Kanzhun and Delta Air Lines have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – October 10, 2023 – Zacks Equity Research shares Kanzhun Limited BZ as the Bull of the Day and Delta Air Lines DAL as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Chevron Corporation CVX, Granite Ridge Resources, Inc. GRNT and Viper Energy Partners VNOM.
Here is a synopsis of all five stocks:
Bull of the Day:
A few short quarters ago, a Chinese internet stock was just about the worst place you could have invested any money. Tensions with the US, along with rule changes in Chinese government, made it a very scary place to have any money. But things change in the market and those same stocks which were to be avoided at all costs are looking a bit more attractive. The earnings trends have strengthened and with the risk-on behavior re-entering the market, these stocks could be the next big thing.
Today's Bull of the Day is one of these stocks. It's Zacks Rank #1 (Strong Buy) Kanzhun Limited. Kanzhun is a company based in China specializing in online recruitment solutions. The company operates under the BOSS Zhipin brand name through which it offers recruitment services via a mobile application. This platform facilitates the recruitment process between job seekers and employers catering to enterprises and corporations.
Growth is the name of the game here with solid growth forecast for both earnings and revenues over the next year plus. Current year revenue growth is set to come in at 18.45% this year and 26.57% next year. Translated over to the earnings side of the equation, analysts are calling for 96% growth this year and 28.57% next year.
Our Zacks Consensus Estimate for both the current year and next year have been moving up over the last sixty days. We have seen this year's number tick up from 46 cents EPS to 49 cents with next year's number from 62 cents to 63.
The growth is coming from enterprise customers as well as monthly active users. For the second quarter of 2023, average monthly average users was up from 26.5 million a year ago to 43.6 million this year. That's an increase of 65.4% year-over-year. On the enterprise side, total paid enterprise customers is up 18.4% from 3.5 million in the twelve months ended June 30, 2022 to 4.5 million in the twelve months ended June 30, 2023.
Bear of the Day:
Airlines were already facing several...wait for it...headwinds in the market. (UGH!) The largest being oil prices. As OPEC production cuts restrict supply, prices have been on the rise. With that huge cost dragging on profits, earnings estimates have suffered along with stock prices. Today's Bear of the Day is one of these stocks. It's Zacks Rank #5 (Strong Sell) Delta Air Lines.
I'm sure all of you know of Delta Air Lines, and most of you have flown the air lines once or twice. Delta is one of the major airlines of the United States and a legacy carrier, recognized as one of the world's oldest airlines still in operation. Delta is one of the world's largest airlines by traffic and revenues, serving over 800 destinations in about 130 countries through its regional carriers. It operates a mainline fleet of 1,200 aircraft and also engages in maintenance, repair, and overhaul (MRO) operations as well as cargo services.
The reason for the unfavorable rank is the recent negative earnings estimate revisions coming from analysts. Over the last thirty days, ten analysts have cut their estimates for the current year, while eight have done so for next year. Even over the last week, five analysts have cut for the current year and three for next year.
The bearish moves have slashed the Zacks Consensus Estimates. Current year numbers are off from $6.52 to $6.04 for the current year and down from $7.52 to $6.92 for next year.
The Transportation – Airline industry ranks in the Bottom 10% of our Zacks Industry Rank.
Additional content:
3 Oil Stocks Worth a Watch This October
Oil stocks saw robust gains amid the bear market of 2022. While inflation took a toll on consumer outlays, it helped the price of crude oil scale upward.
It's been, however, a different story this year. For most of 2023, crude oil prices have fallen, especially last week when prices recorded their largest weekly drop since March.
A higher interest rate environment, and subsequently its impact on global oil demand resulted in a decline in the price of crude oil (read more: Fed Anticipates Higher Rates for Longer: 5 Big Winners).
But recently crude prices reversed last week's downward trend and moved northward amid Middle East tensions that raised concerns about the outlook for crude supply.
Late Sunday, oil futures opened strongly, with the West Texas Intermediate (WTI) crude for November delivery increasing 4.4% to $86.39 a barrel, while the December Brent crude was up 3.2% at $88.11 a barrel, citing a MarketWatch article.
Hamas, the Palestinian militant group, backed by Iran, attacked Israel early Saturday, resulting in many casualties. Israel retaliated and pounded Gaza.
But it's the Iranian government's involvement in the conflict, which is bearing upon the oil market. After all, the United States is now widely expected to implement sanctions on Iran's oil exports leading to a global demand-supply disparity.
Earlier, major oil producers including Russia and Saudia Arabia had already decided to curb the production of oil by a combined 1.3 million barrels per day (bpd) till the end of 2023.
On the other hand, the Organization of the Petroleum Exporting Countries expects the demand for oil across the globe to stay vigorous. This rise in demand amid tighter supply conditions will surely push oil prices even higher worldwide.
The increase in oil prices should bode well for oil majors like Chevron Corporation. The company's CEO recently predicted oil prices to jump to $100 a barrel this year.
The rise in oil prices will help improve the company's financial performance in the fourth quarter, and increase cash flow that can help Chevron increase its investments in renewables research.
The Zacks Consensus Estimate for its current-year earnings has moved up 3.3% over the past 60 days. The company's expected earnings growth rate for next year is 10.7%. Its shares have gained 33.5% over the past five-year period. CVX, presently, has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 (Strong Buy) Rank stocks here.
Meanwhile, oil exploration and production companies such as Granite Ridge Resources, Inc. and Viper Energy Partners are well-poised to see their profit margins improve amid the oil price rally.
The Zacks Consensus Estimate for GRNT's current-year earnings has moved up 15.7% over the past 60 days. The company's expected earnings growth rate for next year is 11.5%. GRNT presently has a Zacks Rank #1.
Similarly, the Zacks Consensus Estimate for VNOM's current-year earnings has moved up 31.9% over the past 60 days. The company's expected earnings growth rate for the next quarter is 57.1%. VNOM presently has a Zacks Rank #2 (Buy).
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Chevron Corporation (CVX) : Free Stock Analysis Report
Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
KANZHUN LIMITED Sponsored ADR (BZ) : Free Stock Analysis Report
Viper Energy Partners LP (VNOM) : Free Stock Analysis Report
Granite Ridge Resources, Inc. (GRNT) : Free Stock Analysis Report
