The Zacks Analyst Blog Highlights: RH, The Boston Beer Company, Thor Industries, Target and FedEx
For immediate publication
Chicago, IL - October 9, 2020 - Zacks.com announces the list of stocks on the Analyst Blog. Every day, analysts at Zacks Equity Research discuss the latest news and events that affect stocks and the financial markets. Stocks recently featured on the blog include: RH RH, SAM from Boston Beer Company, Inc., THO from Thor Industries, Inc., Target Corporation TGT, and FDX from FedEx Corporation.
Here are the highlights from Thursday's analyst blog:
Top growth stocks to buy on ify stimulus prospect
US stock markets closed significantly higher on October 7 after President Donald Trump tweeted and urged US Congress to immediately pass a coronavirus aid package for certain industries.
This was in contrast to Trump's October 6 tweet when he urged his administration to halt negotiations with Democrats on a full fiscal stimulus pending the planned November 3rd US election. Wall Street experienced an immediate downturn and ended up significantly lower when the news broke. However, investors' hopes for at least a shortened second round of the stimulus package helped the market more than offset the previous day's losses.
A partial tax incentive
President Trump has asked Congress to allocate $ 25 billion to help airline payroll and $ 135 billion to a small business paycheck protection program. Both grants could be paid out of unused funds under the Cares Act, which expired in July. Additionally, Trump sent a standalone bill for $ 1,200 per person as unemployment benefit.
In particular, the first round of the $ 2.2 trillion coronavirus relief package - popularly known as CARES ACT - ended in late July. Meanwhile, the severe economic devastation caused by the coronavirus forced lawmakers to launch another round of stimulus.
However, the US Congress failed to find an amicable solution as to the size and scope of the aid package. The Democrats want a package of $ 2.2 trillion, while the Republicans are satisfied with $ 1.6 trillion.
Importance of tax incentives
In the absence of a second round of economic activity, the US economy appears to have lost the pace of its recovery. Lack of incentives will severely affect the reopening of stocks like airlines, vacation travel, restaurants and bars, movie theaters and theater operators, theme parks, and other entertainment segments.
A number of economic data for August and September such as job data, retail data, durable goods order data, manufacturing data, and consumer spending data have slowed compared to the last four months. Several large airline, media and entertainment companies have decided to fill thousands of jobs without further government aid.
Furthermore, after determining that it intends to maintain its ultra-cautious stance on monetary policy through at least 2023, the Fed has urged Congress to urgently launch a new round of stimulus to tighten the economy in an unprecedented difficult situation.
Wall Street has room to keep growing
The market is not overvalued. Historically, the average return on the S&P 500 and the Dow over the past 23 years of the US presidential election has been 11.3% and 6%, respectively.
In addition, in its latest October 6 forecast, the Atlanta Fed estimated third-quarter US GDP growth of 35.3% from 34.6% on May 1. October. In addition, projections for U.S. corporate earnings for the third quarter and full year 2020 are presented, increasing since early July, suggesting growing corporate earnings.
Our top picks
At this point, it is wise to invest in growth stocks with a cheap Zacks rank that has surfaced in the last month. Growth investors tend to focus on stocks with aggressive earnings or sales growth, which should drive their stock price higher in the future.
We narrowed our search to seven growth stocks, each with a Zacks Rank 1 (strong buy) and an A Growth Stock. The full list of today's Zacks Rank 1 stocks can be found here.
RH operates as a home furnishings retailer. It offers products in different categories, including furniture, lighting, textiles, bathroom accessories, decor, outdoor and garden items, tableware and furniture for children and young people.
The company expects an expected earnings growth rate of 47.5% for the current year (end of January 2021). The Zacks consensus estimate for the current year has improved 0.8% in the past 7 days. The share price rose 21.1% last month.
The Boston Beer Co. produces and sells alcoholic beverages mainly in the USA. In addition to the flagship Samuel Adams Boston Lager, it offers various beers, hard ciders and hard selters under the brands Samuel Adams, Twisted Tea, Angry Orchard Hard Cider and Truly Hard Seltzer.
The company expects an expected earnings growth rate of 34.6% for the current year. The Zacks consensus estimate for the current year has improved 4.6% in the past 30 days. The share price is up 15.6% over the past month.
Thor Industries designs, manufactures and sells recreational vehicles (RV) and related parts and accessories in the United States, Canada and Europe. It is the world's largest manufacturer of mobile homes.
The company expects an expected earnings growth rate of 38.6% for the current year (end of July 2021). The Zacks consensus estimate for the current year has improved 14.1% in the past 30 days. The share price rose 11.8% last month.
Target Corp. operates as a retailer of general goods in the United States. It offers beauty and household items, food assortments including perishable goods, dry foods, dairy products and frozen products. and apparel, accessories, home accessories, electronics, toys, seasonal offers and other merchandise.
The company's expected earnings growth rate for the current year (ending January 2021) is 11.9%. The Zacks consensus estimate for the current year has improved 44.2% in the past 60 days. The share price is up 11.6% last month.
FedEx Corp. is a leader in global express delivery services. It offers a broad portfolio of transportation, e-commerce and corporate services through companies that compete, operate independently and jointly under the FedEx brand.
The company expects an expected earnings growth rate of 59.4% for the current year (end of May 2021). The Zacks consensus estimate for the current year has improved 44.7% in the past 30 days. The share price was up 21.4% last month.
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Past performance is no guarantee of future results. The potential for loss is associated with every investment. This material is provided for informational purposes only and nothing in this document constitutes investment, legal, accounting, or tax advice, or a recommendation to buy, sell or hold any security. No recommendation or advice is made as to whether or not to invest in any suitable for certain investors. There is no assurance that any investment in any security, company, sector, or market that has been identified and described has been or will be profitable. All information is current as of the date of this publication and is subject to change without notice. All views or opinions expressed may not reflect those of the entire company. Zacks Investment Research does not engage in investment banking, market making, or asset management activities in any securities. These returns come from hypothetical portfolios made up of stocks with Zacks Rank = 1 that have been rebalanced monthly with no transaction costs. These are not the returns on actual stock portfolios. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information on the performance metrics shown in this press release.
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Target Corporation (TGT): Free Stock Analysis Report
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RH (RH): Free stock analysis report
The Boston Beer Company, Inc. (SAM): Free Stock Analysis Report
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