For Immediate Release
Chicago, IL – April 20, 2021 – Zacks Equity Research Shares of The Goldman Sachs Group, Inc.
GS
as the Bull of the Day, 21Vianet Group, Inc.
VNET
as the Bear of the Day. In addition, Zacks Equity Research provides analysis on EQT Corporation
EQT
, Cabot Oil & Gas Corporation
COG
and Antero Resources Corporation
AR
.
Here is a synopsis of all five stocks:
Bull of the Day
:
It does not take a rocket scientist to piece together today’s Bull of the Day. Actually, it’s very simple. The market is up at all-time highs. That should make it very easy to choose the winners. In the gold rush, the real fortunes were made not on gold, but on the folks who sold the picks and axes. It is the same with the stock market. The companies that make the most money are going to be the companies that benefit from high equity prices. That’s the stocks involved in the asset management game.
Today’s Bull of the Day is a stock in that game. Not only are they a part of it, arguably, they are the best in that game. I’m talking about the company that every young broker wishes they could be a part of,
Goldman Sachs.
The Goldman Sachs Group, Inc., a financial institution, provides a range of financial services for corporations, financial institutions, governments, and individuals worldwide. It operates through four segments: Investment Banking, Global Markets, Asset Management, and Consumer & Wealth Management.
The Financial – Investment Bank industry is in the Top 2% of our Zacks Industry Rank. In addition to the favorable rank, the stock has a Zacks Value Style Score of C, Growth of B, and Momentum of A, to help it round off with a VGM Composite Score of A.
The reason for the favorable rank is the series of earnings estimate revisions coming in to the upside from analysts. Over the last 60 days, eight analysts have revised their estimates to the upside for next year while over the last 30 days, eight have done so for the current year. The estimate revisions are nothing short of staggering.
For the current year, EPS estimates have swelled from $26.87 to $43 even, while next year’s estimates are up from $30.10 to $34.90. I understand that next year’s number is a contraction, but it’s this year that takes the cake. Year-over-year EPS growth is slated to come in at 73.81%. That is huge for a company with a market cap of over $118 billion.
Bear of the Day
:
The market is looking top-heavy right now. Stocks that have consistently pushed up to all-time highs look priced to perfection. Heading into a busy earnings season, that means that most stocks out there are in need of not just solid earnings reports, but great earnings reports. Today’s Bear of the Day, is a stock that has seen earnings estimate revisions coming in to the downside. That means, Wall Street has already lowered the bar. That could lead to some serious selling if the company fails to hit the mark.
Today’s Bear of the Day is Zacks Rank #5 (Strong Sell)
21Vianet.
21Vianet Group, Inc. provides carrier and cloud-neutral Internet data center services to Internet companies, government entities, blue-chip enterprises, and small-to mid-sized enterprises in the People’s Republic of China. The company operates in two segments, Hosting and Related Services, and Managed Network Services.
The company is in the Internet – Services industry which ranks in the Bottom 30% of our Zacks Industry Rank. Over the last 60 days, earnings estimates have been dropping like rocks. Three analysts have cut their estimates for the current year, while two have cut their numbers for next year. The bearish consensus has cut current year estimates from a 36-cent-loss to a -53-cent-loss. Next year’s number is down from a 7-cent profit to a disappointing 27-cent loss.
Additional content:
Here’s Why Natural Gas Hit Its Highest Prices in 5 Weeks
The U.S. Energy Department’s weekly inventory release showed a lower-than-expected increase in natural gas supplies. The encouraging inventory numbers, coupled with favorable weather predictions and strong liquefied natural gas (“LNG”) feedgas deliveries meant that the U.S. benchmark gained 6.1% last week to reach its highest level in more than a month.
Let us see how the natural gas situation looks like after the U.S. Energy Department’s latest weekly inventory release:
EIA Reports a Build Smaller Than Market Expectations
Stockpiles held in underground storage in the lower 48 states rose by 61 billion cubic feet (Bcf) for the week ended Apr 9 compared to the guidance of a 65 Bcf addition. The increase was also below last year’s addition of 68 Bcf for the reported week but came above the five-year (2016-2021) average net build of 26 Bcf.
The third injection of the year puts total natural gas stocks at 1,845 billion cubic feet (Bcf), which is 242 Bcf (11.6%) below the 2020 levels at this time but 11 Bcf (0.6%) higher than the five-year average.
Total supply of natural gas averaged 95.4 Bcf per day, down 1.3% on a weekly basis due to a decrease in dry production and lower shipments from Canada.
Meanwhile, daily consumption fell 2.3% to 88.5 Bcf from 90.6 Bcf in the previous week, dragged down by weaker demand from the residential/commercial and industrial sectors, partly offset by stronger power burn and higher LNG exports to Mexico.
Natural Gas Prices Post Gain
Natural gas prices rose last week following the lower-than-expected inventory build. Futures for May delivery ended Friday at $2.68 per million British thermal units (MMBtu) on the New York Mercantile Exchange, up 6.1% from the previous week’s closing and the highest since Mar 10. The increase in the price of natural gas is also the result of the ongoing strength in LNG demand and forecast models, indicating a cold front in the days ahead, which would translate into smaller inventory additions due to more use of heaters.
Wrap-Up
As is the norm with natural gas, changes in temperature and weather forecasts can lead to price swings. With the latest models showing bullish changes toward a late season cold pattern, prices have trended higher.
However, with winter drawing to a close and the so-called “shoulder season” of typically low natural gas demand in the spring settling in, prices could be in for more downside risks than upside potential. While growing LNG export is providing some support to the prices, it will be weather conditions across the United States that will dictate the energy commodity’s future.
The lingering uncertainty over the fuel means that most natural gas-focused companies carry a Zacks Rank #3 (Hold). As a result, investors should preferably wait for a better entry point before buying shares in
EQT Corp.
,
Cabot Oil & Gas Corp.
, etc.
If you are still looking for near-term natural gas plays,
Antero Resources
might be a good selection.
Antero Resources is the third-largest U.S. gas producer and a leading operator in the Appalachian basin — the most-prolific domestic gas basin — with around 515,000 net acres. More than 65% of the company’s total output is natural gas. While the company’s low-cost, high-quality inventory should ensure long-term output growth, cash flows will also receive some downside protection from attractive hedges.
The 2021 Zacks Consensus Estimate for this Zacks Rank #2 (Buy) company indicates 267.86% earnings per share growth over 2020.
You can see
the complete list of today’s Zacks #1 Rank stocks here
.
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