Build-A-Bear Workshop and Boyd Gaming have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – October 30, 2023 – Zacks Equity Research shares Build-A-Bear Workshop BBW as the Bull of the Day and Boyd Gaming BYD as the Bear of the Day. In addition, Zacks Equity Research provides analysis on PepsiCo, Inc. PEP, The J. M. Smucker Co. SJM and Lamb Weston Holdings, Inc. LW.
Here is a synopsis of all five stocks:
Bull of the Day:
Exxon Mobil Corporation is a well-rounded oil and gas titan that’s gone on an There is a silver lining to the market right now. With the broad market averages under so much pressure, there are a lot of stocks on sale. There are dozens of stocks that are off 20% in the last few months which are still making a ton of money. One way to find companies that are still making money is by leaning on the power of the Zacks Rank.
Today's Bull of the Day is one such stock. It's Zacks Rank #1 (Strong Buy) Build-A-Bear Workshop.Build-A-Bear Workshop, Inc. operates as a multi-channel retailer of plush animals and related products in the United States, Canada, the United Kingdom, Ireland, and internationally. The company operates through three segments: Direct-to-Consumer, Commercial, and International Franchising. Its merchandise comprises various styles of plush products to be stuffed, pre-stuffed plush products, and sounds and scents that can be added to the stuffed animals, as well as range of clothing, shoes and accessories, and other toy and novelty items, including family sleepwear.
The reason for the favorable rank is that analysts have increased their earnings estimates for the current quarter, next quarter and next year. The bullish moves have pushed up the Current Year Zacks Consensus Estimate from $3.46 to $3.60. That now represents 16.88% EPS growth year-over-year. Next year's number is forecast to swell another 9.26% to $3.94.
That puts the current forward PE down at 6.78x earnings. Compare that to an industry average of 11.4x or the S&P 500's 18.3x. A PE that low typically doesn't come with a stock that has growth forecasts as good as Build-A-Bear. The stock is also trading at a 0.74 multiple of sales, making this a value play for sure.
Last quarter's 39% earnings beat got the company back on track after a miss earlier in the year. Still, estimates have continued to tick to the upside while the stock is off considerably from highs near $30. We saw a similar pattern into the Fall of last year with the stock coming down from over $20 to $13 while EPS stayed elevated. I'm looking for that gap between earnings and the stock price to close into the end of the year.
Bear of the Day:
The market has been under extreme pressure since topping out at the end of July. Small caps have bled in the headlines but it's been ugly everywhere. Over the last three months, not a single sector is in the green. Leading the way down, Real Estate and Utilities are off 16.59% and 14.07% respectively.
With so many stocks near lows, it can feel like the dartboard approach will work...eventually. One way to put your money in the best position to succeed is by investing in stocks with strong earnings trends and minimizing exposure to stocks with weak earnings trends. One way to avoid stocks with weak trends is by avoid stocks which are not in the good graces of our Zacks Rank.
One such stock is today's Bear of the Day. It's Zacks Rank #5 (Strong Sell) Boyd Gaming. Boyd is a huge gaming company that owns and operates gaming entertainment properties in Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Ohio and Pennsylvania.
The reason for the unfavorable Zacks Rank is that six analysts have cut their estimates for the current year and next year over the last week. That bearish sentiment has cut our Zacks Consensus Estimate for the current year from $6.36 to $6.14 with next year's number off from $6.59 to $6.12. That means next year is now forecast to contract earnings by 35 bps.
The Gaming industry ranks in the Bottom 40% of our Zacks Industry Rank.
Additional content:
3 Safe Stocks to Buy as Consumer Sentiment Continues to Come Down
Wall Street has been volatile over the past three months as investors are scrambling to find direction amid growing concerns of a recession, with the Fed indicating another interest rate hike this year.
Consumer sentiment also has continued to plummet, reflecting uncertainty in the minds of consumers about the economy's health. Given this situation, investing in stocks such as PepsiCo, Inc., The J. M. Smucker Co. and Lamb Weston Holdings, Inc. from the defensive sector should be safe.
