For Immediate Release
Chicago, IL – March 14, 2017 – Zacks Equity Research highlights Nutrisystem, Inc. (NASDAQ: NTRI – Free Report ) as the Bull of the Day, Casey’s General Stores, Inc. (NASDAQ: CASY – Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Texas Instruments ( NASDAQ: TXN – Free Report ) , Telefonica SA ( NYSE: TEF – Free Report ) and Deere and Company ( NYSE: DE – Free Report ) .
Here is a synopsis of all five stocks:
Bull:
Nutrisystem, Inc. (NASDAQ: NTRI – Free Report ) continued with its hot streak as it beat the Zacks Consensus Estimate by 20% in the Fourth Quarter. This Zacks Rank #1 (Strong Buy) is expected to see double digit revenue growth again in 2017.
Nutrisystem is famous for weight loss programs including Nutrisystem Lean13 program, designed to deliver weight loss of up to 13 pounds in the first month. The company also has other branded weight-loss products including Fast 5 and Turbo 10 as well as multi-day kits sold at select retail outlets.
Feeding on the healthy food frenzy sweeping the nation, the company’s meal choices including 100 foods which do not contain artificial preservatives or flavors.
Plans can also be customized for specialized diets, including those with Type 2 diabetes or pre-diabetes.
Launching the South Beach Diet in 2017
Nutrisystem acquired the South Beach brand in 2015 and formally launched its new South Beach Diet in January 2017 at the start of what is commonly known as “diet season”. That’s the time of the year when everyone is making their New Year’s resolutions and dieting is a big part of that.
It expects the momentum it got in 2016 to continue in 2017.
In 2016, total revenue rose 18% to $ 545.5 million from $ 462.6 million.
Beat Again in the Fourth Quarter
On Feb 27, Nutrisystem reported its fourth quarter results and beat the Zacks Consensus Estimate again. It reported $ 0.29 versus the consensus of $ 0.24.
It has beat every quarter over the last 4 years except for one.
Bullish on 2017
Despite double digit revenue gains in 2016, Nutrisystem believes it can do it again as it guided full year revenue growth in the range of $ 630 to $ 650 million. That’s another 18% earnings growth again in 2017.
The analysts are also bullish. 2 estimates were raised for 2017 after the report pushing the Zacks Consensus up to $ 1.49 from $ 1.38. That’s earnings growth of 20.7%.
2018 is also looking strong with 2018 estimates rising as well. Analysts expect another 25% earnings growth in 2017.
Bear:
Casey’s General Stores, Inc. (NASDAQ: CASY – Free Report ) is going through a rough patch as small town America is eating out less. This Zacks Rank #5 (Strong Sell) has missed four quarters in a row.
Casey’s owns over 1,900 convenience stores in 14 Midwestern states. It offers self-service gasoline, groceries and prepared foods, including its famous made-from-scratch pizza and donuts, chicken tenders and sandwiches.
It is focused on small town America, with 57% of its stores located in areas with populations under 5,000 people.
This combination means it is the 5th largest pizza chain in the United States as it operates in cities that don’t have a lot of other chain restaurant businesses.
Casey’s Missed Again
On March 6, Casey’s reported its fiscal third quarter earnings and missed for the fourth time. It reported earnings of just $ 0.58 compared to the Zacks Consensus Estimate of $ 0.88.
Casey’s described “pressures” in its operating area throughout the quarter.
The Fuel segment was fine with same-store gallons sold up 2.6%, higher than its fiscal 2017 goal of 2%. Year-to-date, same-store gallons were up 3% with an average margin of 18.7 cents per gallon, both above the company’s goals.
The Grocery segment saw same-store sales up 3%, well under the annual goal of 6.2%. This category is falling behind on its yearly goals, as the 9-month average is just 3.5%.
In the important Prepared Food and Fountain Drinks segment, which includes its pizza business, same store sales were up just 5.8%, well under the fiscal goal of an increase of 10.2%. However, same-store sales did accelerate from the second quarter.
