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Callaway Golf, Avis Budget Group, Netflix, IBM and Amazon highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – April 19, 2016– Zacks Equity Research highlights Callaway Golf (ELY) as the Bull of the Day and Avis Budget Group (CAR) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Netflix (NFLX), IBM (IBM) and Amazon (AMZN).

Here is a synopsis of all five stocks:

Bull of the Day :

I won’t lie to you, I’m not much of a golfer. In the past I’ve dabbled a bit but over the last five years or so I could probably count on one hand how many times I’ve been out on the course. I really use it as an excuse to putt around in a golf cart and yell at my friends. Then you get the smack the heck out of that little ball several times which I find very relaxing. Even if I’m slicing the thing two holes over. Needless to say, I yell “Fore” a whole lot.

So far, today’s Bull of the Day, Zacks Rank #1 (Strong Buy) Callaway Golf (ELY) has been nailing it right down the fairway. Callaway Golf, together with its subsidiaries, designs, manufactures and sells golf clubs, golf bags, and other golf-related accessories. The company designs and sells under the Callaway Golf, Odyssey and Strata brand names.

Callaway Golf is in the Leisure and Recreation Products industry currently ranked in the Top 17% of our Zacks Industry rank. Several strong stocks appear in this industry including Zacks Rank #2 (Buy) Brunswick and Smith & Wesson. Callaway is rocking a VGM score of B thanks to a Growth Style Score of A and a Momentum Score of B.

A big reason for the rank is the recent earnings estimate revision to the upside for next quarter as well as the current year. The bullish sentiment may be a result of several recent earnings surprises for the stock. Callaway has a six quarters of consecutive earnings beats. The last four earnings beats have come in at an average of 6 cents each time. Last quarter’s 3 cent beat was the smallest of the bunch. This current quarter, investors are looking for 37 cents EPS.

Bear of the Day:

One of the great things about the American economy is its ability to change and adapt to new challenges and opportunities. Sometimes businesses get left behind. Sometimes it's because of a myopic game plan from the top. Other times it's a massive shift in supply that's the driving force behind it. With the availability of ride sharing programs like Uber and Lyft around the country and the world, it's getting tougher for traditional businesses inside the world of transportation to thrive. Add to that, start ups that let you rent cars from strangers like a AirBnB on wheels, and you can see that the demand for traditional car rentals may be slowing a bit.

That's not to say that these companies are going by the wayside. But the pressure on the demand side of the equation certainly isn't helping the Zacks Rank for these companies. One of the companies struggling here with a Zacks Rank #5 (Strong Sell) is Avis Budget Group (CAR).Avis Budget Group, together with its subsidiaries, provides car and truck rentals to consumers worldwide. It operates the Avis car rental system with approximately 5,550 locations and Budget which has over 3,900 locations.

Avis has been trying to adapt to the changing business environment through its Zipcar car-sharing platform. Zipcar is a membership-based car sharing network that provides vehicles to approximately 1 million members. Think of it as having a car on demand. For a monthly fee, customers are able to access vehicles to run errands. Zipcar has multiple drop-off locations throughout many large urban areas. It's one way that Avis is trying to adapt with the changing times.

A big reason for the Zacks Rank is the recent downside earnings estimate revisions. Four analysts have dropped their estimates for the current year while three have done so for next year. The bearish sentiment has pushed down our Zacks Consensus Estimate from $3.59 to $3.06 for the current year while dropping next year's numbers from $3.87 to $3.43. Even more chilling is the most recent earnings estimate revision is calling for a 12 cent loss this quarter while the consensus sits at a 5 cent loss. That's a major factor in determining the Zacks Rank.

Additional content:

Netflix, IBM Report Q1 Earnings, Shares Tumble

After the bell Monday as Q1 earnings season begins to hit its stride, Netflix (NFLX) and IBM (IBM) both reported earnings. Both companies beat on the bottom line, but don’t have the spike in after-market trading to go along with it. In fact, NFLX shares have taken a big fall.

Netflix reported 6 cents per share in the Q1 of 2016 on revenues of $1.96 billion. This doubles expectations on the bottom line of 3 cents per share, and also beat the $1.95 billion on the top line. Yet the stock is falling sharply in after-hours trading — down 11.7 percent at this hour — based on lower subscriber growth projections. IBM beat on the bottom line easily: $2.35 vs. $2.09, and revenues also outperformed — $18.7 billion vs. $18.3 billion expected — but guidance stayed flat.

In Netflix’s case, while Q1 subscribers were slightly higher than expected, the increase in subscription fees — including ending the grandfathering of early Netflix subscribers so that they, too, will pay the higher rate of $9.99 per month — has dampened expectations looking forward. In addition, Netflix plans to spend $5 billion in content for fiscal 2016, but $6 billion for next fiscal year.

Finally, competition from companies like Amazon (AMZN) Prime are going to keep Netflix’s feet to the fire on content offering, prices and global reach. Netflix has been a fast-growing stock of late, but currently holds aValue score of F, Growth score of F, Momentum score of A and VGM of F. Tough crowd — all Netflix managed to do was bring in a higher subscriber rate than expected, only to see its stock tank, near term.

IBM, on the other hand, topped on both top and bottom lines — and handily — but shares have also fallen in late trading. A 16.3 percent positive earnings surprise and a 2.2 percent beat on revenues were not enough to buoy shares in late trading. This is directly related to the company’s in-line guidance, which investors expected to rise following such a nice top and bottom beat.

Prior ro the earnings report, IBM held a Value score of A, Growth of C, Momentum of D and overall VGM of B. We shall see if analyst revisions push these values in the coming days following Q1 results.

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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.

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CALLAWAY GOLF (ELY): Free Stock Analysis Report
 
AVIS BUDGET GRP (CAR): Free Stock Analysis Report
 
AMAZON.COM INC (AMZN): Free Stock Analysis Report
 
INTL BUS MACH (IBM): Free Stock Analysis Report
 
NETFLIX INC (NFLX): Free Stock Analysis Report
 
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