For Immediate Release
Chicago, IL –July 20, 2017 –Zacks Equity Research highlightsG-III Apparel Group Ltd. (NASDAQ: GIII – Free Report) as the Bull of the Day Group 1 Automotive, Inc. (NYSE: GPI – Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on First Solar (NASDAQ: FSLR – Free Report), Jinko Solar (NYSE: JKS – Free Report) and Canadian Solar (NASDAQ: CSIQ – Free Report).
Here is a synopsis of all five stocks:
Bull of the Day :
G-III Apparel Group Ltd . (NASDAQ: GIII – Free Report) has taken it on the chin as apparel sales have slumped industry wide and investors worried about department stores. But this Zacks Rank #1 (Strong Buy) could be on the verge of seeing things turn around.
G-III Apparel owns and distributes apparel and accessories under some of the most iconic brands in the fashion industry including Donna Karan, DKNY, Vilebrequin, Bass, Weejuns, Eliza J and Jessica Howard.
It has licenses with other well-known brands including Calvin Klein, Tommy Hilfiger, Karl Lagerfeld, Kenneth Cole, Jones New York, Jessica Simpson and others.
It addition to its wholesale business it operates retail stores under the Donna Karan, Wilsons Leather, Bass, G.H. Bass & Co., Vilebrequin and Calvin Klein Performance names.
Is the Worst Over?
G-III Apparel has struggled as department store and outlet mall sales have dropped.
But on June 6, it reported fiscal first quarter results and beat the Zacks Consensus by 19 cents. It reported a loss of $0.18 versus the consensus of a loss of $0.37.
Net sales rose 16% to $529 million compared to $457.4 million in the year ago quarter. It saw some additional costs due to the acquisition of Donna Karan International, which closed on Dec 1, 2016.
The wholesale business continues to be strong with sales up in the double digits. However, it's own retail brands which includes Wilson's Leather and the Bass stores, continued to see negative comps.
As a result, it announced it was closing and repurposing some stores.
It's also in the middle of rolling out new Donna Karan and DKNY merchandise.
G-III Apparel is optimistic about the next few years with those brands. The Donna Karan brand could, eventually, be one of its largest.
In fiscal 2017, G-III Apparel earned $1.42 but is only expected to earn $1.27 this year. That's a drop of about 10%.
But the analysts have been revising their estimates higher in the last 60 days. The Zacks Consensus has risen to $1.27 from $1.01 in that time.
The rebound is expected to continue next year as earnings are expected to rise to $1.72.
Group 1 Automotive, Inc. (NYSE: GPI – Free Report) is in a tough industry in autos. This Zacks Rank #5 (Strong Sell) is expected to see a decline in earnings this year.
Group 1 Automotive operates 171 auto dealerships, 224 franchises and 47 collision centers in the US, the United Kingdom and Brazil. It sells 32 brands of autos, light trucks and new and used cars.
Still Expanding in the UK
On July 5, Group 1 announced it would acquire the Beadles Group, which has 7 brands, including Jaguar, Land Rover, Volkswagen, Skoda, Toyota, Vauxhall and Kia, across 12 dealerships in the southeastern part of greater London.
They are expected to generate $330 million in annual revenues.
With this acquisition, Group 1 will have 43 UK dealerships.
The Beadles Group has been in business since 1893 so Group 1 is getting an established brand with a reputation for customer service.
With its 43 dealerships, Group 1 expects to be generating over $2 billion in revenue from the UK.
Estimates Being Cut
Even with this latest acquisition, the analysts are still bearish.
In the United States, auto sales are on the decline for the first time in 8 years as it appears "peak auto" is a real thing.
Group 1 is expected to announce its second quarter results next week, on July 27.
But one analyst isn't even waiting for that. 1 estimate for the full year has been cut in the last 7 days which has pushed the 2017 Zacks Consensus Estimate to $7.26 from $7.78 in the last 90 days.
That's an earnings decline of 2.1% as Group 1 made $7.42 last year.
Analysts are loathe to cut estimates just ahead of an earnings report because they don't want to get it wrong. They usually only do it if they have some conviction that they are too optimistic about the quarter.
Shares in Bear Territory
Shares of Group 1 have plunged about 20% year-to-date which puts them in bear market territory.
Solar Stocks Climbing as Global Investments Soar
Shares of First Solar (NASDAQ: FSLR – Free Report) are up on Wednesday after a strong analyst upgrade and a string of other positive solar-related news that has emerged over the past week.
Axiom Capital analyst Gordon Johnson, a notable solar industry bear , upgraded First Solar from a “Hold” to a “Buy” and upped its price target to $51 per share on Wednesday. “Given that we believe First Solar is selling modules at $.50 to $.60, and we are hearing rumblings that they are sold out through the third quarter of 2018,” Johnson told Benzinga .
“We believe the company is going to show potentially significant upside to consensus estimates, which have not changed dramatically.”
On the back of this upgrade, First Solar jumped 3.5% in morning trading. The solar energy company hasn’t quite reached its 52-week high, but it is now rests at its highest point so far this year. First Solar is a Zacks Rank #2 (Buy)
The company, which builds large-scale photovoltaic (PV) power stations, is set to report earnings on August 2.
Elsewhere in the solar industry, China invested heavily in solar energy last year and is set to continue this trend going forward. The country installed 34.5 GW of solar power in 2016, and China reportedly added 18 GW of additional solar energy in the second quarter of this year alone.
On that note, Jinko Solar (NYSE: JKS – Free Report ) is one of the biggest solar energy movers so far today, up 9.13%.
Negative estimate revisions have sent the stock down to a Zack Rank #5 (Strong Sell), but fresh activity in China could spur new momentum, with shares of Jinko Solar skyrocketing this month.
All of this solar investment has helped China become the biggest renewable energy investor on the planet. According to a recent Time report , which focused on a massive former Chinese coal mine that is now a lake with 166,000 floating solar panels, the Chinese government has set its sights on spending $360 billion on clean energy by 2020. The push will reportedly help create 13 million new jobs.
Other Asian powerhouses are getting in on the action too. For example, India just announced it is set to debut its first ever solar-powered train, which will reportedly save roughly 21,000 liters of diesel fuel every year.
However, what might prove to be better news for investors in the States is that the U.S. has also invested heavily in this sector.
In the U.S., 14.6 gigawatts worth of new solar energy projects were installed last year, which proved to be a record setting year — and a massive jump from the 7.5 GW installed in 2015.
Today, in Miami, Florida it was announced that in South Miami new homes will soon be required to be built with solar panels — the first such mandate in the state. The ordinance will also affect select home renovations as well.
“Solar reduces the cost of home ownership, it makes houses sell faster, it returns more to a builder, it makes local jobs, and most importantly, it reduces carbon emissions today to help our children and grandchildren have a better future tomorrow,” South Miami Mayor Philip Stoddard, said on Tuesday night .
Canadian Solar (NASDAQ: CSIQ – Free Report ) just announced that four solar power plants in Japan are now using its high-efficient MaxPower modules to power the plants. Shares of the company jumped 6.27% on Wednesday after the news broke.
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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Group 1 Automotive, Inc. (GPI) : Free Stock Analysis Report
G-III Apparel Group, LTD. (GIII) : Free Stock Analysis Report
First Solar, Inc. (FSLR) : Free Stock Analysis Report
JinkoSolar Holding Company Limited (JKS) : Free Stock Analysis Report
Canadian Solar Inc. (CSIQ) : Free Stock Analysis Report
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