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Home Depot, Bally's, Delta Air Lines, United Airlines, American Airlines highlighted as Zacks Bull and Bear of the Day

Home Depot, Bally's, Delta Air Lines, United Airlines, American Airlines highlighted as Zacks Bull and Bear of the Day

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This story originally appeared on Zacks

For Immediate Release

Chicago, IL – November 24, 2021 – Zacks Equity Research Shares of The Home Depot, Inc. HD as the Bull of the Day, Bally's Corporation BALY as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Delta Air Lines, Inc. DAL, United Airlines Holdings, Inc. UAL, American Airlines Group Inc. AAL.

Here is a synopsis of all five stocks:

- Zacks

Bull of the Day:

There is nothing that can rocket a stock into the stratosphere like an earnings report. A big beat and you are an instant rock star. Have a history of big beats and you become a thing of legend. Today’s Bull of the Day is already a legend. It’s a stock I’m sure all of you know and a store that you have all been to. Heck, my parents go there just to walk around and stare at stuff to buy. Yes, it’s their favorite pass-time.

I am talking about Zacks Rank #1 (Strong Buy) Home Depot. The Home Depot, Inc. operates as a home improvement retailer. It operates The Home Depot stores that sell various building materials, home improvement products, building materials, lawn and garden products, and decor products, as well as provide installation, home maintenance, and professional service programs to do-it-yourself and professional customers. 

Last quarter’s 51-cent upside surprise for Home Depot was the latest in a long line of earnings beats. Over the last four quarters alone, the company has beat earnings by an average of 39-cents or 12.09%. The upside surprise caused analysts to take note and shift their earnings estimates.

Home Depot is in the Building Products – Retail industry, which ranks in the Top 6% of our Zacks Industry Rank. The stock is currently a Zacks Rank #1 (Strong Buy) because of the series of earnings estimate revisions coming from analysts all over Wall Street.

Over the last week alone, twelve analysts have increased their earnings estimates for Home Depot’s current year and next year. The bullish sentiment pushed up our Zacks Consensus Estimates for the current year from $14.46 to $15.42 while next year’s number is up from $15.05 to $16.06. Current year EPS growth is forecast to come in at 28.1% while next year’s number is expected to slow to 4.13%. That’s on revenue growth of 13.3% for this year and 1.4% for next year.

Bear of the Day:

There are a handful of industries out there that I have flat out been cheering for. These are industries which were nearly crippled during the pandemic. As the world has slowly and cautiously crawled from beneath the weight of COVID, these industries have mounted comebacks. Along with the comebacks, earnings expectations have returned. That means these stocks better deliver the goods, or else. Analysts will see disappointing results as opportunities to drop their ratings and cut earnings estimates.

One way to uncover stocks with estimates moving in the wrong direction is by using the Zacks Rank. Stocks which are not in the good graces of the Zacks Rank will have the weakest earnings trends. Analysts will be cutting their estimates rather than pushing them to the upside.

Today’s Bear of the Day is a stock in the Hotels and Motels industry which ranks in the Bottom 34% of our Zacks Industry Rank. It’s Zacks Rank #5 (Strong Sell) Bally’s. Bally's Corporation owns and operates gaming and racing facilities in the United States. Its gaming and racing facilities include slot machines and various casino table games, and restaurant and hotel facilities. 

Analysts have been lowering the bar for Bally’s. That is the main reason for the unfavorable Zacks Rank. Over the last sixty days, three analysts have cut expectations for the current year while next year two have cut and one has raised. The bearish sentiment has dropped our Zacks Consensus Estimate for the current year from $3.00 all the way down to $1.48 while next year’s number is off from $3.81 to $2.30.

The growth numbers for Bally’s are still optimistic even with the negative moves. Current year EPS growth still calls for 922%, albeit that is a misleading comparison given the pandemic’s impact. Next year, the company is forecast to deliver 55% growth. A good move in a positive direction as well. Sales growth this year is forecast at 263% while next year is slated to bounce up to 97%.

