Chicago, IL – April 4, 2025 – Zacks Equity Research shares Alibaba BABA as the Bull of the Day and KB Home KBH as the Bear of the Day. In addition, Zacks Equity Research provides analysis on ExxonMobil XOM, Chevron CVX and Devon Energy DVN.
Here is a synopsis of all five stocks:
Liberation Day gave way to Armageddon as markets sold off considerably Thursday. Large retaliatory tariffs against nearly every US trading partner caused the dramatic dump. At the center of this fight has always been China. During the 2nd Trump Administration, it feels like Canada and Mexico are the principle targets. Surprisingly, one Chinese company has really outperformed to start this year. With the selling, it has retraced to strong technical support at the 50-day and is looking to go higher.
That stock is today's Bull of the Day, Alibaba. Alibaba Group Holding Limited, through its subsidiaries, provides technology infrastructure and marketing reach to help merchants, brands, retailers, and other businesses to engage with their users and customers in the People's Republic of China and internationally. The company operates through seven segments: China Commerce, International Commerce, Local Consumer Services, Cainiao, Cloud, Digital Media and Entertainment, and Innovation Initiatives and Others.
The reason for the favorable Zacks Rank is that two analysts have increased their earnings estimates for the current year and next year. The bullish moves have pushed up our Zacks Consensus Estimate for the current year from $8.72 to $8.80 while next year's number is up from $10.24 to $10.83.
That puts current year earnings growth at just 2.09%, but that number does swell to 23% next year. That's on revenue growth of 5.97% this year and 6.55% next year. The recent resurgence of Alibaba stock can be attributed to these bumps in earnings estimates. A quick look at the Price, Consensus and EPS Surprise Chart shows the big move in earnings. These started mid-2024. A couple of back-to-back earnings beats helped the stock regain its grip on $100. The most recent pullback has the stock down from $148 to the 50-day moving average near $129.
Markets are trying to digest the new American order of tariffs across the globe. It's led to some stocks getting absolutely demolished, while others actually stand to gain. There are some areas of the market that had been grappling with economic headwinds well before these tariffs were announced. One stock that's wrestling with these headwinds is today's Bear of the Day, KB Home.
KB Home operates as a homebuilding company in the United States.It builds and sells a variety of homes, including attached and detached single-family residential homes, townhomes, and condominiums primarily for first-time, first move-up, second move-up, and active adult homebuyers.
Over the course of last thirty days, four analysts have cut their earnings estimates for the current year and next year. That bearish behavior is the reason that the stock is currently a Zacks Rank #5 (Strong Sell). It's also caused our Zacks Consensus Estimate to come down from $9.02 to $7.61 for the current year. Next year's number has come down from $10.70 to $8.17. That means that current year earnings are set to contract by 9.94%. That's on a flat revenue number of $6.93 billion this year.
CEO Jeffrey Mezger attributed the downturn to consumers grappling with affordability concerns and uncertainties related to macroeconomic and geopolitical issues, resulting in a more cautious approach to homebuying decisions. This hesitancy was evident during the typically robust spring selling season, which saw muted demand despite healthy traffic in KB Home communities.
KB Home is in the Building Products – Home Buildings industry which ranks in the Bottom 17% of our Zacks Industry Rank.
The latest round of tariffs announced by President Donald Trump shook global markets, reigniting concerns about an economic downturn. Trump's stance includes a 10% baseline tariff on most U.S. imports, with increased duties on major trade allies, including China and the EU. This policy shift has already sent ripples through the commodities market, driving down oil, copper, and agricultural prices as worries about weaker global demand mount
However, amid all this economic uncertainty, the energysector has proven to be a standout performer. While broader equity markets, including the S&P 500, have stumbled, falling more than 4% year to date, the energy sector has remained resilient, posting gains of around 10% in 2025. This impressive performance highlights the strength of energy stocks like ExxonMobil, Chevron and Devon Energy, which have shown remarkable stability in an otherwise turbulent market.
While the tariffs could weigh on global economic activity and reduce oil demand, they also have the potential to tighten supply. Trump's warning of additional sanctions on nations buying Venezuelan crude could tighten global oil supply even further. Venezuela's oil exports are already under pressure due to the ongoing U.S. sanctions, but any additional restriction on buyers could push supply down even further.
Iran, too, remains under the United States' "maximum pressure" campaign, with sanctions continually expanding to limit its oil trade. These geopolitical hurdles, along with the latest restrictions on Russian oil exports, further complicate the global energy landscape. The outcome is a potentially optimistic scenario for crude oil, which is currently holding steady at a relatively healthy $70 per barrel.
Investors searching for stability should recognize that energy has been one of the few bright spots in the market. While this year has seen inflationary pressures and recession fears battering the tech and consumer sectors, major energy stocks have emerged as a safe haven for investors. This outperformance can be attributed to disciplined capital spending, increased shareholder returns, and the sector's ability to navigate geopolitical uncertainties better than most industries.
Although tariffs raise concerns about slowing growth, oil companies continue to benefit from tight supply fundamentals. The OPEC cartel remains cautious with production increases, and with major producers like Russia and Venezuela facing constraints, oil prices are likely to remain well-supported in the near term.
For now, energy remains a compelling sector to watch. The geopolitical landscape suggests that supply-side constraints will continue to support oil prices, while major energy firms have proven their ability to weather economic storms. Defensive, dividend-paying energy stocks offer a strong hedge against broader market volatility, making them a worthy consideration for investors seeking stability in these uncertain times. Holding onto stocks like ExxonMobil, Chevron, and Devon Energy in the current environment could be a prudent strategy as global trade tensions evolve. They have delivered year-to-date gains of 10.4%, 15%, and 15.9%, respectively. Notably, each of the three stocks currently carries a Zacks Rank #3 (Hold), reflecting their solid positioning in the energy sector.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
ExxonMobil: It is one of the largest publicly traded oil and gas companies in the world with operations that span almost every corner of the globe. Spring, TX-based ExxonMobil is fully integrated, meaning it participates in every aspect related to energy — from oil production, to refining and marketing. ExxonMobil rewarded investors with record shareholder returns, distributing $36 billion in 2024 through dividends and buybacks. It generated $36.2 billion in free cash flow, enabling these payouts without increasing debt. The company has now increased its annual dividend for 42 consecutive years. Its quarterly cash dividend of 99 cents translates to an annualized yield of 3.3%.
Chevron: Chevron is well-run and historically a profitable big oil giant. Chevron's upstream portfolio remains a key strength, with strong production growth from the Permian Basin and Kazakhstan. The company is targeting a 6% annual production increase through 2026, with high-margin projects driving long-term value. Chevron continues to be a strong dividend player, having increased its payout for 37 consecutive years. The latest dividend hike of 4.9% takes its yield to over 4%, making it a reliable income source for long-term investors.
Devon Energy: Devon Energy is an independent energy company whose oil and gas operations are mainly concentrated in the onshore areas of North America, primarily in the United States. The company's assets are spread across Delaware Basin, Eagle Ford, Anadarko Basin and Powder River Basin. The assets DVN owns have significant long-term growth potential. The company continues to expand its holdings through strategic acquisition. As far as shareholder wealth is concerned, Devon Energy's management raised quarterly dividend by 9% for the first quarter of 2025. The new quarterly rate is 24 cents per share, which yields 2.6%.
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Devon Energy Corporation (DVN) : Free Stock Analysis Report
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KB Home (KBH) : Free Stock Analysis Report
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
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