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The Zacks Analyst Blog Highlights: Sonos, AGCO Corp and Parker-Hannifin

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Zacks Equity Research
·8 min read
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For Immediate Release

Chicago, IL – January 18, 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: Sonos, Inc. SONO, AGCO Corporation AGCO and Parker-Hannifin Corporation PH.

Here are highlights from Friday’s Analyst Blog:

3 Highly Ranked Growth Stocks on the Move

The market can move pretty fast… even during a pandemic. Stocks hit new highs to begin 2021 and look to make even more history moving forward as the vaccines take hold and get things back to normal.

So you need a portfolio that can move just as fast! Our Top Ranked Growth Stocks on the Move screen can be a big help.

The three big components for this list are Zacks Ranks of #1 or #2 (Strong Buys and Buys only), a Zacks Industry Rank in the top 50% and Growth Style Scores of “A” or “B”. And the list is even further narrowed with things like average broker ratings, winning surprises, attractive valuations and positive price momentum.

What you’re left with is a list of high profitability stocks. Below are three names that recently made the list:


If you’re going to watch a football game at home while sheltering in place, you want to be able to hear that fake crowd as if you were right there… even though no one is. You’re going to need some awesome speakers.

Sonos designs, develops and produces audio products. The company had a fantastic 2020 with shares that soared more than 200% off the coronavirus lows, as people stocked up on home entertainment items in lieu of going to the theater, seeing a concert or attending a sports event.

The company may have only gone public in 2018, but fiscal 2020 was the 15th straight year that total households grew by at least 20%. And existing customers tend to stick around, accounting for more than 40% of total product registrations.

Even Disney is a fan. Mickey wanted you to know that Sonos speakers are the best way to enjoy the second season of The Mandalorian. Baby Yoda is so much cuter when his sighing and cooing comes through an Arc or Beam speaker system. In fact there was a time when folks who bought such eligible products received six months of Disney+.

Sonos’ CEO called the fiscal fourth quarter “an inflection point…that demonstrates the power and profitability of our model”. And it's easy to see why.

Earnings per share of 15 cents beat the Zacks Consensus Estimate by an impressive 650%, marking its third beat in four quarters. Revenue of $339.84 million eclipsed our expectations by nearly 14%. Both the top and bottom lines also easily beat year-ago results.

Earnings estimates have skyrocketed in the past 60 days. The Zacks Consensus Estimate for this year (ending September 2021) are up 258% in that time to 68 cents. Next year (ending September 2022) jumped 487% to 88 cents. Therefore, analysts currently expect year-over-year improvement of nearly 30%.

One of the reasons analysts are optimistic about Sonos’ future is because it offered an outlook for fiscal 2021, which is noteworthy these days. The company sees revenue between $1.44 billion to $1.5 billion, or growth of 11% to 15% over fiscal 2020.

Another reason for optimism? No one’s going back to rinky-dink speakers when this pandemic is over! There’s plenty of room for this relatively small player to get bigger moving forward.

AGCO Corporation

What do investors and farmers have in common? All right, that’s an easy one! Whether you’re dealing with portfolio returns or crops, they’re both interested in growth.

Unfortunately for the latter group, the U.S. farm sector had been in a drought for a while. But that may be about to change. We could be in the early stages of a turnaround for agriculture, which explains why the manufacturing – farm equipment space is in the Top 2% of the Zacks Industry Rank.

One of the big players in this arena is AGCO Corp., a leading manufacturer and distributor of agricultural equipment and related replacement parts. The company is a Zacks Rank #1 (Strong Buy) that jumped more than 160% off the coronavirus lows last year.  

The industry’s recovery was on full display in AGCO’s fiscal third quarter report, which included earnings per share of $2.09 that soared approximately 155% from the previous year. Perhaps more importantly, the result was nearly 105% better than the Zacks Consensus Estimate and marked the third straight quarter with a positive surprise.

Revenue of $2.5 billion improved 18.4% from the previous year and topped our expectations by 15.7%. AGCO saw sales growth and margin expansion across all regions as global crop production looks to be strong despite the lingering pandemic.

Best of all, AGCO actually offered some specifics on its outlook moving forward, which is still rather rare as companies deal with the covid impact. The company expects adjusted earnings per share of $5 for the current year, which was up from the previous guidance range of $3.50 to $3.75.

So you know what that means! The Zacks Consensus Estimate for 2020 soared 30.7% to $5.15 from three months earlier. Expectations for 2021 jumped 18.3% in that time to $6.21. Therefore, analysts are currently expecting year-over-year earnings improvement of more than 20% as AGCO will be at the forefront of this industry’s revival.


A screen that looks for stocks “on the move” is certainly going to be interested in Parker-Hannifin, which manufactures a diverse line of motion & control technologies and systems.

Its precision engineered solutions are used in all types of markets, including mobile, industrial and aerospace. Its two segments include Diversified Industrial (82.3% of fiscal first quarter sales) and Aerospace Systems (17.7%).

But if you really want to see this company move, take a look at that chart below. PH hasn’t missed the Zacks Consensus Estimate in years with the last four quarters being especially impressive with an average beat of more than 34%. Furthermore, shares jumped 183% off the coronavirus low in 2020.

And PH expects this momentum to continue. While its still being cautious due to the pandemic, it expects fiscal 2021 (ending in June) earnings per share between $11.70 and $12.30. The guidance has been raised from the previous range of $9.80 to $10.80.

As you’d expect, analysts rushed to increase their expectations after the update. The Zacks Consensus Estimate for fiscal 2021 is now at $12.25, which is up 4% in the past 60 days. Expectations for next fiscal year (ending June 2022) are only up 1.1% in that time to $14.31, but that does suggest year-over-year improvement of 16.8%.

The fiscal first quarter included adjusted earnings per share of $3.07, which beat the Zacks Consensus Estimate by more than 34% while also improving from the previous year by over 11%. Net sales of $3.23 billion were off year-over-year due to pandemic uncertainties, but it still beat the Zacks Consensus Estimate of $2.97 billion.

PH reports again on February 4.

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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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