The Progressive and Take-Two Interactive Software have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – March 27, 2024 – Zacks Equity Research shares The Progressive Corp. PGR as the Bull of the Day and Take-Two Interactive Software TTWO as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Carnival CCL.
Here is a synopsis of all three stocks:
Bull of the Day:
Bull of the Day: The Progressive Corp.
The Progressive Corp, a current Zacks Rank #1 (Strong Buy), is a massive American insurance company. Analysts have taken their earnings expectations higher across the board.
In addition to favorable earnings estimate revisions, the company resides within the Zacks Insurance – Property & Casualty industry, currently ranked in the top 11% of all Zacks industries. Let’s take a deeper look at the company.
Progressive
It’s worth noting that Progressive shares have been monster performers in general over the last decade, delivering a remarkable 27% annualized return vs. the S&P 500’s 13.4%. Shares saw buying pressure following its latest set of quarterly results, with investors pleased with the release.
Concerning the above-mentioned quarter, PGR exceeded the Zacks Consensus EPS estimate by 24% and posted a 3% revenue beat, reflecting growth rates of 97% and 23%, respectively. The company’s top line performance has been strong, with revenues enjoying a recent acceleration.
The stock remains a prime consideration for growth-focused investors, with consensus expectations for its current fiscal year (FY24) suggesting 60% earnings growth on 15% higher sales. Peeking ahead to FY25, expectations currently allude to an additional 12.5% growth in earnings on nearly 13% higher sales.
Keep an eye out for the company’s upcoming quarterly release expected on April 11th, as current consensus expectations allude to a 350% pop in earnings on 16% improved sales. Top line revisions have remained positive, with the $16.5 billion expected up modestly since January.
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.
The Progressive Corp. would be an excellent stock for investors to consider, as displayed by its Zack Rank #1 (Strong Buy).
Bear of the Day:
Bear of the Day: Take-Two Interactive Software
Take-Two Interactive Software is a leading developer and publisher of video games. Analysts have taken a bearish stance on the company’s outlook, landing the stock into an unfavorable Zacks Rank #5 (Strong Sell).
In addition, the company currently resides in the Zacks Toys – Games – Hobbies industry, which is currently ranked in the bottom 32% of all Zacks industries. Let’s take a closer look at a few other aspects of the company.
Take-Two Interactive
TTWO shares have faced a bumpy road so far in 2024, down nearly 9% and widely underperforming relative to the S&P 500’s nearly 10% gain. Shares plunged following its latest set of quarterly results, facing regular selling pressure since.
Concerning the above-mentioned release, TTWO fell short of the Zacks Consensus EPS estimate by roughly 1.4% and posted sales just a hair below expectations, reflecting declines of -41% and -3%, respectively. The company lowered FY24 guidance due to softness in mobile advertising and NBA 2K24, explaining the adverse reaction and negative earnings estimate revisions that followed post-earnings.
Nonetheless, it’s worth mentioning that the company’s video game pipeline remains bright, particularly when considering the launch of GTA VI expected in 2025. The franchise is an absolute monster in terms of sales, and that’s reflected by the company’s expected earnings growth rate of +160% for its FY25.
Bottom Line
Analysts' negative earnings estimate revisions, resulting from lowered guidance, paint a challenging picture for the company’s shares in the near term.
Take-Two Interactive Software 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 and the potential to deliver explosive gains in the near term.
Additional content:
Markets Look to Close Q1 Strong: Stocks to Watch
Stocks were moving higher in the early going on Tuesday, extending their recent rally amid the final trading week of the first quarter. It’s been a historic start to 2024, with U.S. markets propelled by a resilient economy and a bullish artificial intelligence theme. As markets are closed for Good Friday, just three sessions remain this week.
The S&P 500 is off to its 15th best start dating back to 1928; the index is up just shy of 10% year-to-date, as is the Nasdaq. The communication services and information technology sectors resumed their lead from 2023 and have advanced 16% and 13% year-to-date, respectively.
The major U.S. indices have displayed little in the way of volatility this year. The volatility (VIX) index continues to hover in the low teens; periods of low volatility are inevitably followed by periods of high volatility, but volatility can remain subdued for extended timeframes in strong bull markets.
On a similar token, investor sentiment remains bullish here, but sentiment can also continue to get even more optimistic before it reaches a truly euphoric level. Markets applauded the Fed’s confirmation last week of three upcoming rate cuts, bolstering investors’ appetite for risk. The central bank also issued more bullish forecasts on the economy including bumps in GDP numbers.
Chicago Fed President Austan Goolsbee stated on Monday that three rate cuts this year are “in line with my thinking.” He added that the underlying trend lower in inflation hasn’t changed despite slightly hotter readings over the past few months.
Trump Media & Technology Begins Trading
The company behind former President Trump’s social media platform, Trump Media & Technology Group, started trading on the Nasdaq Tuesday morning following an announcement of the merger completion with blank check company Digital World Acquisition. The company will trade under the ticker symbol “DJT”, which stands for the former President’s initials.
Trump remains heavily involved in ongoing and high-profile litigation, racking up hundreds of millions of dollars in legal expenses and penalties. The former President could potentially net a more than $4 billion paper windfall in shares from the merger based on current pricing.
DJT stock soared in the first minutes of its Nasdaq debut, triggering a brief trading halt on volatility. Shares jumped more than 40% on heavy volume.
Cruise Liner Catches Fire Ahead of Earnings
Carnival was making headlines this week for the wrong reasons ahead of its first-quarter earnings report. A Carnival cruise ship caught fire for the second time in two years, after the ship’s funnel went up in flames while carrying passengers.
While weather conditions may have been a factor after several reports of lightning strikes, the cause of the most recent incident is still being investigated. Thankfully, no passengers on the ship were injured.
Carnival operates a fleet of more than 90 ships that visit approximately 700 ports. The company provides destination services under recognized brand names such as AIDA, Carnival, Costa, Princess, and Seabourn. Carnival sells its cruises primarily through travel agents, tour operators, vacation planners, and websites.
CCL is currently a Zacks Rank #2 (Buy) stock. The cruise liner has surpassed earnings estimates in each of the past four quarters with an average surprise of 19.2%. The company has seen its shares rise more than 86% over the past year.
Strong fundamentals are backing up the price movement. Revenues for the latest quarter are expected to climb 21.95% to $5.4 billion. While Carnival is still expected to show a loss, earnings estimates have been on the rise for the first quarter, with analysts bumping up their estimates by 5.56% in the past 60 days. The Q1 Zacks Consensus Estimate is now -$0.17/share, translating to a 69% improvement relative to the year-ago period.
What the Zacks Model Unveils
The Zacks Earnings ESP (Expected Surprise Prediction) seeks to find companies that have recently seen positive earnings estimate revision activity. The idea is that this recent information can serve as a more accurate predictor of the future, which can give investors a leg up during earnings season.
The technique has proven to be quite useful in finding positive surprises. In fact, when combining a Zacks Rank #3 or better with a positive Earnings ESP, stocks delivered a positive surprise 70% of the time according to our 10-year back test.
CCL is a Zacks Rank #2 (Buy) and boasts a +3.28% Earnings ESP. Another beat may be in the cards when the company reports its fiscal Q1 results tomorrow before the market opens.
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Carnival Corporation (CCL) : Free Stock Analysis Report
Take-Two Interactive Software, Inc. (TTWO) : Free Stock Analysis Report
The Progressive Corporation (PGR) : Free Stock Analysis Report
