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MRC, Sonic, Salesforce.com, Costco and Ulta as Zacks Bull and Bear of the Day

Zacks Equity Research
Markets closed sharply lower on Thursday, as trade was fears between the United States and China once again dented investors??? sentiments.

For Immediate Release         

Chicago, IL – May 29, 2018 – Zacks Equity Research highlights MRC Global MRC as the Bull of the Day and Sonic SONC as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Salesforce.com Inc. CRM, Costco Wholesale Corp. COST and Ulta Beauty Inc. ULTA.

Here is a synopsis of all five stocks:

Bull of the Day:                                              

The inflation talk has grown from non-existent to a murmur recently. Spearheading things over the last few weeks has been the move in crude. Oil has been strong since bottoming out under $28 in February 2016. Prices peaked over $72 earlier this month. That’s creating all sorts of opportunities for stocks to buy within that industry. You can profit from oil infrastructure plays that stand to benefit the most from the rising prices.

Today’s Bull of the Day is Zacks Rank #1 (Strong Buy) MRC Global. MRC Global Inc., through its subsidiaries, distributes pipes, valves, fittings, and related products and services to the energy industry in the United States, Canada, and internationally. The company supplies products across various markets, such as upstream, midstream, and downstream. It offers ball, butterfly, gate, globe, check, diaphragm, needle, and plug valves; and other products, such as lined corrosion resistant piping systems, control valves, valve automation products, and top work components, as well as measurement, steam, and instrumentation products. 

Technically this is a steel stock, a company which makes pipes and tubes. The Steel Pipe and Tube industry ranks in the Top 7% of our Zacks Industry Rank. The reason for the favorable Zacks Rank lies in the recent earnings estimate revisions. Eight analysts have increased their earnings estimates for the current year while nine have done so for next year. The bullish sentiment has pushed up our Zacks Consensus Estimate for the current year from 72 cents to 87 cents. Next year’s number has gone from $1.09 to $1.20.

Bear of the Day:

Today’s Bear of the Day is in the Restaurant Industry. A fast food chain that’s seen earnings estimates tumble recently. You may have seen the commercials and like them, but when you look at what analysts have done to their estimates, you may not want to add this name to your portfolio. I’m talking about Sonic.

Sonic Corp. operates and franchises a chain of quick-service drive-in restaurants in the United States. As of August 31, 2017, the company operated 3,593 Sonic Drive-Ins in 45 states, of which 228 were owned and operated by the company and 3,365 were owned and operated by franchisees. The company also owns and leases 135 properties; and sublease 53 properties to franchisees and other parties.

The company is a Zacks Rank #4 (Sell) right now in an industry that ranks in the Bottom 40% of our Zacks Industry Rank. The reason for the unfavorable rank is the dip in analysts’ earnings estimates over the last sixty days. Analysts have dropped their numbers for both the current year and next year. The bearish activity has cut our Zacks Consensus Estimate from $1.53 to $1.47 for the current year. Next year’s number has dropped from $1.72 to $1.63.

Upcoming Earnings Reports to Watch: CRM, COST, ULTA

It was another interesting week on Wall Street, with early optimism about progress made in ongoing trade talks between the U.S. and China giving way to caution after President Trump cancelled a proposed meeting with North Korean leader Kim Jung Un.

On the earnings side of things, fresh reports from the likes of HP Enterprise, Target and Gap helped mark one of the last busy stretches of the Q1 report season. Results were mixed this week, doing little to help broader indexes break out of the ranges they have been stuck in throughout recent months. Still, a few more marquee reports in the upcoming week have the potential to help that cause.

With that said, investors can always use the Zacks Earnings Calendar to plan out their schedules for earnings, dividend announcements, and other important financial releases. This handy tool is your perfect one-stop-shop to properly prepare for the market events that will have an impact on your own portfolio.

And today, we’ve made that task even easier for you. Using the Earnings Calendar, we looked ahead to next week and selected the biggest reports to watch. Make sure to keep an eye on these companies as they prepare to report during the week of May 28.

1. Salesforce.com Inc.

Enterprise software and cloud computing giant Salesforce is slated to release its latest quarterly report after the market closes on May 29. Shares have moved nearly 10% higher in the past month, and the stock is currently sporting a Zacks Rank #1 (Strong Buy). Still, Salesforce’s margins are thin, and its valuations are stretched—so the pressure will be on the company to deliver great results.

According to our latest Zacks Consensus Estimates, analysts expect Salesforce to report adjusted earnings of $0.46 per share and revenue of $2.94 billion. These results would represent year-over-year growth of 64% and 23%, respectively. Investors should also note that this earnings projection has trended upward over the duration of the quarter.

2. Costco Wholesale Corp.

Big-box retail giant Costco is set to announce its most recent quarterly earnings results after the closing bell on May 31. COST shares have moved 2% higher over the past month and are now sitting near all-time highs, with investors hoping the stock can break even higher on the back of strong results. The stock is carrying a Zacks Rank #3 (Hold) ahead of its report date.

Our latest Zacks Consensus Estimates are calling for Costco to report adjusted earnings of $1.68 per share and revenue of $31.74 billion, which would mark year-over-year growth of 20% and 10%, respectively. Investors might also notice that shares a bit pricey at 28.9x forward 12-month earnings right now.

3. Ulta Beauty Inc.

Cosmetics retailer Ulta is scheduled to release its latest quarterly earnings report after the market closes on May 31. The stock has yet to fully recover since tumbling off its highs last summer, but shares have started to pick up pace, moving more than 30% higher in two months. ULTA is holding a Zacks Rank #2 (Buy) just a few trading periods out from its report date.

Analysts are looking for Ulta to report earnings of $2.48 per share and revenue of $1.52 billion, according to our latest Zacks Consensus Estimates. These results would represent growth of 30% and 16%, respectively, from the year-ago period.

Want more market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!

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Salesforce.com Inc (CRM) : Free Stock Analysis Report
 
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
 
Sonic Corp. (SONC) : Free Stock Analysis Report
 
Ulta Beauty Inc. (ULTA) : Free Stock Analysis Report
 
MRC Global Inc. (MRC) : Free Stock Analysis Report
 
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