Chicago, IL – March 28, 2025 – Zacks Equity Research shares Garmin GRMN as the Bull of the Day and e.l.f. Beauty ELF as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Nucor Corp. NUE, Steel Dynamics, Inc. STLD and United States Steel Corp. X.
Here is a synopsis of all five stocks:
Garmin, a current Zacks Rank #1 (Strong Buy), is an original equipment manufacturer of navigation and communication equipment that incorporate the global positioning system (GPS)-based technology.
Analysts have raised their EPS expectations across the board over recent months, a clear bullish sign.
Let's take a closer look at what's been driving the positive sentiment.
Garmin's latest set of quarterly results came in nicely above expectations, exceeding the Zacks Consensus EPS estimate by nearly 25% alongside an 8.4% sales surprise. The results perked shares up nicely, with upgraded guidance leading to the positive EPS picture.
The stock has been quietly strong over the past year, up nearly 50% and outperforming big relative to the S&P 500.
GRMN's sales shot 23% higher year-over-year throughout the above-mentioned period, with its gross margin also expanding nicely to 59.3% from 58.3% in the year-ago period. Several new products were also launched, continuing its nature of creating innovative products within the markets it serves.
Shares also reflect a nice play for income-focused investors, with the current 1.4% annual dividend yield edging out the S&P 500's 1.3%. The company has also shown a commitment to increasingly rewarding shareholders, boasting a 5.6% five-year annualized dividend growth rate.
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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.
Garmin would be an excellent stock for investors to consider, as displayed by its Zack Rank #1 (Strong Buy).
e.l.f. Beauty is a cosmetic company that provides makeup, lip products, nail products, cosmetics sets/kits, beauty tools, brushes, and other similar accessories. Analysts have taken a bearish stance concerning the company's EPS outlook, landing it into an unfavorable Zacks Rank #5 (Strong Sell).
Let's take a closer look at the company.
ELF shares have been decimated over the past year, down nearly 70% and widely underperforming relative to the S&P 500. Quarterly results haven't been enough to breathe life back into shares, with a big growth cooldown the primary reason for the negative sentiment.
As we can see above, while sales growth is still strong, the cooldown has been the bigger story here, helping explain the sharp drop in shares. But while the growth has slowed, the margins picture has largely remained constructive.
Analysts' negative earnings estimate revisions, resulting from a growth cooldown, paint a challenging picture for the company's shares in the near term.
e.l.f. Beauty 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 and the potential to deliver explosive gains in the near term.
U.S. steel prices have surged significantly this year, with benchmark hot-rolled coil (HRC) prices rallying more than 25%. This spike is largely attributed to the Trump administration's imposition of a 25% tariff on all steel imports. The tariffs have tightened supply by restricting imported steel while simultaneously allowing domestic mills to raise prices. With already limited production capacity, U.S. steelmakers have been able to capitalize on the situation, driving up steel prices.
With U.S. steel prices on the rise, stocks such as Nucor Corp., Steel Dynamics, Inc. and United States Steel Corp. are poised to gain. These companies stand out due to their favorable fundamentals, expansion initiatives and ability to capitalize on rising steel prices.
The tariffs on imports have played a crucial role in the steel price rally by creating a supply crunch in the domestic market. As foreign steel becomes more expensive, buyers have turned to U.S. steel mills, increasing demand and pushing prices higher. These tariffs are aimed at revitalizing domestic steel production, reducing dependency on imports and protecting U.S. steel manufacturers from unfair competition.
They have provided a much-needed boost to American steelmakers who have struggled against an influx of cheaper imports in recent years. Infrastructure spending and healthy demand from the construction and automotive sectors have also provided a boost to steel consumption, supporting the price rally.
HRC prices saw a sharp decline last year amid increased imports and weaker end-market demand. Prices tumbled more than 40% last year to close near the $700 per short ton level from $1,200 per short ton at the beginning of 2024. HRC prices have been on the rise lately due to expectations of reduced foreign supply and greater reliance on domestic production. Prices have surged past $900 per short ton. With end-market demand improving, steel prices will likely continue to climb, benefiting U.S. steelmakers with higher profit margins.
The surge in U.S. steel prices, driven by tariffs and supply constraints, has created a favorable landscape for American steel producers. We have handpicked the following steel stocks that stand out as key beneficiaries of this trend. These stocks have a Zacks Rank #3 (Hold) each and have outperformed the S&P 500's decline of 2.1% year to date.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Nucor: North Carolina-based Nucor has a diverse product portfolio and a strong presence in the construction and automotive sectors. Nucor's commitment to operational efficiency and cost management has enabled it to maintain profitability even during volatile market conditions.
NUE remains committed to boosting production capacity, which should drive profitable growth and strengthen its position as a low-cost producer. Nucor is maximizing its returns to shareholders by leveraging its strong balance sheet and cash flows. The company's strong balance sheet and strategic acquisitions further enhance its growth prospects. With steel prices going up, NUE is well-positioned to deliver strong earnings growth and investor returns.
Nucor's earnings beat the Zacks Consensus Estimate in three of the last four quarters and missed once. NUE has a trailing four-quarter earnings surprise of roughly 27.2%, on average. The Zacks Consensus Estimate for NUE's 2025 earnings has increased by 9.2% in the past 30 days.
Steel Dynamics: Based in Indiana, Steel Dynamics is seeing strong customer order activity for flat-rolled steel. It is currently executing several projects that should add to its capacity and boost profitability. STLD is ramping up operations at its new state-of-the-art electric arc furnace flat-rolled steel mill in Texas. The value-added flat-rolled steel coating lines, consisting of two paint lines and two galvanizing lines, also enhance the annual value-added flat-rolled steel capacity.
The company is ramping up volumes from these lines, which are expected to provide earnings benefits in 2025. It is also making progress with its aluminum flat-rolled products mill and plans to produce commercially viable products before mid-2025.
Steel Dynamics outpaced the Zacks Consensus Estimate in each of the trailing four quarters with an average earnings surprise of roughly 3.6%. The consensus estimate for STLD's 2025 earnings has increased by 9.8% in the past 30 days.
United States Steel: Pennsylvania-based U.S. Steel is focused on operational efficiency and cost management, which is aiding its North American Flat-Rolled segment. U.S. Steel is executing its "Best for All" strategy by expanding the mini mill steelmaking advantage. The Big River investment has reinforced its position in high-margin steel-end markets. The Mini Mill segment stands to benefit from higher shipments from the Big River 2 (BR2) mill.
The company has received strong customer feedback on the product quality of BR2 shipments as it steadily progresses toward full operational capacity and generating free cash flow this year. U.S. Steel's strong liquidity position will also allow it to meet its near-term debt obligations.
U.S. Steel's earnings beat the Zacks Consensus Estimate in three of the last four quarters and missed once. X has a trailing four-quarter earnings surprise of roughly 20.4%, on average. The Zacks Consensus Estimate for U.S. Steel's 2025 earnings has moved up 14.5% in the past 30 days.
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Garmin Ltd. (GRMN) : Free Stock Analysis Report
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United States Steel Corporation (X) : Free Stock Analysis Report
Nucor Corporation (NUE) : Free Stock Analysis Report
e.l.f. Beauty (ELF) : Free Stock Analysis Report
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