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PGT Innovations and Delta Air Lines have been highlighted as Zacks Bull and Bear of the Day

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·9 min read
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For Immediate Release

Chicago, IL – March 17, 2022 – Zacks Equity Research shares PGT Innovations PGTI as the Bull of the Day and Delta Air Lines DAL asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on The Boeing Company BA, Textron Inc. TXT, and Northrop Grumman NOC

Here is a synopsis of all five stocks:

Bull of the Day:

PGT Innovations is a Zacks Rank #2 (Buy) that sports a B for Value and a B for Growth. There are a few tailwinds for this stock as I see it, including trends in home improvement and inflation. Let's explore more about this stock in this Bull Of The Day article.

Description

Grid Dynamics International Inc. engages in architecting and delivering digital transformation programs principally in the retail, technology and financial sectors. Grid Dynamics International Inc., formerly known as ChaSerg Technology Acquisition Corp, is based in Calif., United States.

Earnings History

When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market's expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.

For PTGI, I see a great history of beating the Zacks Consensus Estimate. There are three beats over the last four quarters.

Earnings Estimates Revisions

The Zacks Rank tells us which stocks are seeing earnings estimates move higher. For PTGI, I see annual estimates moving higher.

Over the last 60 days, I see a few increases.

This quarter had increased from $0.34 to $0.37.

Next quarter has moved higher, from $0.33 to $0.44.

The full fiscal year 2022 has moved from $1.41 to $1.67.

Next year has also seen a nice increase from $1.66 to $2.00.

Positive movement in earnings estimates like that is why this stock is a Zacks Rank #1 (Strong Buy).

Inflation And Home Improvement

Inflation has ravaged growth stocks. The stocks that have done well of late are the ones that have a physical product to sell of which they have pricing power over. Window and door companies instituted price increases several times last year and it looks like they will be able to do that again this year as well. That should help defend the EPS from inflation.

The other idea is that over the pandemic, home improvement saw a huge increase in wallet share. Now, with oil soaring and energy prices running rampant home owners are looking more and more for efficiency. The impact doors and windows that PGT makes are perfect for this situation.

Valuation

I see a good valuation with some solid growth. The forward earnings multiple is 12.3x and that is low for a name that posted growth of 37% in the most recent quarter and is expected to show mid 20%'s growth this year. The price to book of 2.3x is going to keep value investors interested in this name. The price to sales is just over 1x which is also good to see.

Bear of the Day:

Delta Air Lines is a Zacks Rank #5 (Strong Sell) despite beating the number in the most recent earnings release. The airlines have had a rough couple of years here with the pandemic and tons of rowdy passengers so I don't want to pile on here. Instead, let's look at why this stock is a Zacks Rank #5 (Strong Sell) and in this Bear of the Day article.

Description

Delta Air Lines is one of the four carriers that controls a majority of the US aviation market (the carriers account for more than 60% of the domestic market share). This development followed a spate of mergers in the industry during the early part of this century.

Earnings History

When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market's expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.

In the case of DAL, I see three straight beats of the  Zacks Consensus Estimate. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn't make it a Zacks Rank #5 (Strong Sell) either.

The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.

Earnings Estimates

The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For DAL I see annual estimates moving lower.

The Zacks Rank is more heavily influenced by the move in the annual numbers, and the movement is mixed for those numbers.

The current year 2022 consensus number has dropped from $2.28 to $1.93.

The next year has dropped from $5.79 to $5.67 over the last 60 days.

Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).

It should be noted that a majority of stocks in the Zacks universe are seeing positive earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).

Additional content:

B  ell-Boeing Clinches Contract to Support V-22 Jet Program

Bell-Boeing, a joint venture (JV) between The Boeing Company and Bell Helicopter — a unit of Textron Inc. — recently secured a contract involving the V-22 aircraft. The deal was awarded by Naval Air Systems Command, Patuxent River, MD.

Details of the Deal

Valued at $24.8 million, the contract is projected to be completed by March 2023. Per the terms of the deal, Bell-Boeing will offer continued flight test support for the V-22 aircraft.

The majority of the task associated with this contract will be executed in Patuxent River, MD.

Growing Jet Demand & V-22 Jets

A rapid increase in terror attacks has compelled nations to strengthen their arsenal and bump up defense budget. With the United States being the largest exporter of defense equipment across the world, there is a steady flow of contracts for its combat-proven weaponry from both the Pentagon and its foreign allies. With military jets and helicopters constituting a major portion of a nation's armaments, there is a steady flow of contracts for these.

Bell-Boeing's primary product, V-22 Osprey is a family of multi-mission, tilt rotor military aircraft with both vertical as well as short take off and landing capabilities. It is designed to combine the functionality of a conventional helicopter with the long-range, high-speed cruise performance of a turboprop aircraft. Notably, the CV-22 is a variant of the V-22 family of jets and helps conduct long-range infiltration, exfiltration and resupply missions for special operations forces.

Considering these features of the aforementioned family of tiltrotors and the growing demand for military aircraft, V-22 and its variants enjoy decent demand across the globe. The latest deal win is a bright example of that.

Jet Manufacturers' Prospects

Per a forecast made by Mordor Intelligence, the global military aircraft market is likely to register a CAGR of more than 4% during the 2022-2031 period. This surely is going to benefit major U.S. combat aircraft manufacturers like Bell-Boeing and Northrop Grumman, with North America dominating this market space.

Northrop is a renowned manufacturer of autonomous and manned aircraft like MQ-4C Triton and Global Hawk. These jets are used for battle management, strike and intelligence, surveillance and reconnaissance (ISR).

Notably, Northrop boasts a long-term earnings growth rate of 6.2%. In the past year, the stock has gained 46.4%.

Price Movement & Zacks Rank

Boeing's shares have lost 29.5% in the past year. Textron's stock has gained 33.2% in the past year against theindustry's decline of 34.6%.

Both Boeing and Textron currently carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

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The Boeing Company (BA) : Free Stock Analysis Report
 
Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
 
Textron Inc. (TXT) : Free Stock Analysis Report
 
Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
 
PGT, Inc. (PGTI) : Free Stock Analysis Report
 
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