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Realogy Holdings, Hawaiian Holdings, Intel, NVIDIA and Advanced Micro Devices highlighted as Zacks Bull and Bear of the Day

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·11 min read
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For Immediate Release

Chicago, IL – November 5, 2020 – Zacks Equity Research Shares of Realogy Holdings Corp. RLGY as the Bull of the Day, Hawaiian Holdings, Inc. HA as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Intel Corporation INTC, NVIDIA Corporation NVDA and Advanced Micro Devices, Inc. AMD.

Here is a synopsis of all five stocks:

Bull of the Day:

Realogy Holdings is at the front lines of the hot housing market. This Zacks Rank #1 (Strong Buy) is expected to see double digit earnings growth this year and next.

Realogy is one of America's largest real estate services companies. It offers brokerage services, relocation and title and settlement businesses as well as a mortgage joint venture.

Its brands include Better Homes and Gardens Real Estate, Century 21, Coldwell Banker, Coldwell Banker Commercial, Corcoran, ERA and Sotheby's International Realty.

Big Beat in the Third Quarter

On Oct 29, Realogy reported its third quarter results and blew by the Zacks Consensus by $0.19. Earnings were $1.36 versus the consensus of $1.17.

Revenue jumped 20% to $1.9 billion.

Title and mortgage were a big boost in the quarter, generating approximately $95 million in third quarter operating EBITDA.

The housing market was strong in the quarter and that led to a 28% jump in combined closed transaction volume. The transaction volume continued to improve throughout the quarter and also continued to be strong into October.

It generated free cash flow from continuing operations of $344 million, up from $116 million a year ago.

As a result, the company was able to reduce net debt by $276 million versus a year ago.

It also was able to grow brokerage agents 2% year-over-year and continued to improve retention.

Full Year Estimates Rise

Given the strong quarter and the continued hot housing market nationwide, the analysts are bullish about Realogy in 2020 and 2021.

The 2020 Zacks Consensus Estimate has jumped to $1.16 from $0.36 in the last month. That is earnings growth of 13.7% from last year as the company only made $1.02 in 2019.

2021 is looking even brighter. The Zacks Consensus has surged to $1.60 from $0.84 over the prior 30 days.

That's also another 38% earnings growth.

Shares Rally But Are Still Cheap

Realogy shares got sold off in the March coronavirus sell-off but have rallied and are now up 31% year-to-date.

But shares are still cheap.

Realogy trades with a forward P/E of just 10.5.

Bear of the Day:

Hawaiian Holdings is just trying to make it through 2020 as travel has been severely impacted by COVID-19. This Zacks Rank #5 (Strong Sell) is waiting on a rebound in 2021.

Hawaiian Holdings is the parent of Hawaiian Airlines which is the biggest and longest-serving airline in Hawai'i. Now in its 91st year of continuous service it offers nonstop flights between Hawai'i and 13 US gateway cities along with international service to Japan, South Korea, Australia, New Zealand, American Samoa and Tahiti.

Due to COVID, however, it is running a smaller, adjusted schedule between the US mainland in addition to Japan.

A Third Quarter Miss

Not surprisingly, given the continuing impacts of COVID-19 on the travel industry, Hawaiian missed in the third quarter.

On Oct 27, it reported third quarter results and missed by $0.20. It reported an earnings loss of $3.76 versus the Zacks Consensus of a loss of $3.56.

Hawai'i had a strict 14-day quarantine requirement for those arriving to the islands which impacted their business for the entire quarter.

It operated a very limited schedule as a result.

In response, Hawaiian implemented both permanent and extended voluntary leave programs. In total, the company reduced its workforce by about 2,400 employees, or more than 32% of all employees.

Liquidity Position

As of Sep 30, 2020, it had unrestricted cash, cash equivalents and short-term investments of $979 million.

In October 2020, Hawaiian executed an amendment with the U.S. Treasury increasing the total amount of the ERP loan from $420 million to $622 million, of which $577 million is undrawn.

Hawaiian has until March 2021 to determine how much of the remaining ERP funds to borrow.

Full Year Estimates Cut Again

With travel still struggling, the analysts have cut 2020 and 2021 earnings estimates again.

5 analysts cut 2020 in the last month, pushing it down to a loss of $11.31 from a loss of $9.90 a month ago. That's an earnings decline of 345% compared to 2019 as Hawaiian made $4.60 last year.

4 analysts also cut 2021 during the same time, pushing the Zacks Consensus down to a loss of $2.00 from a loss of $0.31.

Shares Remain Down Big in 2020

Not surprisingly, given the state of travel, Hawaiian's shares remain depressed.

