U.S. markets closed
  • S&P 500

    4,188.43
    -44.17 (-1.04%)
     
  • Dow 30

    34,742.82
    -34.94 (-0.10%)
     
  • Nasdaq

    13,401.86
    -350.38 (-2.55%)
     
  • Russell 2000

    2,212.70
    -58.93 (-2.59%)
     
  • Crude Oil

    64.82
    -0.08 (-0.12%)
     
  • Gold

    1,837.80
    +6.50 (+0.35%)
     
  • Silver

    27.41
    -0.06 (-0.21%)
     
  • EUR/USD

    1.2145
    -0.0024 (-0.19%)
     
  • 10-Yr Bond

    1.6020
    +0.0250 (+1.59%)
     
  • GBP/USD

    1.4130
    +0.0141 (+1.00%)
     
  • USD/JPY

    108.7400
    +0.1580 (+0.15%)
     
  • BTC-USD

    54,909.23
    -2,862.35 (-4.95%)
     
  • CMC Crypto 200

    1,440.48
    -120.81 (-7.74%)
     
  • FTSE 100

    7,123.68
    -6.03 (-0.08%)
     
  • Nikkei 225

    29,518.34
    +160.52 (+0.55%)
     

SMART Global, General Motors, Moderna, BioNTech and Johnson & Johnson highlighted as Zacks Bull and Bear of the Day

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Zacks Equity Research
·11 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

For Immediate Release

Chicago, IL – April 15, 2021 – Zacks Equity Research Shares of SMART Global Holdings, Inc. SGH as the Bull of the Day, General Motors Company GM as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Moderna, Inc. MRNA, BioNTech SE BNTX and Johnson & Johnson JNJ.

Here is a synopsis of all five stocks:

Bull of the Day:

SMART Global Holdings is a Zacks Rank #1 (Strong Buy) that designs and manufactures electronic products focused in the memory and computing technology areas. The company is engaged in the computer, industrial, networking, telecommunications, aerospace and defense markets.

SGH has been on a steady climb all year, but recent earnings took the stock to all time highs. Analysts are taking estimates higher as the stock looks to have a promising Q3 and FY2021 ahead.

More About the Company

SMART Global is headquartered in Newark, CA and has over 1700 full-time employeesThe company operates in the U.S., Europe, Asia and Latin America.  

SGH primarily offers DRAM modules and flash memory products, but also provides supply chain services.

The company has a market cap of $1.3 Billion and has Zacks Style Scores of “A” in Momentum and “B” in Growth. The stock pays no dividend and has a Forward PE of 14.

Q2 Earnings and Guide

Earlier this month, the company reported Q2 earnings, seeing a 9% EPS surprise to the upside. The company saw $0.87 v the $0.80 expected and revenue came in at $304.0M v the $296M expected.

SGH also raised their Q3 guidance and now sees a range of $1.00-1.20 v the $0.88 expected. The revenue was guided up as well, now at a range of $400-430M v $314M expected. The company also guided gross margins 19-21% and EBITDA came in at $31M, up almost 39% year over year.  

The earnings beat was the fifth in a row after the company struggled for the better part of 2019.

Estimates and Upgrades

Over the last 7 days, estimates have jumped higher. For the next quarter, we have seen estimates raised by 16%, from $1.05 to $1.22. For next year, we have seen a 27% move higher in that same time frame.

A couple of analysts have taken price targets higher since earnings, with Barclays resuming SGH with an Overweight rating and a $60 target. Additionally, Stifel hiked their target to $62.50 from $55.   

Stifel cited Penguin Computing and the 30% sequential growth as reasoning for the hike. The firm believes that the strong commercial and Federal pipeline will allow momentum to continue.

Technicals

The stock is already up over 50% on the year, so the recent earnings move higher is starting see some profit taking. If the stock can’t manage to get back to recent highs, investors should look for some levels to enter the stock on market pullbacks.  

With the stock currently trading at $54, the momentum area to buy would be the 21-day moving average. This currently sits just over $48 and aligns with a 61.8% retracement level drawn from March lows to post-earnings highs.

For those looking for larger pullbacks, watch the 50-day MA at $46.50. The 200-day is way down at $34 and likely out of reach with a stock this strong.

Bottom Line

SMART Global is well positioned for the back half of the year, both fundamentally and technically. The momentum and demand for its products and services are strong, which will cause investor interest going forward.

Investors should look for buying opportunities on pullbacks and look for the stock’s momentum to continue higher over the next couple quarters.

Bear of the Day:

General Motors is a Zacks Rank #5 (Strong Sell) that is one of the largest automakers in the world and makes up 17% of the U.S market share. The company designs, builds and sells trucks, cars, crossovers and automobile parts worldwide.   

The stock has had a nice run as of late after taking off in January. The company has transitioned well in EV, it continues to dominate traditional markets. However, the stock looks like it might have topped and analysts are lowering estimates.

As we approach the upcoming earnings season, investors should be tapping the breaks and possibly taking some profits.

More about GM

General Motors is an iconic American car company with a long history that goes back to 1908. Part of the “Big Three,” General Motors is headquartered in Detroit, Michigan and employs over 150,000.

The company is valued around $86 billion and has a PE of 12. GM has Zacks Style Scores of “A” in Value and “B” both Growth and Momentum. The company pays no dividend.  

