For Immediate Release
Chicago, IL – January 14, 2022 – Zacks Equity Research shares Crocs
CROX
as the Bull of the Day and Ashland Global
ASH
asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Enphase Energy
ENPH
, ReneSola
SOL
and First Solar
FSLR
.
Here is a synopsis of all five stocks:
Crocs
is a Zacks Rank #1 (Strong Buy) is a leading footwear brand with a focus on comfort and style. The name is very popular and their unique clog style is recognized all over the world.
Originally, the Crocs brand found popularity with boaters, nurses and anyone that was one their feet all day. Now the company offers sandals wedges, flips, slides clogs and other shoes under the Crocs brand name.
The stock has been on a tear since the COVID lows when it was under $10. From there, the CROX crept higher and accelerated into 2021, hitting a high last year at $183.88. Like other stocks, the name saw some aggressive selling into the end of the year, seeing a drawdown of over 35%.
A recent preliminary guide and upgrade helped the stock shoot higher by 15% off the recent lows. Investors are now faced with the decision to cut and run or see if the momentum continues.
About the Company
Crocs was founded in 1999,employs 4,600 and is headquartered in Broomfield, Colorado. The company sells its products in approximately 80 countries through wholesalers, retail stores, e-commerce sites, and third-party marketplaces.
CROX has a market cap of $7.4 billion and has Zacks Style Scores of “B” in Growth and “A” in Momentum.
Q3 Earnings and Preliminary Guidance
In late October, Crocs reported Q3 earnings, seeing a 30% EPS beat. Revenues came in above expectations, while gross margins were up +670 bps y/y, wholesale revenues were up 88.2% y/y and direct-to-consumer revenue was up 60.4% y/y.
The company raised its mid-point FY21 revenue +62-65% and guided initial FY22 revenue above 20%. The stock reacted well, moving to all-time highs in just a few days.
This week, Crocs released some preliminary Q4 numbers. They see revenue up 42% y/y and raised FY21 revenue to +67% y/y from the prior 62-65%. The company affirmed FY22 and reported that HEYDUDE, a recently acquired footwear company, would be immediately accretive to revenue growth.
Crocs, Inc. price-eps-surprise
|
Crocs, Inc. Quote
Estimates
Looking over the last 7 days, we are seeing estimates start to tick higher. For next quarter, numbers have gone from $1.46 to $1.59, or 10%. For next year, estimates have been raised to $9.87 from $9.38, or 5%.
“Top Idea For 2022”
One firm hiking estimates is Piper Sandler. After preliminary guidance the firm labeled CROX its top idea for 2022. They took their price target to $246 from $215 and said Crocs will be one of the most impressive consumer growth stories for several years to come. The analyst raised Q4 estimates aggressively from $1.42 to $2.01.
Piper isn’t the only one that likes the stock, with Baird recently reiterating their Outperform rating and $250 price target.
The Technicals
The selloff starting back in November was pretty brutal and any investors trying to buy the dips were faced with more selling. The stock broke the 200-day moving average in December, rallied back above, only to break again last week.
But now, the stock has reclaimed the 200-day and 21-day, a sign that the momentum is changing. Additionally, a Fibonacci retracement level drawn from before the April 2021 breakout to highs gave us a 61.8% retracement at $115.This level has been defended twice, showing Fib buyers stepping in.
If the stock can continue to rally, investors should look for resistance at the 50-day moving average just above $150. If the bulls can break that area, the move Piper is looking for above $200 likely happens
Bottom Line
This growing brand has been outperforming since COVID started. After defending the $115 level the stock has bounced 15%, but there is still more meat on the bone as many analysts have targets over $200.
Ashland Global
is a Zacks Rank #5 (Strong Sell) that is a leading specialty chemicals company. Ashland provides additives and specialty ingredients to customers in a range of consumer and industrial markets, such as architectural coatings, construction, energy, food and beverage, nutraceuticals, personal care, and pharmaceutical.
The stock had a great 2021, moving higher by over 30%. The stock is sitting just under all-time highs, but investors should be cautious at these elevated prices as the company seeing estimates fall across all-time frames.
About the Company
Ashland is headquartered in Wilmington, DE and employs over 4,000 people. The company was founded in 1924 and has four primary reporting segments: Life Sciences (34% of 2021 sales), Personal Care and Household (27% of sales)), Specialty Additives (30% of sales) and Intermediates & Solvent (8% of sales).
Ashland is valued at $6 billion and has a Forward PE of 23. The company holds a Zacks Style Score of “D” in Momentum and “C” in both Growth and Value. Ashland pays out a dividend with 1.14% yield.
Q4 Earnings
Ashland Global reported in early November, missing earnings by 5%. Revenue came in below expectations, but EBITDA was up year over year.
