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Netflix, Chuy's Holdings, IBM , CSX Corp. and United Continental highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – July 19, 2017 –Zacks Equity Research highlightsNetflix (NASDAQ: NFLX Free Report) as the Bull of the Day Chuy’s Holdings (NASDAQ: CHUY Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on from IBM Corp. (NYSE: IBM Free Report), CSX Corp. (NASDAQ: CSX Free Report) and United Continental (NYSE: UAL Free Report).

Here is a synopsis of all five stocks:

Bull of the Day :

A big winner early on in this earnings season is clearlyNetflix (NASDAQ: NFLX Free Report). One of the original four members of the band “FANG” Netflix has re-established itself as one of the premier tech names in the market place. While your binge-watching sprees likely have little to do with the move, you can attribute a chunk of the move to people’s affinity for Netflix originals. Seeing the stock as a Zacks Rank #1 (Strong Buy) I couldn’t resist naming it today’s Bull of the Day.

For those of you who have been living under a rock the last several years, Netflix,an Internet television network, engages in the Internet delivery of television (TV) shows and movies on various Internet-connected screens. It operates in three segments: Domestic Streaming, International Streaming, and Domestic DVD. The company offers TV shows and movies, including original series, documentaries, and feature films. It offers members with the ability to receive streaming content through a host of Internet-connected screens, including TVs, digital video players, television set-top boxes, and mobile devices. The company also provides DVDs-by-mail membership services.

Streaming obviously makes up a sizable chunk of Netflix’s revenue. Can you believe there are still people loading up DVDs and sending them off in the mail? (UPDATE: My sister did in fact finally upgrade to streaming. Yes, her TV is an awesome new flat screen but she has TiVo…) Netflix subscribers love the exclusive content from Netflix Originals.

Revenue growth for the upcoming quarter is slated to come in at 25.55%, while the next quarter is looking like 21.37% growth. This pegs current year revenue growth at 27.8% and next year’s at 20.12%. EPS growth is likely to be much stronger. Based on current EPS estimates from analysts, Netflix is looking at 83.89% EPS growth for next quarter with the current year number rounding out at 144.87%. Next year analysts are expecting EPS 85.36% higher than this year.

Bear:

Sometimes you’re the windshield, sometimes you’re the bug. That’s just how it goes in the stock market. The hottest industries can become a wasteland at the drop of a dime. Today’s Bear of the Day is a stock that was red hot in one of the hottest industries in the stock market, the restaurants. As things have cooled down for the industry, this stock has gone ice cold. I’m talking about Chuy’s Holdings (NASDAQ: CHUY Free Report).

Chuy’s Holdings, Inc., through its subsidiary, Chuy’s Opco, Inc., owns and operates restaurants under the Chuy’s name in Texas and 16 states in the Southeastern and Midwestern United States. The company’s restaurants provide Mexican and Tex Mex inspired food. As of February 28, 2017, it owned and operated 82 full-service restaurants in 16 states.

Trust me, I love Tex Mex as much as the next guy but I don’t love stocks where analysts are slicing up earnings estimates. It’s not just happening here at Chuy’s though. The entire industry is now in the Bottom 27% of our Zacks Industry Rank. That means that several restaurant stocks are seeing their estimates slashed, not just Chuy’s.

The downside has been painful for Chuy’s as current quarter EPS estimates have dropped from 36 cents to 31 cents for the current quarter. This bearish behavior has also impacted current year and next year EPS numbers. While current year numbers have dropped from $1.13 to $1.09, next year’s number has plummeted from $1.25 to $1.16. That means virtually no EPS growth from this year to next year. These negative estimate revisions are the reason for the Zacks Rank #5 (Strong Sell) rating.

Additional content:

Q2 After Tuesday’s Close: IBM Misses Revs, CSX & United Beat

After yesterday's market close, we saw another group of prominent S&P 500 companies reporting Q2 earnings. Results from IBM Corp. (NYSE: IBM Free Report), CSX Corp. (NASDAQ: CSX Free Report ) and United Continental (NYSE: UAL Free Report) were among the headline-takers.


Transformation struggles for IBM continue. Shares of the tech major beat estimates on the bottom-line from $2.73 per share expected to $2.97 reported today. But revenues of $19.3 billion missed the $19.46 billion in the Zacks consensus estimate. This marks the 21st straight quarter of declining revenues for Big Blue. That said, the company affirmed fiscal year guidance of $13.80 per share. This would require a strong second-half of 2017 for IBM.

Locomotive, shipping and logistics firm CSX posted impressive results for its Q2: earnings of 64 cents per share easily topped the 59 cents expected, which itself demonstrated nearly 25% year over year growth. Revenues of $2.93 billion also topped estimates. Further, the company announced a new $500 million share buyback program. The lauding of Hunter Harrison as a railroad wunderkind continues.

United Continental, enduring a quarter with plenty of negative press regarding an on-plane incident (or three) this past spring, managed to post a positive surprise on both top and bottom lines: $2.75 per share beat the Zacks consensus by a dime, and revenues of $10.0 billion beat the $9.96 billion expected. PRASM (which had been reported prior to today's earnings report) was in-line for the quarter, as were margins overall, but United shares are selling on the news. The stock had been up 9% year to date.

 

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.

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Netflix, Inc. (NFLX): Free Stock Analysis Report
 
Chuy's Holdings, Inc. (CHUY): Free Stock Analysis Report
 
International Business Machines Corporation (IBM): Free Stock Analysis Report
 
CSX Corporation (CSX): Free Stock Analysis Report
 
United Continental Holdings, Inc. (UAL): Free Stock Analysis Report
 
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