Chicago, IL – March 18, 2024 – Zacks Equity Research shares Griffon GFF as the Bull of the Day and AirSculpt Technologies AIRS as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Matador Resources Co. MTDR, ConocoPhillips COP and Marathon Oil Corp. MRO.
Here is a synopsis of all five stocks.
A little bit of a pause in the bull run last week left investors uneasy over the weekend. There is a way to find long-term solace in your investments. One way, is to find stocks that have the strongest earnings trends. While price momentum comes and goes, shifts on a dime, earnings trends tend to stay in place for much longer. The best way to find stocks with the most consistent earnings trends is by leaning on the Zacks Rank.
Today’s Bull of the Day is in the good graces of our Zacks Rank. It’s Zacks Rank #1 (Strong Buy) Griffon. Griffon is a diversified management and holding company. Griffon conducts business in three segments; Home & Building Product, Telephonics and Clopay Plastic Products.
The company is currently a Zacks Rank #1 (Strong Buy) in the Diversified Operations industry which ranks in the Top 21% of our Zacks Industry Rank. In addition to the favorable rank, the stock enjoys a Zacks Value Style Score of B, Growth of A and Momentum of C to help it round out with a VGM Composite Score of A.
The reason for the favorable bank stems from the last earnings report causing a host of earnings estimate increases. Last quarter’s EPS number came in 29 cents better than expectations, besting the number by 37%. It was the latest in a line of beats going back the last year. The company has beat by an average of 34 cents a quarter over the last year. Incredible to see.
This prompted analysts to up the ante on current year and next year estimates. The bullish moves have pushed up our Zacks Consensus Estimates for the current year from $4.62 to $4.80 while next year’s number is up from $5.56 to $5.97.
When the market is hot, you feel like you can do no wrong. Then, there’s a little hiccup and you quickly see how things can go South in a hurry. It’s important to know the fundamentals when you’re looking at longer-term investment ideas. Stocks with strong earnings trends are essential over the long run. At the end of the day, stocks really are a function of their earnings.
At Zacks, stocks which are Zacks Rank #5 (Strong Sell) stocks are those with the weakest earnings trends. It’s important to understand why estimates are moving in the wrong direction if you’re holding onto a stock in this range.
Today’s Bear of the Day is Zacks Rank #5 (Strong Sell) AirSculpt Technologies. AirSculpt Technologies, Inc., together with its subsidiaries, focuses on operating as a holding company for EBS Intermediate Parent LLC that provides body contouring procedure services in the United States. The company offers AirSculpt, a next-generation body contouring procedure that removes unwanted fat and tightens skin in a minimally invasive procedure. It also provides AirSculpt+, a procedure that permanently removes fat and tightens the skin with unparalleled precision and finesse; and AirSculpt Smooth, an advanced cellulite removal tool.
The reason for the unfavorable Zacks Rank is that recent earnings estimate revisions have been moving in the negative direction. Current year Zacks Consensus Estimates are off rom 51 cents to 48 cents for the current year while next year’s number is off from 63 cents to 61 cents over the last thirty days. Two analysts have come out and cut those numbers.
It’s not all doom and gloom for AIRS though. Even with those negative moves, current year EPS growth is forecast to come in at 71.43% with next year’s number at 26.04%. That’s on revenue growth of 11.82% this year and 15.01% next year.
We have AirSculpt in the Technology Services industry which ranks in the Top 35% of our Zacks Industry Rank.
The current high oil price, stemming from the International Energy Agency's upward adjustment of its oil demand forecasts for this year and an unexpected decline in U.S. inventories, is prompting increased exploration and production activities. Consequently, companies in the upstream sector are expected to expand their operations in profitable shale resources, resulting in a rise in the number of drilling rigs. This uptick in drilling activity is forecast to enhance production, offering benefits for businesses involved in exploration and production.
West Texas Intermediate crude price has touched $80 per barrel, which is highly favorable for exploration and production activities. In its short-term energy outlook, the U.S. Energy Information Administration (EIA) projected the average spot price of West Texas Intermediate crude at $82.15 per barrel this year, an extremely promising price for upstream operations.
In March, total oil production from shale resources in the United States will likely increase by 20,000 barrels per day to 9,716 thousand barrels per day (MBbl/D), per EIA. The shale resources comprise Anadarko, Appalachia, Bakken, Eagle Ford, Haynesville, Niobrara and Permian.
Of all the resources, Eagle Ford will witness the second-highest increase in daily oil production, after Permian, this month, according to the EIA’s drilling productivity report. In the Eagle Ford, the EIA projects oil production to rise by 5,000 barrels per day to 1,145 MBbls/D this month.
It has been apparent that a favorable crude pricing scenario is backing higher production volumes. Improving Eagle Ford production amid healthy oil prices raised the incentive to keep an eye on companies like Matador Resources Co., ConocoPhillips and Marathon Oil Corp. operating in the prolific shale play. All the stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Matador Resources’ principal operating areas comprise Eagle Ford shale, where its presence is spread across 12,100 net acres. The majority of the company’s production from the resource comprises oil and is thus well positioned to gain from the handsome price of the commodity.
ConocoPhillips has a strong footprint in key resources in the United States. This comprises Eagle Ford resources which was responsible for producing 211 thousand barrels of oil equivalent production per day in the fourth quarter of 2023.
In the Eagle Ford, Marathon Oil has been operating since 2011. The company allocated a significant proportion of its capital budget for this year toward prolific resources. In the fourth quarter of 2023, Marathon Oil produced 144,000 net barrels of oil equivalent per day from Eagle Ford shale play.
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ConocoPhillips (COP) : Free Stock Analysis Report
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Matador Resources Company (MTDR) : Free Stock Analysis Report
Griffon Corporation (GFF) : Free Stock Analysis Report
AirSculpt Technologies, Inc. (AIRS) : Free Stock Analysis Report
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