Chicago, IL – December 23, 2024 – Zacks Equity Research shares MasTec MTZ as the Bull of the Day and Target TGT as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Uber Technologies UBER, Lyft LYFT and Google's GOOGL.
Here is a synopsis of all five stocks:
Bull of the Day:
MasTec, a current Zacks Rank #1 (Strong Buy), is a national infrastructure construction company that operates mainly throughout the U.S. It builds, installs, maintains, and upgrades infrastructure for energy, communication, and utilities.
Analysts have taken their earnings expectations higher across the board.
Let's take a closer look at how the company stacks up.
MasTec
MasTec's status as a market-leading critical infrastructure company sets it up nicely for exposure surrounding strong macro trends, with a diversified portfolio of services and offerings helping balance its risk profile nicely.
Shares have been big winners in 2024, up nearly 75%.
Positive quarterly results have aided the outperformance, with the latest set pushing shares higher post-earnings. MasTec reported adjusted EPS of $1.63 and sales of $3.3 billion, with EPS soaring alongside a modest sales decline. The company's margins also expanded nicely alongside strong cash generation.
The company's next set of quarterly results is expected in early March, with MasTec expected to post significant EPS growth on slightly higher sales. Top line revisions for the period have largely remained stable while EPS expectations have soared.
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.
MasTec (MTZ) would be an excellent stock for investors to consider, as displayed by its Zack Rank #1 (Strong Buy).
Bear of the Day:
Target is a general merchandise retailer with heavy exposure to the discretionary side. Analysts have lowered their expectations across the board following soft quarterly results, landing the stock into an unfavorable Zacks Rank #5 (Strong Sell).
Can the retail giant get its mojo back? Let's take a closer look at how it currently stacks up.
Target
Target shares missed the party in 2024, down roughly 4% and widely underperforming relative to the S&P 500. And from the 2024 high, shares have lost more than 20%.
The company fell short of both consensus EPS and sales estimates in its latest release, also lowering its current fiscal year earnings outlook following the soft results. Cost pressures ate into bottom line performance, with analysts' downward revisions fully reflective of the development.
The rough share performance has boosted the annual dividend yield, with shares now yielding 3.5% annually. While the high yield may be enticing, investors should approach the stock with great caution until positive earnings estimate revisions roll in.
Bottom Line
Analysts' negative revisions rolled in following the release of its latest quarterly results, with weak sales continuing to be a thorn in the company's side.
Target (TGT) 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.
Additional content:
UBER Stock Falls -13% in a Month: Buy the Dip?
Shares of Uber Technologies have declined 13.2% in the past month, underperforming its industry and the S&P 500 Index, of which Uber is a key member. In comparison, shares of rival Lyft have dropped 16.6% in the same timeframe.
The San Francisco, CA-based ride-hailing company's shares have dropped on concerns that self-driving cars could eliminate intermediary services. Google's Waymo recently unveiled plans to expand its robotaxi (autonomous vehicle) service to Miami, which has increased investor worries about heightened competition in the rideshare market, hurting the UBER stock. Donald Trump's plans to push for a federal framework supporting self-driving vehicles have also hit UBER shares.
However, Uber's robust fundamentals and growth prospects cannot be ignored. For long-term investors, the recent pullback might create an opportunity to buy UBER shares. Currently priced at $60.21, the stock is 30.8% below its 52-week high, leaving ample room for growth.
Reasons Why We Remain Bullish on UBER Stock
Favorable Earnings Estimate Revision: The Zacks Consensus Estimate for earnings per share for 2024 and 2025 has seen upward revisions over the past 60 days. The positive revision trend reflects confidence in UBER's ability to continue delivering strong financial performances.
Rosy Growth Projections & Surprise History: The Zacks Consensus Estimate for the current and the next-year earnings has been revised upward by 117.2% and 34%, respectively. The Zacks Consensus Estimate for the current and the next-year sales has been revised upward 17.4% and 16.4%, respectively. UBER's long-term earnings (three to five years) growth rate is 42.5%, way ahead of its industry's 24.1%. The company has surpassed the Zacks Consensus Estimate for earnings in three of the past four quarters (missing the mark in the other one). The average beat is 83%.
Commendable Expansion Efforts: Even though Uber's primary business is ridesharing, it has diversified into food delivery and freight over time. Diversification is imperative for big companies to reduce risks, and UBER has excelled in this area. The company has engaged in numerous acquisitions, geographic and product diversifications, and innovations. Uber's endeavors to expand into international markets are commendable and provide it with the benefits of geographical diversification. Prudent investments enable Uber to extend services and solidify its comprehensive offerings.
Key Segments Performing Well: Uber's ridesharing and delivery platforms are growing in popularity. This is generating strong demand, which, along with the latest growth initiatives and continued cost discipline, are driving the company's results. In the third quarter of 2024 , total gross bookings increased 16% year over year to $41 billion, with trips rising 17% to 2.9 billion. Gross bookings are likely to be strong going forward, keeping Uber in good shape.
We expect gross bookings from the Mobility segment in the December-end quarter to grow 20.6% on a year-over-year basis. We expect gross bookings from the Delivery segment in the December-end quarter to grow 15.2% on a year-over-year basis. Total trips are expected to move up 17.5% year over year in the September-end quarter, per our model.
UBER Shares Trade at a Discount
The UBER stock is quite cheap, as its Value Score of B does not suggest a stretched valuation at this moment.
In terms of price-to-sales (forward 12-month), UBER is trading at 2.5X, lower than its 5-year median of 3.03X and the industry's 5.81X.
Final Verdict: Buy UBER Stock Now
While Uber shares have suffered lately due to robotaxi-related fears, its strong long-term growth prospects and other tailwinds mentioned throughout the write-up create a solid investment case for forward-looking investors. Combined with its attractive valuation and strong position in the ridesharing market, investors with a higher risk tolerance could find this an opportune time to buy the UBER stock.
Despite the recent fears, Uber has enough factors in its favor, which leads us to conclude that this Zacks Rank #2 (Buy) undervalued stock is an ideal candidate for addition to one's portfolio. You can see the complete list of today's Zacks #1 Rank stocks here.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
https://www.zacks.com
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
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/performancefor information about the performance numbers displayed in this press release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
