For Immediate Release
Chicago, IL – March 18, 2019 – Zacks Equity Research YETI Holdings YETI as the Bull of the Day, Gilead Sciences GILD as the Bear of the Day. In addition, Zacks Equity Research provides analysis on FedEx FDX and Amazon AMZN.
Here is a synopsis of all five stocks:
Bull of the Day:
YETI Holdings designs, markets, and distributes outdoor and recreational products under the popular YETI brand primarily in the U.S. The company’s products are designed mostly for outdoor activities, like hunting, fishing, camping, barbecue, and many others. YETI is based in Austin, Texas.
YETI is known in the leisure-recreational market for selling very expensive coolers, some as expensive as $1,300. But similar to Canada Goose, it’s been able to create a brand that represents “high-quality” to consumers, as well as one that can justify those high-ticket prices.
YETI IPO’ed back in October, but had a shaky start during its first few months of trading. However, the company’s recent strong fourth-quarter results have renewed optimism in the company among investors.
Better-Than-Expected Q4 Results
Earnings of 38 cents beat the Street consensus of 35 cents per share, and adjusted net income rose a whopping 379% to $32 million.
Sales climbed 19% year-over-year to $241.2 million, which beat our consensus estimate.
YETI’s core product portfolio performed well, too, with its Drinkware segment revenues up 24% from the prior-year period.
Direct-to-consumer (DTC) soared 45% year-over-year.
Additionally, YETI was able to pay down its debt load by $152 million across 2018, which brought its total debt load to about $332 million at the end of last year.
YETI On the Rise
Year-to-date, shares of YETI are up over 95% compared to the S&P 500’s gain of almost 14%.
Estimates have been rising lately too, pushing the stocks towards a Zacks Rank #1 (Strong Buy).
For the current fiscal year, the company’s earnings are expected to grow about 12% year-over-year. Six analysts have revised their estimates upwards in the past 60 days, and the Zacks Consensus Estimate has moved six cents higher from $0.96 to $1.02 during the same time frame.
2020 looks pretty strong too, and earnings are expected to grow over 20%; next year’s consensus estimate sits at $1.23 per share, with five upward revisions in the last 60 days.
For 2019, YETI expects full-year sales to be up between 11.5% and 13% year-over-year. Adjusted EPS is projected to be up between 18% and 24% year-over-year.
YETI definitely has a lot of untapped potential, especially if it expands its DTC channel and continues to introduce more products that resonate with its core customer (just like it did with drinkware and soft coolers).
If you’re an investor looking for an outdoor brands stock to add to your portfolio, make sure to keep YETI on your shortlist.
Bear of the Day:
Gilead Sciences is aresearch-based biopharmaceutical company that discovers, develops and commercializes innovative medicines in areas of unmet medical need. The company’s portfolio of products and pipeline of investigational drugs includes treatments for HIV/AIDS, hepatitis C virus (HCV), liver diseases, cancer, inflammatory and respiratory diseases, and cardiovascular conditions.
Mixed Q4 Results
Adjusted earnings of $1.44 per share missed the Zacks Consensus Estimate and is down from $1.78 per reported in the year-ago quarter.
Total revenues of $5.79 billion did beat our consensus but declined 2.6% year-over-year.
Gilead’s HCV portfolio continued to weigh heavily on the company, with sales down almost 51% to $738 million. HCV sales also fell 18% from the previous quarter.
A bright spot for Gilead last quarter, however, was the company’s strong performing HIV pipeline. Sales were up almost 21% year-over-year, with Biktarvy generating sales of $578 million during Q4. Gilead’s TAF-based HIV drugs also did well, and sales for Genvoya, Descovy, and Odefsy all saw double-digit growth.
Analysts have since turned bearish on Gilead, with nine cutting estimates in the last 60 days for the current fiscal year. Earnings are expected to decline for the year, and the Zacks Consensus Estimate has dropped 22 cents during that same time period from $6.87 to $6.65 per share.
This sentiment has stretched into 2020, though the shifting tide hasn’t been as dramatic. Our consensus estimate has dropped five cents in the past two months.
GILD is now a Zacks Rank #5 (Strong Sell).
Shares of the biotech have only returned about 6.3% since January. In comparison, the S&P 500 is up almost 14% year-to-date.
Gilead’s revenue outlook for full-year 2019 hit the biotech hard, and this lowered guidance indicates that this year may not generate the kind of growth investors have been hoping for. Additionally, generic versions of its cardiovascular drugs Letairis and Ranexa are set to enter the U.S. market, which could negatively effect Gilead’s results this year.
But, the company has a huge cash stockpile of $31.5 billion, and new CEO stepping in on May 1, Daniel O’Day. He’s coming from Roche Pharmaceuticals, and it will be interesting to see how he leads Gilead on its oncology-focused journey.
What to Expect from FedEx’s (FDX) Fiscal Q3 Earnings
Shares of FedEx have tumbled nearly 30% in the last year as investors worry that the company might soon face tougher competition from Amazon, as the e-commerce giant races to expand its global shipping business. Now, let’s see what to expect from FedEx’s Q3 fiscal 2019 financial results, which are due out Tuesday, with larger global market conditions possibly trending in the wrong direction for the shipping and logistics powerhouse.
FedEx just recently announced that Don Colleran will take over as president and CEO of FedEx Express. The news comes as the company tries to revamp its express business amid a slowdown. FedEx announced a voluntary buyout program for some U.S. workers late last year, along with international network capacity reductions at FedEx Express, and other cost-saving measures. “Global trade has slowed in recent months and leading indicators point to ongoing deceleration in global trade near-term,” FedEx CFO Alan Graf said in a company statement last quarter.
“These trends, coupled with the change in service mix at FedEx Express, are negatively impacting the segment’s financial results. We remain committed to actively managing costs with a heightened focus on increasing efficiency across the organization.”
Q3 Outlook & Earnings Trends
Moving on, our current Zacks Consensus Estimate calls for FedEx’s Q3 fiscal 2019 revenue to pop 7% and reach $17.68 billion. Investors should note that this would represent a slowdown from last quarter’s 9% top-line expansion. Meanwhile, the company’s full-year revenue is expected to jump 8.4% to hit $70.92 billion.
At the bottom end of the income statement, FedEx’s adjusted quarterly earnings are projected to plummet 16.67% to touch $3.10 a share. Jumping a bit further ahead, the company is expected to see its fourth-quarter 2019 EPS figure sink nearly 12%
On top of that, FedEx’s Q3 earnings consensus estimate has fallen by nearly 19% from $3.81 a share before the period got underway to its current $3.10. The company has also experienced some negative earnings estimate revision activity recently.
FedEx is a Zacks Rank #3 (Hold) at the moment that sports an “A” grade for Value and a “B” for Growth in our Style Scores system. FedEx is scheduled to release its third-quarter fiscal 2019 financial results after the closing bell on Tuesday, March 19. So, make sure to come back to Zacks for a full breakdown of FDX’s actual quarterly results.
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