Consumer Sentiment Tumbles
The preliminary reading for consumer sentiment in October came in at 63, missing the consensus estimate of 67.4, the University of Michigan reported earlier this month. This follows the final reading for September which came in at 68.1.
Consumer sentiment has now declined for the third straight month, marking the longest stretch since May.
The Present Situation Index, which reflects consumers' evaluations of current business and labor market conditions, dropped from 71.4 in September to 66.7 in October.
Also, the Expectations Index, which represents consumers' short-term outlook for income, business, and labor market conditions, decreased from 66 in the previous month to 60.7 in October. Both of these indexes have now reached their lowest points since May.
Meanwhile, expectations for the one-year inflation rate jumped to 3.8% in October, up from 3.2% in September, marking the highest level since May. Also, the 5-year long-term inflation expectations rose to 3% in October from 2.8% in September.
U.S. GDP grew at a solid 4.9% annualized clip in the third quarter, surpassing the consensus estimate of a rise of 4.7%, the Commerce Department reported on Oct 26. However, this didn't help the markets much as all three major indexes tumbled on Thursday once again.
Understandably, consumers are worried about the economy's health as the Fed said that inflation, despite declining sharply from its peak of 9.1% in June 2022, remains elevated and a lot higher than its 2% target.
The Fed left its benchmark interest rates unchanged in its September FOMC meeting in the current range of 5.25-5.5% after hiking rates by 525 basis points since March 2022.
However, Federal Reserve Chair Jerome Powell also said that another rate hike by 25 basis points would be required this year. Moreover, the central bank also revised its rate cut forecast from four to two in 2024, which means that the higher interest rates will stay for a longer period than projected earlier.
Our Choices
To secure one's portfolio, we have thus narrowed our search to three stocks from the consumer staples stocks. Also, these stocks belong to the category of low-beta stocks (beta greater than 0 but less than 1). Hence, the recommended approach is to invest in low-beta stocks with a high dividend yield and a favorable Zacks Rank. Each of the stocks has a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
PepsiCo, Inc. is one of the leading global food and beverage companies. PEP's complementary brands/businesses include Frito-Lay snacks, Pepsi-Cola beverages, Gatorade sports drinks, Tropicana juices and Quaker foods. PepsiCo serves customers in more than 200 countries and territories.
PepsiCo has an expected earnings growth rate of 11.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the last 60 days. PEP currently has a Zacks Rank #2. PepsiCo has a beta of 0.55 and a current dividend yield of 3.12%.
The J. M. Smucker Company is a leading marketer and manufacturer of consumer food and beverage products and pet food and pet snacks in North America. SJM boasts a strong portfolio of iconic food and beverages. The J. M. Smucker Companymainly caters to coffee, pet food, peanut butter, fruit spreads, baking products, ready-to-spread frostings, frozen sandwiches, flour, juices and beverages, and portion control products.
The J. M. Smucker Company has an expected earnings growth rate of 8.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.9% over the last 60 days. SJM currently has a Zacks Rank #2. The J. M. Smucker Company has a beta of 0.28 and a current dividend yield of 3.70%.
Lamb Weston Holdings, Inc.is a leading global manufacturer, marketer and distributor of value-added frozen potato products, particularly French fries, and provides a range of appetizers. LW, along with its joint venture allies, is the top frozen potato products supplier in North America, while it also operates internationally, with a robust and growing presence in emerging markets.
Lamb Weston's expected earnings growth rate for the current year is 24.8%. The Zacks Consensus Estimate for the current-year earnings has improved 12.1% over the past 60 days. LW currently has a Zacks Rank #2. Lamb Weston has a beta of 0.55 and a current dividend yield of 1.26%.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
https://www.zacks.com
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
PepsiCo, Inc. (PEP) : Free Stock Analysis Report
The J. M. Smucker Company (SJM) : Free Stock Analysis Report
Boyd Gaming Corporation (BYD) : Free Stock Analysis Report
Build-A-Bear Workshop, Inc. (BBW) : Free Stock Analysis Report
Lamb Weston (LW) : Free Stock Analysis Report
