For Immediate Release
Chicago, IL – July 30, 2020 – Zacks Equity Research highlights JD.com JD as the Bull of the Day and The TJX Companies, Inc. TJX as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Equinox Gold EQX, Gold Fields Limited GFI and Coeur Mining CDE.
Here is a synopsis of all five stocks:
Bull of the Day:
JD.com is a Chinese e-commerce firm that has diversified into new areas and seen its stock price outclimb local rival Alibaba and Amazon over the last two years.
The company is poised to expand and benefit from the ongoing expansion of digital commerce in the world’s second-largest economy. And JD has cooled off a bit recently, which might set up a more attractive buying opportunity.
Way Beyond E-Commerce
JD.com sells everything from smartphones and computers to clothing and food. The company also operates travel services, sells industrial products, and much more. JD might best be described as a mixture of Costco, Amazon and Alibaba all rolled into one.
JD is one of the country’s biggest Internet companies by revenue, which is no easy task, and is one of its largest overall retailers. This means its offerings extend far beyond traditional e-commerce. JD runs successful logistics and fulfillment businesses and it offers a variety of other services, which includes consumer targeting, marketing, analytics, financing, and more.
JD also has a budding healthcare division that features pharmaceutical and healthcare products and services. The company currently offers online medical and psychological consultations, healthcare management services, and has Covid-19 focused services.
Like Amazon, JD aims to touch nearly every aspect of life in China. And investors should remember that the growing Chinese middle-class should help the firm grow for years to come.
McKinsey estimates that China’s middle class could hit 550 million by 2022, which is far larger than the entire U.S. population of roughly 330 million. “We are also pleased to see an accelerating increase in user engagement, demonstrating our strengthened brand image and expanded consumer mindshare… We will continue to invest in technology and customer experience to support our future growth,” CFO Sidney Huang said in Q1 remarks.
The company closed the first quarter with over 387 million annual active customers, up 25%, while its mobile daily active users surged by 46%. The firm, like many retailers around the world such as Walmart, benefited from the coronavirus-induced stay-at-home push, with Q1 revenue up 21%, driven by 38% climb in general merchandise products.
It’s also worth pointing out that Tencent and Walmart are some of JD’s more notable investors. The company also went public in Hong Kong in mid-June, as more Chinese firms, including NetEase and Alibaba, have started to secure a secondary listing closer to home—which comes as tensions grow between the U.S. and China.
JD hit the Nasdaq in 2014 and is up over 200% since then. The stock saw initial success, but it really started to take off in the fourth quarter of 2018 and is now up 200% since January 2019, which crushed AMZN’s 100% run and BABA’s 85% climb during this stretch.
JD shares are up 80% in 2020. Investors might also find the roughly $63 per share price rather appealing. The stock also rests about 8% off its recent highs, with it tentatively expected to report its Q2 results on August 11.
JD has also consistently traded at a big discount against the e-commerce market at 0.8X forward 12-month sales vs. 4.6X and its peer group’s 3.7X—this group includes eBay, BABA, Amazon and others.
Our Zacks estimates call for JD’s second quarter revenue to jump 24%, with Q3 expected to come in 26.5% higher. These would both mark stronger growth than the first quarter. Its overall full-year 2020 revenue is projected to jump 22% higher, with FY21 expected to come in 19.3% stronger.
JD’s adjusted Q2 earnings are projected to pop 18% from the year-ago period to come in at $0.39 per share. Peeking further ahead, its adjusted fiscal 2020 EPS figure is projected to climb 20% to $1.25 per share, with FY21 set to jump another 60%.
All of these bottom-line expansion estimates would stand in impressive contrast to the broader earnings hit that the S&P 500 is expected to take this year. The nearby chart also showcases JD’s strong earnings revisions activity, with FY20 up 76% over the last 90 days.
JD’s positive earnings revision activity helps it earn a Zacks Rank #1 (Strong Buy) right now, alongside its “B” grade for Value in our Style Scores system.
Investors might want to take a chance on this Chinese tech-focused retailer that’s got Amazon-style expansion on the mind, but comes at a far cheaper price point and a more enticing valuation.
Bear of the Day:
The TJX Companies, Inc. was one of the many victims of non-essential status during the early days of the coronavirus. The off-price retail powerhouse’s near-term outlook appears rough and its stock price has lagged the broader retail space in 2020.
TJX is an off-price apparel and home décor retailer that runs roughly 4,500 stores in nine countries, including the U.S., Canada, the UK, and Germany. The company operates under T.J. Maxx, Marshalls, and HomeGoods, as well as the much smaller Sierra and Homesense brands. The company had found success in both in-store retail and through the expansion of its digital and e-commerce offerings.
TJX has carved out a strong niche within a rapidly evolving traditional retail landscape that has seen the likes of Kohl's, Macy’s and Nordstrom all struggle and be largely discarded by Wall Street over the last five years or so. In fact, TJX shares had outclimbed its industry and outshined its rivals over the last three years. But the coronavirus put a major dent in its near-term success.
TJX’s stores were temporarily closed for “approximately half of the quarter” due to the coronavirus pandemic. This saw it post an adjusted loss of -$0.74 per share, which came in far worse than our estimates. Meanwhile, its quarterly sales plummeted 52%.
TJX didn’t provide full-year guidance last quarter, like many other firms throughout various sectors. And in an effort to conserve cash, the company said in its May 21 earnings release that it “decided not to declare a dividend for the first quarter of Fiscal 2021, and at this time, does not expect to declare a dividend in the second quarter of Fiscal 2021.”