The company had an investors day a few days later, which took the stock to all-time highs. Ashland says they are approaching FY22 EBITDA margins in FY22. They are targeting FY26 sales over $3.2B and see strong opportunity for M&A.
Investors applauded the numbers, buying the stock up over $110. However, looking forward, its seems analysts aren’t as bullish as investors have been. The stock continues to hold near highs as estimates continue to fall.
Ashland Global Holdings Inc. price-eps-surprise
|
Ashland Global Holdings Inc. Quote
Estimates
Over the last 90 days, estimates are dropping across all-time frames. For the current quarter, we have a 13% drop as numbers fell from $1.05 to $0.91. For the current year, estimates have fallen from $5.29 to $4.65, or 12%.
As the stock sits at all-time highs, investors should be aware that numbers are falling. Earnings are due up on February 2
nd
, when we can expect to see the company break down, or maintain its momentum.
Technical Take
Earnings will be the catalyst, but those numbers could likely fuel a technical move lower. If there is a disappointment like the estimates suggest, a break of the 50-day moving average at $104 would bring in sellers to $100, where the stock found support in December.
In Summary
Ashland has done very well navigating the pandemic and the stock price shows that by sitting just under all-time highs. However, investors should be cautious ahead of earnings as earnings estimates have been falling.
Additional content:
Solar to Comprise 50% of 2022 U.S. Electricity Generation
Per the latest report by the U.S. Energy Information Administration (EIA), almost half of the planned 2022 electric capacity additions in the United States are expected to be solar. In particular, according to EIA’s Preliminary Monthly Electric Generator Inventory report, 46.1 gigawatts (GW) of new utility-scale electric generating capacity is projected to be added to the U.S. power grid, of which 21.5 GW is expected to be solar.
This planned new capacity would exceed 2021’s 15.5 GW of solar capacity additions. This should benefit stocks like
Enphase Energy
,
ReneSola
and
First Solar
that have a strong presence in the U.S. solar market.
Factors Driving Increased Solar Capacity
The U.S. solar industry, which was dealt a big blow at the initial stages of the pandemic due to a decline in installation trend, is once again on a solid growth trajectory. Several factors have been boosting the growth of this industry, which we expect to witness this year as well.
While the rapid transition of the entire world toward a net-zero carbon environment driven by growing demand for clean energy has been the primary catalyst bolstering the solar industry, factors like declining price, abundant corporate investment and a booming storage market have been playing a vital role in strengthening the U.S. solar industry lately.
For instance, per the Solar Energy Industry Association’s report (SEIA), as of 2020, the cost to install solar dropped by more than 70% over the last decade. According to SEIA’s latest Solar Means Business Report, U.S. corporate solar investments swelled to 8300 megawatts, growing 20-fold over the last decade.
Per Wood Mackenzie, the United States commands a global leadership position in energy storage and is expected to constitute 40% of the world’s capacity by 2030. Such developments are surely boosting the U.S. solar industry.
Solar Stocks to Benefit
Considering the aforementioned favorable trends of the U.S. solar industry along with the forward-looking prospects, the following solar stocks are expected to witness growth in the days ahead.
Enphase Energy
: Based in Fermont, CA, Enphase designs, develops, manufactures and sells home energy solutions, while microinverters remain this company’s legacy product. At the onset of the fourth quarter of 2021, the company introduced an all-in-one Enphase Energy System with IQ8 solar microinverters for customers in North America. With IQ8 being Enphase’s smartest microinverter, so far, this launch surely expands the revenue growth prospects of the company in the United States.
The Zacks Consensus Estimate for Enphase’s 2022 earnings has improved 15.2% over the past 90 days. ENPH boasts a four-quarter earnings surprise of 29.49% on average.
ReneSola
: Based in Stamford, CT, ReneSola is a solar project developer and operator, with robust pipeline projects worldwide. The United States continues to be a large and lucrative market for ReneSola. As of Sep 30, 2021, the company had mid-to-late-stage projects of 464 MW in the United States.
The Zacks Consensus Estimate for Enphase’s 2022 earnings indicates an improvement of 39% from the prior-year estimated figure. SOL boasts a four-quarter earnings surprise of 127.50% on average.
First Solar
: Based in Tempe, AZ, First Solar is a leading global provider of comprehensive PV solar energy solutions and specializes in designing, manufacturing, and selling solar electric power modules. The company announced plans to expand its manufacturing capacity by 6.6 GW by constructing its third U.S. manufacturing facility in Ohio. This should enable First Solar to maintain its position as the largest U.S. solar module manufacturer.
First Solar currently boasts a solid long-term earnings growth rate of 10.8%. FSLR has a four-quarter earnings surprise of 19.01% on average.
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
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Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
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