Comfort Systems USA and DICK'S Sporting Goods have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – September 1, 2023 – Zacks Equity Research shares Comfort Systems USA FIX as the Bull of the Day and DICK'S Sporting Goods Inc. DKS as the Bear of the Day. In addition, Zacks Equity Research provides analysis on United Airlines UAL, American Airlines AAL and Delta Air Lines DAL.
Here is a synopsis of all five stocks:
Bull of the Day:
Comfort Systems USA provides comprehensive heating, ventilation, and air conditioning installation, maintenance, repair, and replacement services.
The company performs most of its services within manufacturing plants, office buildings, retail centers, apartment complexes, and healthcare, education, and government facilities.
Analysts have taken a bullish stance on the company's earnings outlook, landing the stock into the highly-coveted Zacks Rank #1 (Strong Buy).
The company resides within the Zacks Building Products – Air Conditioner and Heating industry, currently ranked in the top 2% of all Zacks industries due to positive earnings estimate revisions.
As many know, roughly half of a stock's movement can be attributed to its group, helping to clarify the importance of targeting industries seeing bright outlooks.
Aside from the improved earnings outlook and favorable industry standing, let's take a closer look at a few other traits of Comfort Systems USA.
Comfort Systems USA
The company sports a solid growth profile, with Zacks Consensus Estimates suggesting 44% EPS growth on 21% higher revenues in its current year. And peeking ahead to FY24, expectations allude to a further 15% improvement in earnings paired with a 15% revenue bump. FIX carries a Style Score of "B" for Growth.
Income-focused investors could be attracted to FIX also, with shares currently yielding a respectable 0.5% annually. While the yield may be on the lower end, the company's 15% five-year annualized dividend growth rate helps bridge the gap.
In addition, the company has been a stellar earnings performer, exceeding the Zacks Consensus EPS Estimate by an average of more than 20% across its last four releases. Just in its latest release, Comfort Systems USA posted an 18% EPS beat and reported revenue 7% above expectations.
The company's top line growth has remained steady and accelerated in recent quarters.
Perhaps to the surprise of some, shares have long-time outperformed the general market in a big way, annualizing a sizable 29% return over the last decade vs. the S&P 500's 12.8%. FIX shares have seen bullish activity following each of its previous three quarterly releases.
Bottom Line
Investors can implement a stellar strategy to find expected winners by taking advantage of the Zacks Rank – one of the most powerful market tools that provides a massive edge.
The top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.
Comfort Systems USA would be an excellent stock for investors to consider, as displayed by its Zack Rank #1 (Strong Buy).
Bear of the Day:
DICK'S Sporting Goods Inc. is a significant omnichannel sporting goods retailer that offers athletic shoes, apparel, accessories, and a broad selection of outdoor and athletic equipment for team sports, fitness, camping, fishing, tennis, golf, water sports, and more.
Analysts have slashed their earnings expectations as of late, pushing the stock down into an unfavorable Zacks Rank #5 (Strong Sell).
Let's take a closer look at a few other characteristics of DKS.
DICK'S Sporting Goods
The company's latest quarterly report disappointed investors, with DKS falling short of the Zacks Consensus EPS Estimate by 25% and delivering a fractional revenue surprise. Earnings declined 24% year-over-year, whereas revenue climbed 3.6% from the same period last year.
The company's profitability picture was massively impacted by elevated inventory shrink, a phenomenon DKS says many retailers are currently facing. And to top it off, DKS lowered its FY23 EPS outlook, causing shares to plummet post-earnings.
Shares now yield 3.5% annually following the sell-off, with a payout ratio sitting at 34% of the company's earnings. It's worth noting that the company has been committed to increasingly rewarding its shareholders, sporting a 25% five-year annualized dividend growth rate.
In addition, DKS shares presently trade at a 9.4X forward earnings multiple (F1), below the 10.8X five-year median and the respective Zacks industry average. Shares have traded as high as 12.5X in 2023.
Bottom Line
Negative earnings estimate revisions from analysts and a recent negative quarterly print paint a challenging picture for the company's shares in the near term.
DICK'S Sporting Goods is a Zacks Rank #5 (Strong Sell), indicating that analysts have taken a bearish stance on the company's earnings outlook.
