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Rockwell Automation, Ethan Allen Interiors, Unilever, Syngenta AG And Shin-Etsu Chemical Highlighted As Zacks Bull And Bear Of The Day

Published 05/15/2017, 09:30 PM
Updated 07/09/2023, 06:31 AM

For Immediate Release

Chicago, IL – May 16, 2017 –Zacks Equity Research Rockwell Automation (NYSE:ROK) (NYSE: ROK Free Report ) as the Bull of the Day, Ethan Allen Interiors (NYSE: ETH Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Unilever (LON:ULVR) (NYSE: UN Free Report ), Syngenta AG (SIX:SYNN) (NYSE: SYT Free Report ) and Shin-Etsu Chemical (OTCMKTS: SHECY Free Report ).

Here is a synopsis of all five stocks:

Bull of the Day :

As the world becomes increasingly reliant on automation and companies providing technology solutions in this area, investors are scrambling to find the winners in this key market segment. One that could definitely be worth a closer look right now is Rockwell Automation (NYSE:ROK Free Report ), and especially if recent trends continue.

Why Rockwell?

Rockwell is in the often-underappreciated area of industrial automation, helping manufacturing and industrial companies to streamline their production processes. The Wisconsin-based company is in a number of different industries in this business too, including automotive, consumer products, commodity production, and infrastructure, just to name a few.

The company is also coming off a nice earnings report in the most recent quarter which includes a double-digit percentage beat compared to analyst estimates. Revenues were also up 8% in year-over-year terms, while guidance was also impressive for the company too.

What’s Next?

Thanks to this guidance increase and the general positive outlook for automation companies right now, analysts have been raising their earnings estimates for ROK stock as of late. We haven’t seen any analysts cut their estimates for the current year, though nine have increased their estimates in the past month, while we have seen a six to one ratio of increases to decreases for the current quarter too.

The magnitude of the estimate revisions has also been impressive, as we have seen a six percent lift in the current year consensus estimate in the past two months, while we have seen a similar boost in the following year estimate too. Add in an incredible history of living up to expectations in earnings season—including only one miss of expectations since mid 2014—and it is easy to see why ROK is a Zacks Rank #1 (Strong Buy) stock right now.

Bear of the Day :

The retail apocalypse appears to be upon us and is dragging down a number of companies in the traditional consumer market. And while much of this trend has been focused on the apparel side of the retail world, the furniture side has also been decimated too.

In fact, the home furnishings industry currently has an Industry Rank in the bottom 10% overall, while the retail sector is in the bottom 20% too. Clearly, this isn’t a great combination, and investors might be better served by looking elsewhere for exposure in the retail space. But, if you are looking for a short candidate or a more concrete example of this trend, consider a closer look at Ethan Allen Interiors (NYSE: ETH Free Report ).

Why ETH?

Although Ethan Allen shares have held up better than most in the face of the onslaught of negative news in the retail market, there is plenty of reason to be concerned about the company, even beyond its sluggish industry rank. That is because this furniture store chain just missed earnings estimates in its most recent report, posting earnings of just 23 cents per share compared to estimates of 27 cents per share.

Furthermore, analysts have been slashing their expectations for Ethan Allen Interiors in the near future, as we haven’t seen any estimates go higher for the current quarter or the current year in the past two months. Instead, we have seen several analysts move their estimates lower, including four for the current quarter and five for the current year.

Additional content:

On a Jet Plane: Global Week Ahead

In the Global Week Ahead, President Trump will jet off on a 9-day foreign trip. His inaugural diplomatic trip on Air Force One begins on Thursday.

This first presidential trip abroad features stops in Saudi Arabia, Israel, Italy and Belgium -- and Mr. Trump’s first appearances at both NATO and G7 summits of major powers.

This is the high-level political world. And it is no longer spinning around a U.S. axis, and probably hasn’t for some time. That will become even more apparent as this first U.S. Presidential trip unfolds.

In addition, it turns out that, in the week ahead, many world leaders outside the U.S. are gaining strength.

