Interactive Brokers and Cracker Barrel Old Country have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – May 29, 2024 – Zacks Equity Research shares Interactive Brokers Group IBKR as the Bull of the Day and Cracker Barrel Old Country Store CBRL as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Atmos Energy Corporation ATO, Ecolab Inc. ECL and Walmart Inc. WMT.
Here is a synopsis of all five stocks:
Bull of the Day:
Interactive Brokers Group operates as an automated global electronic market maker and broker. Analysts have positively revised expectations across the board, landing the stock into a Zacks Rank #1 (Strong Buy).
In addition to favorable earnings estimate revisions, the stock resides in the Zacks Financial – Investment Bank industry, currently ranked in the top 4% of all Zacks industries (11/250). Let's take a closer look at how the company currently stacks up.
Interactive Brokers
IBKR shares have been notably strong year-to-date, gaining +55% compared to the S&P 500's impressive +12% gain. The company's latest set of quarterly results brought post-earnings positivity, with it exceeding both earnings and revenue expectations.
The results snapped a streak of mixed earnings results, with earnings and revenue growing by 21% and 25%, respectively.
IBKR's revenue growth has remained strong, with the company posting double-digit percentage year-over-year sales growth rates in each of its last seven periods.
In addition, investors stand to reap a passive income from IBKR shares, which currently yield a modest 0.3% annually. While the current yield is a tad underwhelming, the company boosted its quarterly payout by 150% following the release of its latest quarterly results, reflecting a shareholder-friendly nature.
The company maintains a bright growth outlook for its current fiscal year, with Zacks Consensus estimates suggesting a 13% boost in earnings on a 10% sales increase.
Bottom Line
Investors can implement a stellar strategy to find expected winners by taking advantage of the Zacks Rank – one of the most powerful market tools that provides a massive edge.
The top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.
Interactive Brokers would be an excellent stock for investors to consider, as displayed by its Zack Rank #1 (Strong Buy).
Bear of the Day:
Cracker Barrel Old Country Store owns and operates full-service dining locations with a restaurant and a retail store in the same unit. Analysts have taken a bearish stance on the company's outlook, pushing it down into an unfavorable Zacks Rank #5 (Strong Sell).
In addition, the company is in the Zacks Retail – Restaurants industry, which is currently ranked in the bottom 24% of all Zacks industries.
Let's take a closer look at the company.
Cracker Barrel
CBRL shares haven't fared well year-to-date, down 37% and widely underperforming relative to the general market. Shares faced pressure following its latest set of quarterly results despite posting numbers that exceeded expectations.
The adverse price action has bumped up CBRL's annual dividend yield, currently paying a sizable 11.4% annually. Still, the company's 107% payout ratio remains a concern, reflecting that it's paying more out to shareholders than earnings generated.
The company has primarily posted mixed earnings results as of late, falling short of the Zacks Consensus EPS Estimate by an average of -7.7% across its last four releases.
Keep an eye out for the company's upcoming quarterly release expected on May 30, as current consensus expectations allude to a 53% pullback in earnings on -0.7% lower sales. Revenue expectations have moved downward alongside earnings expectations, with the $827 million expected down 1.4% since the beginning of March.
Bottom Line
Negative earnings estimate revisions from analysts and mixed quarterly results paint a challenging picture for the company's shares in the near term.
Cracker Barrel Old Country Store is a Zacks Rank #5 (Strong Sell), indicating that analysts have taken a bearish stance on the company's earnings outlook.
For those seeking strong stocks, a great idea would be to focus on stocks carrying a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy) – these stocks sport a notably stronger earnings outlook paired with the potential to deliver explosive gains in the near term.
Additional content:
3 Top Dividend Aristocrats to Ride Out Summertime Blues
Incisive investors should look out for breakout stocks to get unmatched returns. However, stocks mostly trade within a narrow range during the summer months. Profit-taking does take place in the weaker period from May through October, particularly after an incomparable November to April.
The broader S&P 500, since 1928, has posted a paltry average gain of 2.1% from May to October, less than the 5.2% gain from November to April, per Dow Jones Market Data. The "Sell in May & Go Away" thesis, in reality, suggests that investors should refrain from putting money in the equity market during the moribund summer months.
Wall Street, regrettably, is bracing for upheavals as the Federal Reserve officials recently sounded hawkish. The Fed is expected to hold record-high interest rates higher for longer. The minutes from the central bank's Apr 30-May 1 session showed that officials did agree that price pressures have declined but haven't fallen as quickly as anticipated.
Inflation continues to be above the Fed's long-term goal. Some Fed officials expect the central bank to hike interest rates if required. Fed Governor Christopher Waller said that the central bank needs more convincing data that inflation is ebbing, before agreeing to trim interest rates.
What's more, a batch of strong economic data dampened expectations of an interest rate cut soon. S&P Global said that both the manufacturing and service sides of the economy expanded in May. At the same time, weekly jobless claims receded, a tell-tale sign that companies haven't increased the pace of layoffs.
Market participants are now assuming the Fed to cut interest rates in September and not in July. In fact, less than 50% of market pundits expect the Fed to trim interest rates by a quarter-point at its September meeting, according to the CME FedWatch Tool. Now, elevated interest rates don't bode well for the economy vis-à-vis the stock market. This is because it curtails consumer outlays and increases borrowing costs.
Hence, with things looking dicey for the stock market, investors should double down on dividend aristocrats such as Atmos Energy Corporation, Ecolab Inc. and Walmart Inc.. These stocks have better financial structure and a stable business model, which keep them insusceptible to any market vagaries. These stocks possess a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here.
Atmos Energy is engaged in the regulated natural gas distribution business. Atmos Energy is known for having raised its dividend for 40 years.
Atmos Energy has a dividend yield of 2.86%. ATO's payout ratio presently sits at 48% of earnings. ATO's payout has advanced by 9.1% in the past five years. Check Atmos Energy's dividend history here.
The Zacks Consensus Estimate for its current-year earnings has increased 0.9% over the past 60 days. The company's expected earnings growth for the current year is 9%.
Ecolab is a sustainability provider offering infection prevention solutions. Ecolab has raised its dividend for over 30 years.
Ecolab has a dividend yield of 0.97%. ECL's payout ratio presently sits at 40% of earnings. ECL's payout has increased by 4.4% in the past five years. Check Ecolab's dividend history here.
The Zacks Consensus Estimate for its current-year earnings has increased 2.7% over the past 60 days. The company's expected earnings growth for the current year is 26.5%.
Walmart engages in retail and wholesale operations. WMT first paid its dividend in 1974. The company has raised its dividend for 51 years in a row.
Walmart has a dividend yield of 1.27%. WMT's payout ratio presently sits at 36% of earnings. WMT's payout has advanced by 1.8% in the past five years. Check Walmart's dividend history here.
The Zacks Consensus Estimate for its current-year earnings has increased 2.1% over the past 60 days. The company's expected earnings growth for the current year is 8.6%.
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Cracker Barrel Old Country Store, Inc. (CBRL) : Free Stock Analysis Report
Ecolab Inc. (ECL) : Free Stock Analysis Report
Walmart Inc. (WMT) : Free Stock Analysis Report
Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report
Atmos Energy Corporation (ATO) : Free Stock Analysis Report