For those seeking strong stocks, a great idea would be to focus on stocks carrying a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy) – these stocks sport a notably stronger earnings outlook paired with the potential to deliver explosive gains in the near term.
Additional content:
Buy Labor Day Weekend Await U.S. Airlines: 3 Stocks to Watch
It is a well-documented fact that air travel demand has bounced back very strongly from the pandemic lows. Driven by the buoyant passenger volumes in the current summer season, which has been the busiest one ever, the upcoming Labor Day holiday period is expected to be a very busy one for U.S. airlines.
The bullish expectation of the Transportation Security Administration or TSA pertaining to traffic volumes during the Labor Day holiday weekend further highlights the encouraging scenario. Therefore, we believe that investors interested in the industry would do well to keep U.S. airline stocks like United Airlines, American Airlines and Delta Air Lines on their radar.
With people taking to the skies in a big way in the post-COVID period, the airline industry, one of the hardest hit corners in the pandemic peak, is currently in good shape. Driven by the concept of 'Revenge travel', a term emanating from the prolonged periods of lockdown, people remain eager to undertake a flight despite headwinds like flight disruptions caused by labor shortages. Revenge travel highlights a strong desire to travel in response to the monotony and exhaustion of life caused by the COVID-19-induced lockdown.
Driven by the travel surge, the Federal Aviation Administration expects the upcoming Labor Day holiday weekend to be the third busiest one in 2023 so far, after the Juneteenth weekend, which was inclusive of Father's Day, and the break for Presidents Day.
The TSA's Projection
The TSA anticipates screening more than 14 million passengers in the Sep 1-Sep 6 period, despite the likely disruptions caused by the tropical storm Idalia. The busiest day during the period is likely to be Sep 1. On that day, TSA expects to screen more than 2.7 million travelers passing through security checkpoints.
Per TSA administrator David Pekoske, "We anticipate this Labor Day holiday weekend will be busy, with passenger volumes nearly 11% higher than last year, volumes that already exceeded 2019 Labor Day holiday travel volumes."
Highlighting the upbeat air-travel demand scenario, the TSA stated that it has screened approximately 227.5 million passengers since the Memorial Day weekend. This translates into an average of 2.5 million per day. To aid travel, many U.S. airlines are offering low fares for passengers who book their travel by Labor Day.
Given this rosy scenario, we have highlighted three airline stocks, that investors should keep tabs on.
Our Choices
United Airlines: UAL is seeing a steady recovery in domestic and international air travel demand. Anticipating to be extremely busy over the Labor Day holiday period, UAL's management expects that nearly 2.8 million passengers will travel by its flights in the Aug 31-Sep 5 period.
Riding on the buoyant air traffic scenario, UAL shares have gained 32.9% year to date. The company surpassed the Zacks Consensus Estimate for earnings in three of the last four quarters and missed the mark on the other occasion. The average beat was 17.2%. UAL currently sports a Zacks Rank #1 (Strong Buy).
You can see the complete list of today's Zacks #1 Rank stocks here
American Airlines: The company, currently carrying a Zacks Rank #3 (Hold), is benefiting from an improvement in air travel demand. To meet the anticipated demand swell over the Aug 31-Sep 5 period, AAL aims to operate approximately 32,000 flights during this period. The carrier expects that nearly 3.5 million passengers will travel by its flights in the above timeframe.
AAL surpassed the Zacks Consensus Estimate for earnings in all the last four quarters, with an average of 19.2%. AAL shares have gained 16.1% year to date.
Delta Air Lines: The company, currently carrying a Zacks Rank #3, is benefiting from an improvement in air travel demand. The buoyant air-travel demand scenario is likely to aid Delta in attracting significant traffic during the Labor Day holiday period.
DAL surpassed the Zacks Consensus Estimate for earnings in two of the last four quarters and missed the mark on the other two occasions. The average beat was 2.1%. DAL shares have gained 31.5% year to date.
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Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
United Airlines Holdings Inc (UAL) : Free Stock Analysis Report
DICK'S Sporting Goods, Inc. (DKS) : Free Stock Analysis Report
American Airlines Group Inc. (AAL) : Free Stock Analysis Report
Comfort Systems USA, Inc. (FIX) : Free Stock Analysis Report
