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The Zacks Analyst Blog Highlights: Panasonic, ManpowerGroup, M.D.C. Holdings, Waters Corp and Emerson Electric

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For Immediate Release

Chicago, IL – February 4, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Panasonic Corporation PCRFY, ManpowerGroup Inc. MAN, M.D.C. Holdings, Inc. MDC, Waters Corporation WAT and Emerson Electric Co. EMR.

Here are highlights from Wednesday’s Analyst Blog:

These 5 Buy-Ranked Companies Just Posted Solid Earnings Beats

Earnings season is in full swing now and the trend so far is that an increasing number of companies are reporting positive surprises. This is usually followed by upward revision in estimates, which again drives share prices.

According to the latest Zacks earnings trends report, “The fundamental backdrop, as reflected in the outlook for earnings and interest rates, remains very favorable. We have convincing evidence on the earnings front in the ongoing Q4 earnings season. Not only are a historically high proportion of the reporting companies beating consensus EPS and revenue estimates, but they are also providing positive and reassuring guidance that is helping sustain the positive revisions trend that has been in place since July 2020.”

As a result, the first quarter 2021 earnings growth that was estimated to be +14.3% on Jan 27 is now +15.6%.  

However, unlike other earnings seasons, this time the market hasn’t immediately rewarded many of the positive surprises. This doesn’t mean that the shares won’t move up. In fact price weakness after stellar earnings results is a great opportunity to buy. So in case you haven’t made the most of this market, here are 5 buy-ranked stocks that have just reported solid surprises-

Panasonic Corp.

Panasonic is a leading developer and manufacturer of electronic products for a wide range of consumer, business and industrial needs. The company has been better known for its home appliances, but of late, it has been shifting focus to higher-margin car electronics and EV batteries.

The company topped December quarter earnings estimates by 8 cents or 32% on sales that were still about 1% below the year-ago quarter. It raised its profit outlook.

Panasonic also provided encouraging commentary about its battery business with Tesla. The unit is expected to be profitable this year. A new battery-manufacturing facility in Nevada that it jointly owns with Tesla is also expected. Panasonic also has a lithium ion battery unit in Norway that should helpit serve European demand.

The increased focus on automotive is probably why the current CEO is stepping down to make way for the new CEO Uki Kusumi, who is currently the head of its automotive business.

Revenue and earnings are expected to decline in 2021 (ending March) and grow a respective 5.4% and 72.0% in 2022.

The shares carry a Zacks Rank #2 (Buy) and Value, Growth and Momentum Scores of B, A and A, respectively. At 19.9X P/E, they don’t look too expensive.

ManpowerGroup

ManpowerGroup has a well-established network of 2,500 offices in 75 countries and territories offering a wide range of staffing solutions, and engagement and consulting services.

The company topped December quarter earnings estimates by 35 cents or 31% on sales that were about 7% above the Zacks Consensus Estimate. The Q1 profit outlook of 64-72 cents including an estimated favorable currency impact of 7 cents, was a couple of cents below expectations.

While the pandemic dealt a heavy blow to Manpower’s business, it’s clear that the company has adapted well to the situation. Revenues have improved in both the September and December quarters with the last quarter being just 2.7% below the year-ago period. Management also said that business trends were positive.

Analysts currently expect growth to return this year, albeit from a lower base in 2020. So the Zacks Consensus Estimate for 2021 represents 8.7% growth in revenue and 66.0% growth in earnings.

The Zacks Rank #2 stock has Value, Growth and Momentum Scores of A, B and C, respectively. What’s more, at 15.2X earnings, the shares are going cheap.

M.D.C. Holdings

MDC is engaged in the construction, sale and related financing of residential housing, and the acquisition and development of land for use in the Denver, Phoenix, Maryland, Virginia, the mid-Atlantic region, Las Vegas, Dallas and the California metropolitan areas.

December quarter earnings beat by 48 cents (28.1%) on revenues that were more or less in line.

2020 was a solid year for home builders, driven by limited inventories, low mortgage rates, pent-up demand resulting from millennials aging into their prime home-buying years and an increased emphasis on single family home ownership brought about by the pandemic. These dynamics helped the company grow its order book. So the dollar value of its net orders were up 92% on the year even as sales were up 62%.

Management said that 2021 has also begun well, particularly because the company’s focus on more affordable housing and its build-to-order operating model was proving attractive to people.

The market strength has created optimism among analysts. As a result, the Zacks Consensus Estimate for 2021 currently has revenues increasing 30.2% and earnings increasing 28.7%.

The Zacks Rank #1 (Strong Buy) stock has Value, Growth and Momentum Scores of B, D and C, respectively. Its forward P/E of 8.2X indicates that the shares are going cheap.

Waters Corp.

Waters Corp. makes analytical instruments based on mass spectrometry (MS), liquid chromatography (LC) and thermal analysis technologies used in R&D, quality assurance and other operations by pharmaceutical, life science, biochemical, industrial, academic and government customers.

December quarter earnings beat the Zacks Consensus Estimate by 78 cents (27.2%) on revenues that beat by 10.6%.

The strength in the last quarter was primarily driven by resurgence in the pharmaceuticals market, as well as improvement in the industrials market. Recurring revenues were encouragingly stronger.

The company provided encouraging earnings guidance for 2021 of $9.32-$9.57 a share, better than the Zacks Consensus of $9.26 (analysts on average currently expect earnings growth of 11.9% this year). Revenue guidance (in constant currency) of 5-8% growth in 2021 is in line with current expectations of 6.5% growth.

The Zacks Rank #2 stock has Value, Growth and Momentum Scores of D, B and A, respectively. Its forward P/E of 31.2X is at the high end of its trading range over the past year.

Emerson Electric Co.

Emerson Electric Co. is a diversified global engineering and technology company offering a wide range of products and services to customers in the consumer, commercial and industrial markets of Europe; the Americas; and Asia, Middle East & Africa.

December quarter results topped the Zacks Consensus Estimate by 15 cents (22.1%) on revenues that also topped by 5.2%.

The company serves customers across a very broad range of industries. So they all appear to be improving to varying degrees with residential, cold chain, life sciences, medical, and food & beverage standing out. The breadth of exposure has also offered stability to the business.

Management focus is currently on trimming costs and getting digitized, which should better serve customers.

The company currently expects 4-8% revenue growth in fiscal 2021 ending in September (the Zacks Consensus is at 5.3% growth) and EPS of $3.70 (Zacks Consensus is $3.49).

The Zacks Rank #2 stock has Value, Growth and Momentum Scores of C, B and C, respectively. Its forward P/E of 22.9X indicates that the shares are not too expensive.

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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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.


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Emerson Electric Co. (EMR) : Free Stock Analysis Report
 
ManpowerGroup Inc. (MAN) : Free Stock Analysis Report
 
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M.D.C. Holdings, Inc. (MDC) : Free Stock Analysis Report
 
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