Additional content:

Here's Why Airlines Are Betting on Busy Thanksgiving Traffic

The resurgence of COVID-19 cases and renewed restrictions in some parts of Europe, in addition to the rise in pandemic-led hospitalizations in a few sections of the United States dampened the airline stocks. However, we expect the U.S. airline stocks to recover and perform well in Thanksgiving week. The anticipated travel surge during Thanksgiving week is likely to bolster the top lines of airlines like Delta Air LinesUnited AirlinesAmerican Airlines among others and aid their recovery process.

Let’s delve deeper.

It is no longer news that airlines were hit hard in 2020, with passenger revenues shrinking drastically due to COVID-19. However, things improved in the current year. The latest example in this regard is the performance of airlines in the recently concluded third quarter of 2021. In the said period, passenger revenues of most airlines improved significantly year over year as more and more people are again opting for air travel armed with vaccination.

The northbound air-travel demand is likely to get a further boost in the Thanksgiving holiday period. That traffic will be significant in the period can be made out from the U.S. Transportation Security Administration’s (TSA) forecast that it expects to screen about 20 million passengers during the Thanksgiving holiday period (Nov 19-Nov 28).

The enthusiasm can be gauged from the commentary of TSA’s administrator David Pekoske who said that “We anticipate that travel may be very close to pre-pandemic levels this holiday, and we are staffed and prepared for the holiday travelers. We have deployed technologies that enhance detection capabilities and reduce physical contact, and it’s equally important that passengers are prepared with travel tips for the most efficient checkpoint experience,” said TSA. In the event of passenger volumes actually touching the anticipated highs, the top line of U.S. airlines is likely to improve even further in the December quarter.

Airlines are gearing up to meet the anticipated demand surge. The carriers are also hoping for the weather to remain favorable, which will allow more and more people to opt for air travel.

Delta, currently carrying a Zacks Rank #4 (Sell), expects to transport up to 5.6 million passengers during the Thanksgiving period. The projection implies a significant increase from the actual number of passengers (2.2 million) flown by DAL over the Thanksgiving period last year. With friends, families and relatives expected to connect at this time of the year, leisure travel is expected to get a huge boost.

To drive operations during the busy spell, Delta made additional hirings in customer service and reservations. DAL also reinforced its strength concerning flight attendants to meet the anticipated spurt in the number of flights in operation. The elevated passenger volume during the period is likely to perk up its top line that increased more than 100% year over year in third-quarter 2019.

United Airlines, currently carrying a Zacks Rank #3 (Hold), expects to ferry more than 4.5 million passengers during the Thanksgiving travel phase. The forecast turns out to be roughly 88% of passengers transported by UAL in 2019 (pre-coronavirus era). UAL is expanding its domestic network by 700 flights during Thanksgiving week. By doing so, the airline aims to operate around 87% of its 2019 domestic schedule.

You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

United Airlines’ CEO Scott Kirby is very confident of meeting the anticipated surge in travel volume this Thanksgiving week. UAL expects to fly maximum passengers (since the commencement of the pandemic) on the Sunday following Thanksgiving. The likely upbeat passenger volume over the Thanksgiving period is expected to aid UAL’s passenger revenues that increased more than 300% year over year in the third quarter of 2021.

American Airlines, currently carrying a Zacks Rank of 4, did not provide any Thanksgiving projection with respect to passenger volumes unlike Delta and United Airlines. This might be due to the carrier’s multiple flight cancellations of late, compelled by headwinds like unfavorable weather and shortage of staff.  Per AAL’s CEO Doug Parker, “It’s going to be a busy holiday season. We’re ready for it.”

To manage the likely buoyant demand during the holidays, American Airlines took various measures like offering bonuses to its staff. Reportedly, AAL is offering its flight attendants 50% higher pay for working on holiday trips. Despite the headwinds, AAL aims to operate 5,000 flights a day during the Thanksgiving week. The anticipated schedule is only 8% below the capacity recorded two years ago during the same time period.

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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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Delta Air Lines, Inc. (DAL): Free Stock Analysis Report

 

United Airlines Holdings Inc (UAL): Free Stock Analysis Report

 

The Home Depot, Inc. (HD): Free Stock Analysis Report

 

American Airlines Group Inc. (AAL): Free Stock Analysis Report

 

Bally's Corporation (BALY): Free Stock Analysis Report

 

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