The company recently launched a mobile ordering app and the total app downloads have surpassed 700,000. 13% of whole pizzas sold now come from digital orders.
Fiscal 2017 and 2018 Estimates Cut
With one quarter to go in the fiscal year, it looks pretty obvious that the company isn’t going to meet its fiscal 2017 goals in a number of categories. The big third quarter earnings miss also meant that analysts had to cut their full year guidance.
Casey’s is located in many small, rural towns. While this has been its strength, as it has less competition there, with farming incomes on the decline the last few years, this has also become a weakness.
Additional content:
Europe’s Elections Stoke the Fire
In the Global Week Ahead, the Federal Open Market Committee (FOMC) surely raises the Fed Funds target range by 25 basis points from 0.75 to 1.0% on Wednesday afternoon.
That foregone conclusion is not where traders will focus. Primary U.S. Treasury dealers and Fed Funds future markets carry nearly a 100% market probability on a hike.
Want a source for trader surprise? It would be if the FOMC doesn’t move its forward ‘dot plot’ enough. Future policy guidance should be more hawkish, but how much more hawkish?
FOMC macro data will be equally interesting. See if the committee’s GDP, inflation and unemployment rate forecast updates move significantly. These are “tells,” too. Traders, pay close attention.
Chair Yellen’s recent Executives’ Club of Chicago language guides us. She said rate hikes proceed at a gradual pace, and the Fed’s huge balance sheet reinvests its earnings, until this rate normalization gets “well underway.”
Consensus thinks a Fed Funds target rate of 2.0%+ does not occur until late 2018. That sounds too low and too late to me.
By the way, the latest GDPNow forecast on March 8th by the Atlanta Fed shows a paltry +1.2% for the First Quarter of 2017.
Without strong GDP growth to back it, why did U.S. hiring accelerate early in 2017? Is extra hiring being done in anticipation of better capital goods tax incentives, like accelerated depreciation and lower corporate income taxes?
Or are incremental job additions running too far ahead of U.S. GDP data?
Over in Europe, pay close attention to high-level elections this year.
The first to stoke these smoldering fires are Dutch voters. Their high-level elections are held this Wednesday.
You may not know this. The Turkish president and strongman, Erdogan, just called the Netherlands a “banana republic,” saying it would “pay the price” for its actions.
What actions is he referring to? The Dutch didn’t let his Foreign Minister’s plane land, so he could participate in a Turkish referendum rally held there. Both countries are part of NATO.
The much more important French presidential election holds its first round of voting on April 23rd. The second round occurs on May 7th.
The 39-year-old centrist candidate Emmanuel Macron has jump-started the pushback on the incendiary fringe movements that lit up across advanced countries in 2016. He is a former French Minister of the Economy, Industry and Digital Affairs.
Germany holds Federal elections on September 24th.
Top Zacks Rank stocks-
Texas Instruments ( NASDAQ: TXN – Free Report ) . This marquee large cap semiconductor stock got added – again — to our #1 STRONG BUY list on March 7th. It’s all about the autonomous vehicle revolution that’s about to pick up its pace.
Telefonica SA ( NYSE: TEF – Free Report ) . The biggest of Latin American telco providers is back. Its long-term Zacks VGM score is A. The latest #1 STRONG BUY rating hit on March 8th.
Deere and Company ( NYSE: DE – Free Report ) . A sales rebound is underway for big U.S. agriculture machinery. Does the trade rhetoric help or hurt here? The Zacks #1 STRONG BUY rating hit on March 11th.
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
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NutriSystem Inc (NTRI): Free Stock Analysis Report
Caseys General Stores, Inc. (CASY): Free Stock Analysis Report
Texas Instruments Incorporated (TXN): Free Stock Analysis Report
Telefonica SA (TEF): Free Stock Analysis Report
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