Dell Technologies and Thermo Fisher Scientific have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – November 3, 2023 – Zacks Equity Research shares Dell Technologies DELL as the Bull of the Day and Thermo Fisher Scientific TMO as the Bear of the Day. In addition, Zacks Equity Research provides analysis on American Woodmark AMWD, Amazon.com AMZN and BuildABear Workshop BBW.
Here is a synopsis of all five stocks:
Bull of the Day:
Dell Technologies, a current Zacks Rank #1 (Strong Buy), provides information technology solutions. The company's segments include Client Solutions, Enterprise Solutions Group, and Dell Software Group.
Analysts have raised their expectations among all timeframes, with the revisions trends particularly notable for its current and next fiscal years.
In addition, the company resides within the Zacks Computers – IT Services industry, which is currently ranked in the top 22% of all Zacks industries. Roughly half of a stock's movement can be attributed to its group, helping to clarify the importance of targeting industries with favorable current standings.
Outside of its favorable industry standing and improved earnings outlooks, let's take a closer look at a few other company characteristics.
Dell Technologies
Since touching their 2023 low in mid-March, DELL shares have been on a tear, adding more than 90% in value and widely outperforming relative to the general market. Shares have been boosted by better-than-expected results post-earnings in back-to-back releases.
Regarding the most recent release, Dell Technologies posted a sizable 53% EPS beat relative to the Zacks Consensus Estimate, with revenue also positively surprising by more than 10%. Below is a chart illustrating the company's revenue on a quarterly basis.
For those seeking income while simultaneously getting exposure to the technology sector, DELL shares provide precisely that. Currently, shares yield a solid 2.2% annually paired with a sustainable payout ratio sitting at 24% of the company's earnings.
The company is expected to reveal its next quarterly release on November 30th. Currently, the Zacks Consensus EPS Estimate of $1.47 suggests a 35% pullback from the year-ago period, with the estimate up more than 8% since mid-August.
In addition, our consensus revenue estimate for the upcoming release stands at $22.9 billion, representing a decrease of 7% from the same period last year. The consensus estimate has moved 7% higher since mid-August, again reflecting optimism among analysts.
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.
Dell Technologies would be an excellent stock for investors to consider, as displayed by its Zack Rank #1 (Strong Buy).
Bear of the Day:
Thermo Fisher Scientific is a scientific instrument maker and a world leader in serving science. The company has three segments: Life Sciences Solutions, Analytical Instruments, and Specialty Diagnostics.
Analysts have slashed their earnings expectations across the board, landing the stock into an unfavorable Zacks Rank #5 (Strong Sell).
Let's take a closer look at how the company currently stacks up.
Thermo Fisher Scientific
It's been a bumpy road for TMO shares year-to-date, down nearly 19% and unable to establish consistent strength. As we can see by the arrows circled below, shares have faced adverse reactions post-earnings in several instances throughout 2023.
In its latest release, the company beat the Zacks Consensus EPS Estimate by 2% and posted a fractional revenue surprise. Earnings saw growth of 12% year-over-year, whereas revenue declined by roughly 1% from the year-ago period.
In addition, Thermo Fisher lowered its FY23 guidance following the results, citing a challenging macroeconomic environment. The company now expects FY23 sales to be $42.7 billion and adjusted EPS of $21.50.
It's worth noting that Thermo Fisher had already lowered FY23 guidance back in July, further reflected by share performance over the last several months.
The company has gone a long way in growing its dividend payout, carrying a sizable 16.5% five-year annualized dividend growth rate and reflecting its shareholder-friendly nature. TMO's payout ratio sits at just 7% of its earnings.
Bottom Line
Recent guidance cuts due to a challenging macroeconomic environment paint a challenging picture for the company's shares in the near term.
Thermo Fisher Scientific is a Zacks Rank #5 (Strong Sell), indicating that analysts have taken a bearish stance on the company's earnings outlook.
Additional content:
Wall Street Turning Around in the Final Months of 2023?
Major indexes in the United States registered their worst performance in five years last month and posted the third successive monthly loss, marking the longest losing streak since March 2020. Tension in the Middle East and high Treasury yields damaged the appeal of riskier assets like stocks.
However, amid the gloom, market pundits expect the stock market to bounce back in the final months of this year. This is because stocks, traditionally, have seen strong performance in the final three months of any year. Lest we forget, investors traditionally sell stocks in May only and return at the end of September or October to make most of the year-end upward wave.
Carson Group's Ryan Detrick added that by analyzing FactSet data, he found out that the broader S&P 500 Index historically gained in November after falling in August, September and October.
Moreover, stocks have already indicated that they have reached the bottom and are now poised to scale northward. For instance, the S&P 500, after falling into the correction territory last week, has recovered some ground so far this week.
In reality, U.S. stocks finished higher during the first day of trading in November, thanks to the Federal Reserve keeping interest rates unchanged in its latest policy meeting. As widely anticipated, the central bank kept the interest rates in the range of 5.25% to 5.5%.
Fed Chairman Jerome Powell also reassured that there is a growing possibility that the rate-hiking cycle is over since the slew of interest rate hikes for quite some time now has put downward pressure on inflation. Needless to say, the Fed's decision to hold rates steady boosted the stock market since rate hikes hamper economic growth, curtail consumer outlays, and increase the cost of borrowing.
Meanwhile, the U.S. economy remains in sound shape, and that may help stocks gain traction soon. The third-quarter GDP expanded at an annualized rate of 4.9%, the fastest growth in nearly two years, per the U.S. Bureau of Economic Analysis. An uptick in consumer spending helped the economy to accelerate.
Thus, with things looking up for the economy vis-a-vis the stock market, it's prudent for investors to place bets on stocks that are positioned to scale upward. These stocks carry a Zacks Rank #1 (Strong Buy) or 2 (Buy) and have a Growth Score of A or B, a combination that offers the best opportunities in the growth investing space. You can see the complete list of today's Zacks Rank #1 stocks here.
American Woodmark is the third-largest manufacturer of kitchen and bath cabinets. American Woodmark, currently, has a Zacks Rank #1 and a Growth Score of A.
The Zacks Consensus Estimate for its current-year earnings has moved up 18.3% over the past 60 days. AMWD's expected earnings growth rate for the current year is 4.9%.
Amazon.com is one of the largest e-commerce providers. Amazon, currently, has a Zacks Rank #2 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 18.4% over the past 60 days. AMZN's expected earnings growth rate for the current year is 271.8%.
BuildABear Workshop is the leading and only national company providing a make-your-own stuffed animal interactive retail entertainment experience. BuildABear Workshop, currently, has a Zacks Rank #1 and a Growth Score of A.
The Zacks Consensus Estimate for its current-year earnings has moved up 2.3% over the past 60 days. BBW's expected earnings growth rate for the current year is 16.9%.
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Dell Technologies Inc. (DELL) : Free Stock Analysis Report
Thermo Fisher Scientific Inc. (TMO) : Free Stock Analysis Report
American Woodmark Corporation (AMWD) : Free Stock Analysis Report
Build-A-Bear Workshop, Inc. (BBW) : Free Stock Analysis Report