They're still down 51% year-to-date.

But that's the situation with all of the airlines right now.

There are no Zacks Rank #1 (Strong Buy) or #2 (Buy) airline stocks.

Additional content:

Intel (INTC) Spruces Up A.I. to Challenge Competition

Intel has reportedly acquired Cnvrg.io — an Israel-based company that specializes in development of advanced machine learning (ML) models.

The TechCrunch article, citing confirmation from an Intel’s spokesperson, states that the startup will function as “an independent Intel company.”

However, neither has there been an official statement regarding the development, nor the terms of the deal have been revealed. Nevertheless, per Pitchbook data, Cnvrg.io has raised funds worth $8 million and was valued at $17.8 million.

The chipmaker has remained focused on accelerating its presence in the fast-growing AI silicon market and bringing AI technology down to the chip level. The company upholds the notion that a broad mix of technology is essential for harnessing the power of ML and AI.

In fact, the semiconductor giant sealed its SigOpt acquisition deal in the past week. Notably, San Francisco, CA-based SigOpt offers an optimization platform to aid data scientists run AI-driven modeling and simulation workloads in an enhanced manner.

Strategic Bets to Enhance AI Expertise Hold Promise

Rapid proliferation of AI into hardware systems calls for effective solutions to support processing of workloads. According to IDC data, worldwide spending on AI systems is projected to be $50.1 billion in 2020. The research firm expects the figure to hit $110 billion in 2024 at a CAGR of 20.1% between 2019 and 2024.

This growth opportunity is alluring Intel and other semiconductor companies to deliver efficient solutions aimed at supporting complex AI workloads and enhance performance.

Intel is leaving no stone unturned to ramp up its efforts in the AI trained inference server chip market. The company’s latest acquisitions follow a string of AI-related buyouts undertaken in the past few years that include — Habana, Movidius, Nervana, Altera and Mobileye.

These buyouts are expected to aid Intel in bolstering its portfolio of AI accelerators in its data center business, taking the fight to NVIDIA and Advanced Micro Devices.

NVIDIA’s Arm Acquisition & AMD’s Xilinx Deal to Spice Up the Game

Both NVIDIA and AMD are doubling down on end-to-end stack development to enhance presence in the data center end-market.

NVIDIA’s impending acquisition of Arm Holdings for $40 billion holds potential to guide the chip industry to new highs and deserves a special mention in this regard. To quote NVIDIA’s CEO, Jensen Huang's views on the deal, “We’re uniting NVIDIA’s leading AI computing with Arm’s vast ecosystem.”

Continuing momentum of Arm-based devices coming to the market and synergies from NVIDIA’s AI expertise are likely to intensify competition in the mobile segment, which is a headwind for Intel. NVIDIA currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Meanwhile, AMD is benefiting from the solid uptake of Ryzen and EPYC server processors, courtesy of increasing proliferation of AI and ML in industries like cloud gaming and supercomputing. In a bid to capitalize on these gains, it has entered into a definitive agreement to acquire Xilinx  for $35 billion in an all-stock transaction.

The buyout of Xilinx, the pioneer in field-programmable gate arrays (FPGAs) chips, will boost AMD's data center business, which is benefiting from the coronavirus crisis-triggered cloud computing boom. AMD, currently carrying a Zacks Rank #3 (Hold), expects the acquisition to bolster its total addressable market (or TAM) to $110 billion.

With the competition intensifying in the consolidating chip industry, it becomes imperative for Intel to make strategic investments that help it expand AI capabilities, and increase competitiveness of its processors in the data center vertical.

The buyouts are anticipated to augment Intel’s portfolio by adding AI and ML capabilities to a high-performance training processor family and standards-based programming environment to cater to AI workloads. Intel’s combined expertise is likely to aid it in delivering best in-class AI products to meet diverse performance needs of customers.

This is expected to aid Intel in delivering advanced inference performance with focus on throughput and real-time latency in a highly competitive power envelope. Such upsides are likely to strengthen Intel’s footing in the AI space.

Markedly, the company expects the AI space to be worth more than $25 billion by 2024, and AI silicon in the data center is projected to hit $10 billion in the same time frame.

In fact, the company has rolled out Neural Network processors to support deep learning processes. Moreover, Intel’s Movidius visual processing unit is expected to accelerate complex computer vision, edge media and inference applications. Also, increasing investments in development of inference-enabled chips are anticipated to boost Intel’s self-driving initiatives and register new deal wins from Mobileye. Intel currently carries a Zacks Rank #3.

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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