Honda Motor and Cracker Barrel have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – January 24, 2024 – Zacks Equity Research shares Honda Motor Co. HMC as the Bull of the Day and Cracker Barrel Old Country Store CBRL as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Ford F, Volvo VLVLY and Bridgestone Corp. BRDCY.
Here is a synopsis of all five stocks.
Bull of the Day:
Honda Motor Co. is a leading manufacturer of automobiles and motorcycles, recognized internationally for its wide variety of products that range from small general-purpose engines to specialty sports cars.
The stock is currently a Zacks Rank #1 (Strong Buy), with analysts raising their outlooks across all timeframes.
In addition, the company is part of the Zacks Automotive – Foreign industry, currently ranked in the top 25% of all Zacks industries. Aside from the improved earnings outlook and favorable industry standing, let’s take a closer look at a few other aspects of the company.
Honda Motor
Honda Motor shares have shown solid relative strength over the last month, tacking on nearly 6% and outperforming the S&P 500 handily. Shares are looking to break out of a multi-year consolidation period, with positive earnings estimate revisions helping drive the move.
Investors also stand to reap a steady income from HMC shares, currently yielding a solid 2.8% annually paired with a sustainable payout ratio sitting at 21% of the company’s earnings. The payout has also grown nicely, with HMC sporting a 3.3% five-year annualized dividend growth rate.
Shares aren’t expensive given the company’s forecasted growth, with earnings forecasted to recover 35% in its current fiscal year on nearly 15% higher sales. Shares presently trade at a 7.9X forward earnings multiple, comparing favorably to the respective Zacks industry average of 8.9X.
The stock carries a Style Score of ‘A’ for Value.
Keep an eye out for the company’s next quarterly release scheduled for February 9th, as the Zacks Consensus EPS Estimate of $0.85 has been revised more than 20% higher since last November. Analysts have also been bullish regarding the top line, with the $37.7 billion quarterly revenue estimate 11% higher over the same timeframe.
Earnings are forecasted to decline 16% from the year-ago period, with revenue suggested to climb nearly 20% year-over-year.
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.
Honda Motor Company would be an excellent stock for investors to consider, as displayed by its Zack Rank #1 (Strong Buy).
Bear of the Day:
Cracker Barrel Old Country Store owns and operates full-service dining locations with a restaurant and a retail store in the same unit. Analysts have taken a bearish stance on the company’s outlook, pushing it down into an unfavorable Zacks Rank #5 (Strong Sell).
Let’s take a closer look at the company.
Cracker Barrel
CBRL shares haven’t fared well over the last year, down 23% and widely underperforming relative to the general market. Shares moved lower following several of the quarterly prints in 2023 but have appeared to stabilize following its latest release.
While the recent price action is inspiring, the company’s pressured outlook certainly can’t be ignored.
The adverse price action has bumped up CBRL’s annual dividend yield, currently paying a sizable 6.9% annually. Still, the company’s 104% payout ratio remains a concern, reflecting that it’s paying more out to shareholders than earnings generated.
The company has primarily posted mixed earnings results as of late, falling short of the Zacks Consensus EPS Estimate by an average of -7% across its last four releases. Top line results have also been under pressure, with CBRL missing consensus revenue expectations in three consecutive releases.
Bottom Line
Negative earnings estimate revisions from analysts and mixed quarterly results paint a challenging picture for the company’s shares in the near term.
Cracker Barrel Old Country Store 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:
Ford (F) to Reduce F-150 Lightning EV Production
Ford will cut one of the two production shifts at its Rouge Electric Vehicle Center in Michigan that builds the all-electric F-150 Lightning. The company intends to match customer demand by lowering production. The announcement came amid slower-than-expected customer demand for electric vehicles (“EVs”).
The U.S. legacy automaker has been manufacturing the F-150 Lightning since April 2022. In 2023, the company sold 24,000 F-150 Lightning units. This represented a small fraction of Ford's overall F-series pickup sales, which exceeded 750,000 units.
Sales of F-150 Lightning increased 55% year over year in 2023. While the company expects further growth in the model’s sales this year, reportedly, it is not likely to reach the 150,000-production rate targeted during the plant's upgrade last year.
Although the F-150 Lightning is eligible for $7,500 in federal EV tax credits, the price of the vehicle is still higher than the $34,000 base price of the gas-powered truck. Ford has changed the price of Lightning several times since 2022.
The decrease in production of the F-150 Lightning will impact 1,400 workers. Half of these workers will be transferred to the Michigan Assembly Plant, where Ford will increase the production of gasoline-powered Ford Bronco and Ranger models. Other workers will be shifted to nearby plants or are expected to avail of the “Special Retirement Incentive Program” as per the 2023 Ford-United Auto Workers agreement.
Last year, Bronco and Ranger sales went down 9.7% and 43.3%, respectively. The factory that manufactures both vehicles was affected by a six-week United Automobile Workers strike. The company will add a third shift to its Michigan Assembly Plant this summer to increase the production of Bronco and Ranger. It will add 900 jobs to this plant.
Zacks Rank & Key Picks
F currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the auto space are Volvo and Bridgestone Corp., which both sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for VLVLY’s 2023 sales and earnings suggests year-over-year growth of 4.2% and 73.1%, respectively. The EPS estimates for 2023 and 2024 have improved by 4 cents and 3 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for BRDCY’s 2023 earnings implies year-over-year growth of 5.3%. The EPS estimate for 2024 has moved up by 8 cents in the past 60 days.
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Ford Motor Company (F) : Free Stock Analysis Report
Cracker Barrel Old Country Store, Inc. (CBRL) : Free Stock Analysis Report
Honda Motor Co., Ltd. (HMC) : Free Stock Analysis Report
Bridgestone Corp. (BRDCY) : Free Stock Analysis Report
AB Volvo (VLVLY) : Free Stock Analysis Report
