additional content:

3 Utility Stocks in Focus After Praise for Global Wind

With the world reeling under the impact of rising emission, utilities across the globe are shifting focus to clean renewable sources of energy. Also, favorable government policies along with such affordable sources are making these players a lucrative option for investors. Per the U.S. Energy Information Administration (EIA), electricity generation from renewable sources is likely to increase to 21% in 2021 and 23% in 2022 from 20% in 2020.

WindEurope along with the Global Wind Energy Council (GWEC) comes forward every year on Jun 15 to celebrate the Global Wind Day, and to discuss and discover the power of wind energy. Today on this occasion, let's take a look at the evolution of wind energy and how it gradually became a prominent agent of power to further strengthen its effects in the upcoming years.

Per the Mordor Intelligence, the global wind power capacity installed is expected to see a CAGR of more than 8%, thus totaling the installed capacity to 1,166.73 gigawatt (GW) by 2026 from the base figure of 650.54 GW in 2019.

Talking of the United States in particular, total annual electricity generation from wind energy grew to 338 billion kilowatt hours (kWh) in 2020 from 6 billion kWh in 2000, per EIA. Also, wind turbines accounted for 8.4% of the total U.S. electricity generation last year. Moreover, according to the 2021 U.S. Renewable Energy Outlook Report submitted by the S&P Global Market Intelligence, above 21 GW of wind capacity is expected to come online by this year-end.

U.S. utilities have been making sufficient investments over the years to increase the share of wind power in their renewable energy portfolio. Also, President Joe Biden's concentration on renewable energy is likely to support the industry players' efforts. As part of the government's plans, it extended its production tax credit of 1.5 cents per kWh for wind projects for another year, which was earlier set to expire at the end of 2020.

Moreover, consistent investments in Research and Development led to the ongoing expansion in the size of wind turbines, which in turn, helps producing more energy per tower. Another factor making wind energy a perfect eco-friendly choice is that it enables utilities to meet their emission-reduction goals, thereby making their operations sustainable in nature.

Key Picks

We picked a few stocks that made efforts to widen the wind energy share in their portfolio. Also, these companies have performed better than the Zacks Utility-Electric Power industry in the past year and all carry a Zacks Rank #3 (Hold) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Shares of DTE Energy, NextEra Energy and Xcel Energy have gained 28.1%, 18.1% and 8.3%, respectively, in the past year, outperforming the industry's rise of 7.6%.

DTE Energy is a diversified energy company with operating units including an electric company and a natural gas company. It plans to add 850 MW of wind energy during the 2020-2025 time period.

The company remains committed to reduce carbon emissions from its electric utility operations by 32% within 2023, 50% within 2030 and 80% by 2040 from the 2005 carbon-emission levels. Also, its long-term earnings growth rate is pegged at 5.50%.

NextEra Energy's operations include generation, transmission, distribution and the sale of electric power to retail and wholesale customers. The company generates electricity through wind, solar, nuclear and fossil fuel. The utility has plans to add 5,950-7,900 MW of wind assets to its generation portfolio in the 2021-2024 time period.

Its unit Florida Power & Light Company aims to trim its combined emission rate by 62% within 2030 from the industry's average figure in 2005. Also, its long-term earnings growth rate is pegged at 7.79%.

Xcel Energy's operating utilities are engaged in generating, purchasing, transmitting, distributing and selling electricity in the United States. It generates electricity using coal, nuclear, hydro, wind and solar energy. It plans to spend $210 million on augmenting wind power generation by 120 MW capacity within 2022.

The company has nearly 4,000 MW wind projects in service to date. It plans to achieve 85% carbon reduction by 2030 and 100% carbon-free electricity by 2050. Also, its long-term earnings growth rate is pegged at 6.11%.

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Xcel Energy Inc. (XEL) : Free Stock Analysis Report
 
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
 
DTE Energy Company (DTE) : Free Stock Analysis Report
 
Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report
 
Cirrus Logic, Inc. (CRUS) : Free Stock Analysis Report
 
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