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Douglas Dynamics and Fresenius Medical have been highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – November 11, 2022 – Zacks Equity Research shares Douglas Dynamics PLOW as the Bull of the Day and Fresenius Medical FMS as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Tencent Music Entertainment Group TME, Ross Stores Inc. ROST and StoneCo Ltd. STNE.

Here is a synopsis of all five stocks.

Bull of the Day:

The market is in all out beast mode right now. The lower than expected CPI number this month helped spark a rally of epic proportions. A big gap up and go for stocks that many expect is likely to continue. That may make everyone feel like the dart-board approach is back. That could not be further from the truth. When the frothy rally dies, it will be earnings that separate the platinum from the white gold.

One way to find stocks with great earnings trends is by leaning on our Zacks Rank. Our Zacks Rank is based on earnings estimate revisions coming from analysts all over Wall Street. Today’s Bull of the Day is Zacks Rank #1 (Strong Buy) Douglas Dynamics.

Douglas Dynamics, Inc. operates as a manufacturer and upfitter of commercial work truck attachments and equipment in North America. It operates through two segments, Work Truck Attachments and Work Truck Solutions.  The company sells its products under the BLIZZARD, FISHER, SNOWEX, WESTERN, TURFEX, SWEEPEX, HENDERSON, BRINEXTREME, and DEJANA brands. It distributes its products primarily to professional snowplowers who are contracted to remove snow and ice from commercial and residential areas. The company was founded in 1948 and is headquartered in Milwaukee, Wisconsin.

The reason for the favorable Zacks Rank is that analysts have been increasing their earnings estimates for both the current year and next year. Over the last 30 days, estimates for the current year are up from $1.80 to $2.01 while next year’s number is up from $2.27 to $2.32. That represents EPS growth of 20% this year and 15% next year.

The year-over-year growth has helped the stock rally from lows under $30 in October to over $38 today. The stock is still a far cry from the late 2019, early 2020 highs over $55.

Bear of the Day:

The latest move higher in the market has boosted up all kinds of stocks. That means, even stocks with weak earnings trend have rebounded because they were simply so oversold. Be careful when you come in and buy the dip blindly. Sometimes, the stocks that are going up along with the rest of the market are not the quality names that you should be betting on.

One way to avoid stocks with weak earnings trends is passing on Zacks Rank #5 (Strong Sell) stocks. These stocks have seen earnings estimates drop over the last few weeks, which means that Wall Street could be turning bearish. Today’s Bear of the Day is one such stock. I’m talking about Zacks Rank #5 (Strong Sell) Fresenius Medical.

Fresenius Medical Care AG & Co. KGaA provides dialysis care and related dialysis care services in Germany, North America, and internationally. It offers dialysis treatment and related laboratory and diagnostic services through a network of outpatient dialysis clinics; materials, training, and patient support services comprising clinical monitoring, follow-up assistance, and arranging for delivery of the supplies to the patient's residence; and dialysis services under contract to hospitals in the United States for the hospitalized end-stage renal disease (ESRD) patients and for patients suffering from acute kidney failure.

The reason for the unfavorable rank is that over the last 60 days, three analysts have cut estimates for the current year and next year. The negative moves have cut our Zacks Consensus Estimate for the current year from $1.67 to $1.46 while next year’s number is off from $1.86 to $1.56. That’s a 29% contraction this year and growth of just 6.7% next year.

The Medical-Instruments Peers industry ranks in the Bottom 48% of our Zacks Industry Rank.

Additional content:

4 Stocks to Buy Ahead of Earnings Next Week

We are in the last leg of the third-quarter 2022 earnings season. So far, corporate America has shown mixed results. Although the earnings growth rate has declined systematically, margin pressures are less than expected. This earning season is of immense importance as U.S. corporations are facing severe challenges from record-high inflation, an extremely hawkish Fed and threats of a recession.

We have identified four stocks with a favorable Zacks Rank that are set to beat earnings estimates next week. Investment in these stocks should be fruitful as an earnings beat is expected to drive stock prices going forward. These companies are — Tencent Music Entertainment Group, Ross Stores Inc. and StoneCo Ltd.

Q3 Earnings Results So Far

Our estimates for third-quarter earnings of the market’s benchmark, the S&P 500 Index, have shown a gradual decline in the past three and a half months. As of Nov 9, 453 companies on the S&P 500 Index have reported results.

Total earnings of these companies are up 2.6% from the same period last year on 12.4% higher revenues, with 69.3% beating EPS estimates and 68% beating revenue estimates. Our current estimate has projected that total earnings of the S&P 500 Index are expected to be up 1.5% year over year on 11.4% higher revenues.

Our Top Picks

We have chosen four companies that will report third-quarter earnings results next week. Each of these stocks carries a Zacks Rank #2 (Buy) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after their earnings releases. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Tencent Music operates online music entertainment platforms to provide music streaming, online karaoke, and live streaming services in the People's Republic of China. TME offers QQ Music, Kugou Music, and Kuwo Music, which enable users to discover and listen to music in personalized ways. It also offers WeSing, which enables users to sing and interact with friends, share their singing performances and discovering songs that others have sung.

TME has an Earnings ESP of +4.76%. It has an expected earnings growth rate of 5.1% for next year. The Zacks Consensus Estimate for next-year earnings has improved 2.5% over the last 30 days.

Tencent Music recorded earnings surprises in the last four reported quarters, with an average beat of 13.4%. TME is set to release earnings results on Nov 15, before the opening bell.

StoneCo provides financial technology solutions to merchants and integrated partners to conduct electronic commerce across in-store, online, and mobile channels in Brazil. STNE distributes its solutions, principally through proprietary Stone Hubs, which offer hyper-local sales and services; and technology and solutions to digital merchants through sales and technical personnel and software vendors, as well as sells solutions to brick-and-mortar and digital merchants through sales team.

STNE has an Earnings ESP of +45.45%. It has an expected earnings growth rate of 66.7% for the current year. STNE is set to release earnings results on Nov 17, after the closing bell.

Ross Stores is gaining from robust customer demand, accelerated vaccination rates, government stimulus payments and easing of COVID-19 restrictions. ROST’s sales benefited from broad-based growth across certain merchandise categories and regions, as well as robust comparable store sales.

The children and men's categories performed well in the holiday selling period, and the Midwest and Southeast regions were the outperforming regions for Ross Stores. Sales trends were also robust at the dd's DISCOUNTS business.

ROST has an Earnings ESP of +3.13%. The Zacks Consensus Estimate for next-year earnings has improved 0.3% over the last 30 days. Ross Stores recorded earnings surprises in three out of the last four reported quarters, with an average beat of 14.1%. ROST is set to release earnings results on Nov 17, after the closing bell.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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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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Fresenius Medical Care AG & Co. KGaA (FMS) : Free Stock Analysis Report
 
Ross Stores, Inc. (ROST) : Free Stock Analysis Report
 
Douglas Dynamics, Inc. (PLOW) : Free Stock Analysis Report
 
StoneCo Ltd. (STNE) : Free Stock Analysis Report
 
Tencent Music Entertainment Group Sponsored ADR (TME) : Free Stock Analysis Report
 
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