  • Enjoying strong election results, Germany and France are staying in the centrist camp. Their leaders hold their first formal meeting on Monday.

  • Japan’s Prime Minister is about to enjoy 5 straight quarter of uninterrupted GDP growth, the first run of that in 11 years.

  • And Iran’s moderate President is up for re-election on Friday.

Let’s step thru the non-U.S. scenario unfolding—

Germany’s leader Angela Merkel hosted the new French President Emmanuel Macron for their first meeting after his inauguration.

Bloomberg wrote that Merkel is “clawing back when it counts.” Her party’s election victory in Germany’s most populous state on Sunday highlights her pull among voters.

Merkel vows to hold the European Union together, defend free trade, and rebuff Trump’s pressure to accelerate defense spending.

After 12 years in office, this election victory confirms Merkel’s standing -- before she heads to the North Atlantic Treaty Organization (NATO) and Group of Seven (G7) summits in Brussels and Sicily next week.

On Thursday in Asia, it should appear that Japanese Prime Minister Abe’s economic policies are working. Analysts look to Japan’s Q1-17 GDP numbers for confirmation of strong economic expansion.

Market consensus pegs annualized Japanese GDP growth at +1.8% -- roughly a percentage point above its long-run trend, according to Bloomberg.

Another positive quarterly Japanese GDP figure would mark five consecutive quarters of growth -- the first time in 11 years.

On Friday, Iran’s moderate president Hassan Rouhani seeks a second term. He is the leader who struck the historic deal to remove nuclear sanctions.

To close out a prepatory week in diplomacy, on Saturday, 21 Asia-Pacific trade ministers meet in Hanoi, Vietnam. They look to launch freer trade in that region.

This has long been the case. Since World War II, U.S. economic partners, established treaties and long-term military alliance structures are the pillars. They project and maintain stable power relationships across the globe.

Fewer global political risks lower the thresholds to higher global GDP growth – enjoyed by all the political players in the system.

Let’s see.

Can this first jet-set trip abroad help to regain that enduring, seven-decade-old perspective --for a new and inexperienced U.S. President — after it is over?

Fresh Zacks #1 Rank (STRONG BUY) Stocks—

(1) Unilever (NYSE:UN Free Report ): Think about Europe, where share valuations are lower. This monster $92 billion market cap Consumer Staples stock also carries a long-term Zacks VGM score of B.

(2) Syngenta AG (NYSE:SYT Free Report ): This is a large Swiss agrochemical and seeds company, with $42 billion in market capitalization. Here’s the big news: the Chinese seek to increase agricultural sector productivity by buying this company.

In recent weeks, ChemChina announced results for their tender offer to purchase all publicly held registered shares of Syngenta and all outstanding American Depositary Shares (ADRs).

On May 4th, around 82.2% of Common Shares have been validly tendered. The Minimum Acceptance Rate condition of 67% of issued Syngenta shares has been satisfied. In short, the Chinese tender offer has been successful.

(3) Shin-Etsu Chemical (OTCMKTS:SHECY Free Report ): This stock is all about global semiconductor suppliers staying HOT. This Japanese firm is engaged in the production and distribution of polyvinyl chloride and silicon wafers.

The company's products include of polyvinyl chloride, silicones, rare earths, rare earth magnets, epoxy molding compounds, synthetic Quartz, semiconductor silicon and cellulose derivatives.

Shin-Etsu Chemical Co., Ltd. is headquartered in Tokyo, Japan.

Get today’s Zacks #1 Stock of the Day with your free subscription to Profit from the Pros newsletter:

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.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.

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Rockwell Automation, Inc. (ROK): Free Stock Analysis Report

Ethan Allen Interiors Inc. (ETH): Free Stock Analysis Report

Unilever NV (UN): Free Stock Analysis Report

Syngenta AG (SYT): Free Stock Analysis Report

Shin-Etsu Chemical Co. (SHECY): Free Stock Analysis Report

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