Executives said they expected to return to making regular dividend payments soon. But the continued spread of the coronavirus makes the situation unclear and increasingly more difficult for management and investors.
Moving on, our current Zacks estimates call for TJX’s second quarter fiscal 2021 revenue to fall 30.3%, with its adjusted earnings expected to tumble from +$0.62 a share in the year-ago period to a loss of -$0.09 per share. Luckily, the company is expected to see things start to turn around in the second half of 2020 as the economy slowly begins to return to something close to normal.
TJX is currently a Zacks Rank #5 (Strong Sell) that holds a “D” grade for Value and an “F” for Growth in our Style Scores system. The stock is also part of the Retail - Discount Stores space that sits in the bottom 30% of our more than 250 Zacks industries.
3 Cheap Gold & Silver Stocks to Buy Right Now
Stocks slipped in morning trading Tuesday, as one of the biggest weeks for corporate earnings heats up. Shares of 3M, Mcdonald's and Raytheon all slid after they posted earnings, while Pfizer popped.
Wall Street now awaits reports from other economic bellwethers such as Boeing, Visa, and Procter & Gamble. And, of course, most eyes will be focused on Apple, Amazon, Facebook and Google parent Alphabet on Thursday.
There has been a slowdown in the broader market and tech in the last month, and many are calling for a tech pullback similar to what Microsoft experienced last week. It will be hard to live up to the hype and many investors might use earnings as a chance to take profits.
Meanwhile, as tech continues to hog much of the spotlight, gold prices hit another record Monday. The precious metal is now up 27% in 2020 and the recent surge comes as economic reopenings slow and tensions between the U.S. and China mount. Silver prices have also surged, and the U.S. dollar hit two-year lows because investors see interest rates remaining low and the coronavirus continuing to hamper growth.
Goldman Sachs recently raised its 12-month forecast from $2,000 an ounce for gold to $2,300—it sits at around $1,949 right now—citing concerns about the U.S. dollar’s role as the global reserve currency status. “Gold is the currency of last resort, particularly in an environment like the current one where governments are debasing their fiat currencies and pushing real interest rates to all-time lows,” Goldman strategists wrote.
With this in mind, it might be time for investors to take advantage of rising gold and silver prices. Let’s dive into three such stocks trading under $20 per share that could be enticing…
Prior Close: $12.13 USD
Equinox Gold is a mining company that’s producing gold from six mines right now and is expanding. The Canadian firm has said it’s “rapidly advancing toward its vision of producing one million ounces of gold annually.”
EQX topped our bottom-line estimate last quarter and its revenue soared from $35.4 million in the year-ago period to $130 million. CEO Christian Milau also noted that its $350 million of cash on hand helps put the firm “in a strong financial position and fully funded for its organic growth plans.”
EQX shares have surged 56% in 2020 to crush the S&P 500’s sideways movement and its industry’s 21%. Our current Zacks estimates call for Equinox’s adjusted fiscal 2020 earnings to soar 255% to $1.03 per share, on the back of 184% sales growth that would see it reach $800.2 million.
EQX is expected to follow up this growth with another 76% revenue expansion in FY21 and 31% stronger earnings. Equinox’s earnings revisions have soared recently to help it earn a Zacks Rank #2 (Buy), alongside its “B” Grade for Growth and “A” for Momentum in our Style Scores system.
Gold Fields Limited
Prior Close: $13.47 USD
Gold Fields is a gold producer that has nine operating mines spread across Australia, Peru, South Africa, West Africa, and Chile. The firm, which is listed on the Johannesburg Stock Exchange, with American depositary shares on the NYSE, hopes to be a “global leader in sustainable gold mining.”
The gold miner’s shares have jumped 100% in 2020 and 75% since mid-June. This is part of a larger run that’s seen GFI surge 265% in the past 24 months from under $3 a share to its current price.
Gold Fields is a Zacks Rank #2 (Buy) right now, supported by its impressive longer-term earnings revisions. GFI sports an overall “A” VGM score and is part of the highly ranked Mining – Gold industry. And Gold Fields’ dividend yield roughly matches the 10-year U.S. Treasury note.
On top of that, its adjusted earnings are projected to climb by 36% in FY20 and another 134% in FY21, while its revenue is expected to jump 41% and 13.4%, respectively.
Prior Close: $8.24 USD
Coeur Mining is a precious metals producer that has five operations in North America, which features a mixture of gold and silver, as well as zinc and lead. CDE stock has rallied 225% since mid-March and 75% in the last month, as silver prices surge.
In addition to being a haven investment, silver has industrial uses that include photovoltaic cells for solar energy. Despite its recent run of success, Coeur still rests well below the $15 a share it traded at in 2016, and it jumped to a new 52-week high on Tuesday.
CDE is set to report its Q2 results after the market closes on Wednesday, July 29. The firm’s quarterly sales are expected to slip 4.5% from the year-ago period, while its adjusted loss is expected to shrink. Peeking further ahead, however, its Q3 sales are projected to jump 19%.
Plus, its fiscal 2020 revenue is projected to climb 10%, with FY21 expected to come in 23% higher and hit $959.5 million. Meanwhile, it is expected to swing from an adjusted loss of -$0.25 a share +$0.20 per share in fiscal 2020, with its FY21 EPS figure projected to soar all the way to +$0.56 a share.
CDE is part of the Mining - Non Ferrous industry that rests in the top 11% of our more than 250 Zacks industries. Coeur is also a Zacks Rank #2 (Buy) that rocks an “A” grade for Momentum and a “B” for Growth.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>
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