For Immediate Release
Chicago, IL – August 24, 2018 – Zacks Equity Research highlights BJ’s Restaurants Inc. BJRI as the Bull of the Day, Newell Brands NWL as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Advanced Micro Devices AMD, Intel INTC and Nvidia NVDA.
Here is a synopsis of all five stocks:
Bull of the Day:
Founded back in 1978, BJ’s Restaurants Inc. is a California-based casual-dining restaurant and brewery chain. Their restaurants are either operated as a Brewery, which includes a brewery within it, or as a Brewhouse, which receives the beer it sells from one of its breweries or independent third-party brewers. BJ’s also operates a smaller format Pizza & Grill restaurant. Popular menu items include Chicago-style pizza and the unique dessert, the Pizookie.
BJ’s Q2 earnings performance marked the company’s third consecutive beat, with the bottom line surpassing our estimate by over 23%. Revenues also topped the Zacks Consensus, and grew 8.2% year-over-year. Notably, comparable restaurant sales jumped 5.6% thanks to a 2.5% increase in traffic, BJ’s best sales performance in several quarters.
Along with new initiatives like its slow-cooked menu, delivery, and handheld server tablets, management attributed this strong growth to its new menu items, off-premise sales, and Daily Brewhouse Specials.
BJRI also reported restaurant-level operating margin expansion of 120 basis points to 19% due to improving comps. Additionally, food and packaging costs dropped 120 basis points, and labor, which is the company’s biggest line item expense, was basically flat as a percentage of revenue for the quarter.
The company opened two new restaurants, including its 200th restaurant, and is on track with its goal of opening five new locations this year.
CEO Greg Trojan noted that during Q2, 42 of BJ’s restaurants set daily sales records, while 23 set weekly sales records. “As we move into the second half of 2018, we remain focused on driving sales and traffic and taking market share in the casual dining segment of the restaurant industry,” Trojan said.
Bear of the Day:
Newell Brands is a leading global consumer goods company headquartered in Hoboken, NJ. Its portfolio is full of well-known brands, including Paper Mate, Sharpie, EXPO, Elmer’s, Josten’s, Oster, Sunbeam, Mr. Coffee, Graco, Calphalon, Contigo, First Alert, and Yankee Candle.
Shares of NWL have experienced a rocky stretch lately, falling almost 30% year-to-date. Mixed results in Newell’s second-quarter earnings report didn’t help things either; the stock took an 18% hit as a result.
Looking at Newell’s Q2 report a little deeper, the company managed to beat the Zacks Consensus, but revenues lagged, marking the second consecutive miss; sales declined 12.8% year-over-year due to a new revenue recognition standard and the adverse impact of last year’s divestitures.
All of Newell’s main segments saw sales declines. Food & Appliances dropped almost 12% to $621 million; Home & Outdoor Living came in at $742 million, down 6.7% from the prior-year period; and Learnings & Development generated sales of $839 million, falling over 15% year-over-year.
AMD Stock Hits New High: Time to Buy?
Shares of Advanced Micro Devices soared over 6.5% Thursday to hit a 52-week high on the back of an analyst upgrade that highlighted the chipmaker’s ability to compete against rival Intel. The question for investors is should they buy AMD stock even after it climbed to a new high?
Analysts at Rosenblatt Securities raised their price target for shares of AMD from $27 to $30, which marked a roughly 44% upside from Wednesday’s closing price of $20.90 per share. The firm based its new AMD price target on the firm’s current advantages over Intel as well as Nvidia, which followed a meeting with AMD executives. “AMD never planned or expected Intel to have 10nm delays in their own product planning from years' back and acknowledges that a historical window of opportunity has opened,” analyst Hans Mosesmann wrote in a note to clients Thursday.
“We believe AMD has a multi-year advantage vs. Intel in CPUs with 7nm and a 6-month plus advantage vs. Nvidia in GPUs for the datacenter.”
Intel has experienced multiple delays on the mass production roll out of its 10-nanometer chips, which aren’t due out until late 2019. In contrast, AMD’s 7-nanometer products are set to launch later this year. Rosenblatt’s new $30 price target marks the highest of the 26 analysts who cover AMD, according to FactSet.
AMD saw its stock price surge over 6.5% through early afternoon trading Thursday to hit $22.29 per share, which represented a new 52-week high and marked its highest price point since 2006.
AMD’s climb is part of a massive run. Shares of AMD have skyrocketed over 116% since the start of the year, which blows away its industry’s 6% gains and the S&P 500’s roughly 7% jump. Over the last five years, AMD has seen its stock price soar over 522%. More impressively, shares of AMD are up 1,173% over the last three years, from under $2 per share in August of 2015.
Looking ahead, our current Zacks Consensus Estimate is calling for AMD’s full-year revenues to surge by 25.5% to hit $6.69 billion. At the other end of the income statement, the firm is expected to see its adjusted quarterly earnings soar 176% from $0.17 per share to $0.47 per share.
Investors should be pleased to see these impressive top and bottom line growth projection for AMD’s current fiscal year. However, the company’s earnings revision activity has been relatively mixed recently. AMD has seen five upward earnings estimate revisions for its current fiscal year as well the following year, over the last 30 days. But the firm has also seen three downward revisions during this same stretch for both periods, which helps land AMD a Zacks Rank #3 (Hold).
Plus, AMD is currently trading at 43X forward 12-month Zacks Consensus EPS estimates, which marks a massive premium compared to the S&P’s 17.4X and its industry’s 11X average. Therefore, AMD stock might be one to just keep an eye on for now, especially at a new decade-plus high.
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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.
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Newell Brands Inc. (NWL) : Free Stock Analysis Report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
BJ's Restaurants, Inc. (BJRI) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Intel Corporation (INTC) : Free Stock Analysis Report
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