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The Zacks Analyst Blog Highlights Tesla, United Airlines and Las Vegas Sands

·5 min read

For Immediate Release

Chicago, IL – July 21, 2022 – 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: Tesla TSLA, United Airlines UAL and Las Vegas Sands LVS.

Here are highlights from Wednesday’s Analyst Blog:

Markets Modestly Up on Relief Rally; Tesla, United, Sands Mixed in Q2

Well lookee here — another trading session closing in the green Wednesday. If we didn't know better, we might assume market participants are looking past a short-term recession into stronger economic conditions ahead: the Dow is +0.16%, the S&P 500 +0.59% — both up in three of the last four trading days — and the Nasdaq +1.58%, for its fourth up session in the last five.

But, of course, we do know better. It's nice more money is being put to work in quality equities — a huge switch from a month ago, when no place was safe — but we still have a long slog through demand destruction, higher interest rates trying to chip away at 40-year-high inflation, and Q2 earnings season — while so far better than expected overall — is just getting started; there is plenty of ugly yet to uncover from the past three months.

Earlier yesterday, we saw Existing Home Sales hit their slowest pace in two years: 5.12 million seasonally adjusted, annualized units sold in the month of June, down -5.4% month over month and -14.2% year over year. The median price of sale for an existing home reached $416K, a new all-time record and +13.4% from a year ago. And, of course, this data is based on closings, meaning prior to mortgage rates hitting 6%+. In short, more pain is coming to housing valuations.

Tesla reported Q2 earnings after the closing bell Wednesday, posting $2.27 per share on $16.93 billion in sales — a beat on the bottom line but a miss on the top. Gross Margins slipped to 27.9% from an expected 28.2% and 30% last quarter, 26.2% when subtracting regulatory credits. This is obviously going the wrong direction, but it still represents gross margins not seen anywhere else in the auto industry.

We already saw Tesla delivered 255K vehicles in the reported quarter. The company also reportedly converted 75% of its extensive Bitcoin holdings in the quarter, which converted to $936 million. Shares initially gained +4.5% on the news, but traded flat shortly afterward.

United Airlines also posted a mixed Q2, though in reverse: earnings of $1.43 per share missed the $1.86 expected, while $12.11 billion in revenues outpaced the $12.03 billion in the Zacks consensus. It marks the major airline's first profitable quarter without payroll subsidies since the pre-pandemic days. Total Revenue per Seat Mile ballooned up +24% from the same quarter in 2019, offset somewhat by higher fuel and workforce costs.

Las Vegas Sands also missed on earnings but beat on sales in its Q2 report after the bell yesterday, -34 cents per share on $1.05 billion, with its Singapore business more than doubling expectations in the quarter. The difficulties related to Macau shutdowns on Covid restrictions, but the good news is that adjusted property EBITDA came in 45% higher than consensus. Shares were up +2.5% on the news.

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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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United Airlines Holdings Inc (UAL) : Free Stock Analysis Report
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