Since the company went bankrupt in 2009 and IPOs in 2010, General Motors has been profitable.  Even so, the stock traded between $30 and $40 for the last decade. It was only recently that the stock broke out, but are investors getting ahead of themselves?

Q4 Earnings

Earnings have been pretty impressive over the last couple years, with the company beating ten quarters in a row. The company reported Q4 in early February, seeing a 19% EPS beat. The company also beat on revenue seeing $37.5B v the $36.9B expected.

The bad news was that the company guided FY21 at $4.50-5.25 v the $5.92 expected. The reasoning behind the drop in guidance was the semiconductor shortage that the company was starting to experience. This has only gotten worse since the company guided.

Semiconductor Shortage

At the time, GM expected the semi shortage to be temporary and thought that it would not impact the growth and EV initiatives. However, the headlines about semiconductor shortages keep coming.

Earlier this month GM announced cuts in production at several North American facilities due to the shortage. While some chip supply has been improved this week, the question is if the damage was done for the quarter and the year.

Estimates

The guidance and risk of more shortages has estimates falling for FY21 and next FY22. For the current year, analysts have lowered estimates from $5.49 to $5.09, or 7%, over the last two months. For next year, analysts have dropped their numbers 5.5% over that same timeframe.

The Technicals

During the COVID crash, the stock dropped to $14, but rallied back to pre-COVID levels by October. At the beginning of 2021, the stock took off, making a 20% move higher to the $50 level. Since then, the stock has grinded higher, recently topping out over $63.  

GM recently broke the 21-day moving average and the bulls have to take caution if that momentum level fails. The next stop lower and test of support would be the $56 level, right above the 50-day MA. The 200-day is all the way down under $41, so unless there is a broad market sell off, that test isn’t likely.

In Summary

General Motors is a great American car company that we all root for. However, investors should be aware there are some flashing red lights as we approach the upcoming earnings season.

Additional content:

Is J&J's Covid-19 Vaccine Setback a Boon for Other Players?

Shares of coronavirus vaccine makers including Moderna and BioNTech as well as other companies whose COVID-19 vaccine is in late-stage development rose as the U.S. Centers for Disease Control and Prevention (CDC) and the FDA jointly recommended pausing of the use of Johnson & Johnson's COVID-19 vaccine.

The decision to pause J&J’s vaccine comes after the federal health officials noticed cases of ultra-rare blood clots following vaccination. Reportedly, the cases of blood clots seem similar to cases found in individuals vaccinated with AstraZeneca’s COVID-19 vaccine, Vaxzevria. Please note that Vaxzevria is yet to receive emergency approval in the United States but is already approved (temporary/conditional) for use in Europe, the United Kingdom and some other countries.

Health officials in the United States are now trying to figure out reasons for blood clots after vaccination and has recommended pausing administration of J&J’s vaccine until review of these blood clot cases are completed. A meeting is expected to be held today by the CDC’s Advisory Committee on Immunization Practices to discuss J&J’s case. J&J’s vaccine is also under review for blood clots in Europe.

Please note that J&J received emergency/conditional use approval in the United States and Europe in February and March, respectively. However, the vaccine has not yet been rolled out in European countries.

Advantages for Other Vaccines

Stocks of J&J’s competitors gained following its setback due to an anticipated decrease in competitive pressure in the field of coronavirus vaccines that has attracted several players. Stocks of vaccine developers that rose on Wednesday include Moderna, Pfizer, BioNTech, Novavax, Inoviva and Vir Biotechnology that were up 7.4%, 0.5%, 6.7%, 10.8%, 6% and 4.1%, respectively.

We note that the temporary suspension of J&J’s vaccine boosts the prospect of other biotech players involved in development or commercialization of COVID-19 vaccines. Although other biotech companies have supply agreements related to their respective vaccines already in place, any continuation of the suspension for a longer term may see additional supply agreements for these companies.

Additional agreements mean more revenues for J&J’s competitors. We note that several countries have partially or completely restricted use of AstraZeneca’s Vaxzevria following similar blood clot events. Moreover, any setback in the United States for J&J’s vaccine may have a global impact as other countries may follow suit.

Currently, there are three available vaccines — Pfizer/BioNTech’s BNT162b, Moderna’s mRNA-1273 and Vaxzevria — in different countries in the world. Novavax is also developing its vaccine candidate in late-stage studies and may win an emergency use approval in a few months. Currently, BNT162b and mRNA-1273 are primarily being supplied in the United States. Supply to other countries have started or will begin later this year.  Demand for these two vaccines is also increasing in other countries and additional supply agreements may follow.

However, it should be noted that cases of blood clots after vaccination with J&J’s vaccine are ultra-rare and U.S. health officials may allow vaccinations to resume, keeping benefits from the vaccine in mind. The risk-benefit ratio for both J&J’s vaccine and Vaxzevria seems favorable. Outcomes of today’s meeting on J&J’s vaccine will provide more clarityon the scenario. While negative news will be good for competitors, a positive development may hurt theirstocks.

While Moderna carries a Zacks Rank #2 (Buy), the other leading coronavirus vaccine makers — AstraZeneca, J&J, Pfizer and BioNTech — carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

https://www.zacks.com

 

Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.

 

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
BioNTech SE Sponsored ADR (BNTX) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research