For Immediate Release
Chicago, IL – May 11, 2017 –Zacks Equity Research Stanley Black & Decker (NYSE:SWK) (NYSE: SWK – Free Report ) as the Bull of the Day, Avis Budget Group Inc. (NASDAQ: CAR – Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Snap Inc (NYSE:SNAP). (NYSE: SNAP – Free Report ).
Here is a synopsis of all three stocks:
Stanley Black & Decker (NYSE:SWK – Free Report ) recently beat and raised full year earnings guidance as first quarter business was robust. This Zacks Rank #1 (Strong Buy) is expected to see double digit earnings growth in 2017.
Stanley Black & Decker provides hand tools, power tools and related accessories, electronic security solutions, healthcare solutions and engineered fastening systems globally.
In business since 1843, it owns numerous iconic brands including Stanley, DeWalt, Black & Decker, Irwin Tools, Lenox and Craftsman, which is recently acquired.
A Big Beat in the First Quarter
On Apr 21, Stanley Black & Decker reported its first quarter results and blew by the Zacks Consensus by 10 cents. Earnings were $1.29 versus the consensus of $1.19.
Revenue jumped 5% to $2.8 billion, boosted by 5% organic growth.
Organic growth was led by Tools & Storage, which jumped 6%, while Industrial gained 4%. The Security segment was only "modestly" positive.
All regions contributed to the Tools & Storage gain, with North America gaining 8%, Europe up 6% and the Emerging Markets up 1%.
Operating margin rate expanded 50 basis points to 13.6%. Taking out M&A related charges, the operating margin rate jumped 110 basis points to a new first quarter record of 14.2%.
Raised Full Year Guidance
On March 10, the company had updated its full year guidance after the sale of its Mechanical Security business and the acquisition of Craftsman and Newell Tools.
It is raising the 2017 outlook again to a range of $7.08 to $7.28, primarily due to an improved outlook for its industrial businesses.
The analysts are bullish on Stanley Black & Decker. 6 estimates were raised since the earnings report, which has pushed the 2017 Zacks Consensus Estimate up to $7.21 from $7.05 in the last 30 days.
Avis Budget Group Inc. (NASDAQ:CAR – Free Report ) missed big in the first quarter as lower used car values and competition from places like Uber hurt. This Zacks Rank #5 (Strong Sell) is only expected to see earnings growth of just 0.7% in 2017.
Avis Budget Group is one of the largest rental car companies in the world, with over 11,000 rental locations in 180 countries. It also owns Zipcar, which has more than one million members.
In full disclosure, I'm a Zipcar member and was curious how that aspect of the business was doing but Avis doesn't bust it out from the rest of the business.
On an anecdotal note, recently, there have been a lot more reminder e-mails sent to me to rent a car again.
For those not familiar, Zipcar is a service in most major US cities where you can rent a car by the hour or day at locations around town. There's no going to a rental car location to get one.
A Big Miss in the First Quarter
On May 3, Avis reported its first quarter results and missed on the Zacks Consensus Estimate by 43 cents. Earnings were a loss of $0.94 versus the consensus for a loss of just $0.51.
Revenue fell 2% to $1.8 billion on higher-than-expected fleet costs, continued pricing pressures and a shift of Easter traffic to the second quarter.
It cut costs by $50 million in order to mitigate the effects of weak vehicle residual values. It saw used-car value begin to improve at the end of the first quarter so it believes that results will be better moving forward.
Estimates Lowered
Avis provided a full year 2017 guidance range of $2.85 to $3.50 but the analysts weren't really buying the high end of that range.
Two estimates were cut in the last week, pushing the Zacks Consensus Estimate down to $2.95 from $3.16. That's at the lower end of the range and is earnings growth of just 0.7%.
Shares Sink in 2017
It's been a tough 2017 as shares have fallen nearly 28% year-to-date.
Additional content:
Snap Plummets on First Earnings Report
Snap Inc. (NYSE:SNAP – Free Report ) just released its first-quarter 2017 financial results, posting a loss of $2.31 per share and revenues of $149.6 million.
Currently, SNAP is a Zacks Rank #3 (Hold), but this ranking could change based on today’s results. The stock was down 19.97% to $18.39 per share in after-hours trading shortly after its earnings report was released.
Snap:
Beat earnings estimates . The company posted earnings of -$2.31 per share, beating Street estimates of -$2.33.
Beat revenue estimates . The company saw revenue figures of $149.65 million, beating our consensus estimate of $146.42 million.
Quarterly revenue of $149.648 million was up 286% year-over-year. Daily active users grew 36% to 166 million. DAUs were also up 5% quarter-over-quarter. Average revenue per user grew 181% to $0.90.
Snap Inc. spent about $805.9 million on research and development this quarter. Total costs and expenses totaled nearly $2.36 billion.
Snap Inc. provides technology and social media services. The Company's principal product Snapchat, is a camera application that helps people to communicate through short videos and images. Snap Inc. is headquartered in Venice, California.
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Avis Budget Group, Inc. (CAR): Free Stock Analysis Report
Stanley Black & Decker, Inc. (SWK): Free Stock Analysis Report
Snap Inc. (SNAP): Free Stock Analysis Report
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