Zacks analyst blog spotlights Tesla, Pool, Alcoa, Zebra Technologies and SVB Financial Group
For immediate release
Chicago, IL – May 2, 2022 – Zacks.com announces the list of stocks featured in the analyst blog. Every day, Zacks Equity Research analysts discuss the latest news and events impacting stocks and financial markets. Stocks recently featured in the blog include: Tesla Inc. TSLA, Pool Corp. POOL, Alcoa Corp. AA, Zebra Technologies Corp. ZBRA and SVB Financial Group SIVB.
Here are highlights from Friday’s analyst blog:
5 stocks to buy at lucrative valuations after April’s chaos
We are about to end a very disappointing month of April with only one day of trading remaining. Historically, April is considered a strong month on Wall Street. However, this year market participants failed to find direction due to extreme volatility. Despite several attempts to come back, the main stock indices are in the red this month.
Interestingly, the April crash made several stocks very attractive at their current valuations. Many of these stocks have strong upside for the remainder of 2022. We’ve picked five in this space with favorable Zacks rankings. These are – Tesla Inc., Pool Corp., Alcoa Corp., Zebra Technologies Corp. and SVB Financial Group.
Markets take a hit in April
US equity markets have been reeling from high volatility since the start of 2022. However, major equity indices rebounded in March, despite the Fed raising the benchmark interest rate by 25 basis points, which which was in line with investors’ expectations.
Despite raising interest rates for the first time in three years, several measures of inflation showed no signs of trending lower and remained high at a 40-year high. Soaring inflation has compelled Fed Chairman Jerome Powell to say that the central bank will not hesitate to take tougher action in 2022. The Fed’s March FOMC minutes also indicated the same thing.
Market participants are overwhelmingly expecting the Fed to hike interest rates by 50 basis points at the May and June FOMC and will begin to shrink the size of its $9 trillion balance sheet from may.
A more than hawkish Fed, continued elevated inflationary pressure from continued global supply chain disruptions, the protracted war between Russia and Ukraine, and the resurgence of COVID-19 infections in China and the lockdown in several parts of this country have significantly shaken investors’ confidence.
Since the start of the month, the three major indexes – the Dow Jones, S&P 500 and Nasdaq Composite – have fallen 2.2%, 5.4% and 9.5%, respectively. The Nasdaq Composite is currently in bearish territory, down 20.6% from its recent high. The S&P 500 is in correction territory after falling 11% from its recent peak. The Dow is down 8.2% from its recent high.
5 Best Stocks at an Attractive Valuation
The turmoil on Wall Street in April made several large caps (market capital > $10 billion) very attractive at their current valuation. Buying these stocks on the downside should provide good benefits going forward. We narrowed our research to five such stocks that have strong upside potential for the remainder of 2022.
These stocks have seen positive revisions to earnings estimates over the past 30 days, indicating that the market expects these companies to do strong business in 2022. Each of our picks carries either a Zacks #1 rank (strong buy) or 2 (buy). You can see the full list of today’s Zacks #1 Rank stocks here.
You’re here has gained a substantial market share in the electric car segment. The increase in Model 3 delivery, which constitutes a significant portion of TSLA’s overall deliveries, is contributing to its revenue. Along with Model 3, Model Y contributes to its income. The global automotive industry is gradually moving towards electric vehicles. Tesla stands to be the biggest beneficiary of this trend.
Despite the chip crisis, Tesla announced record shipments of 310,048 units in the first quarter of 2022. In addition, TSLA’s energy generation and storage revenues are increasing, thanks to the positive reception of the Megapack and Powerwall products.
Zacks Rank #2 TSLA has a projected profit growth rate of 66.1% for the current year. The Zacks consensus estimate for current year earnings has improved 13.6% over the past 7 days. Tesla is currently trading at a 29.4% discount from its 52-week high.
Pool is the world’s largest wholesale distributor of swimming pool supplies, equipment and related products. POOL is benefiting from strong core business performance, significant market presence and strategic expansions through acquisitions.
Strong demand for pool heaters, pumps, filters, lighting, automation and renovation also benefited. POOL remains optimistic on the back of products (such as home automation and connected swimming pools), the continuation of deurbanization trends and the strengthening of migration to the south.
Zacks Rank #2 POOL has an expected profit growth rate of 20.8% for the current year. The Zacks consensus estimate for current-year earnings has improved 4.4% over the past 7 days. POOL is currently trading at a discount of 28.2% from its 52-week high.
Alcoa produces and sells bauxite, alumina and aluminum products in the United States, Spain, Australia, Brazil, Canada and abroad. AA operates through three segments: bauxite, alumina and aluminum.
Alcoa is engaged in bauxite mining operations and processes bauxite into alumina and sells it to customers who process it into industrial chemicals. AA offers primary aluminum in alloy ingot or value-added ingot form to customers who manufacture products for the transportation, building and construction, packaging, wire and other markets. industrial markets, as well as flat-rolled aluminum sheets to customers who produce beverage and food cans. .
Zacks Rank #1 AA has an expected earnings growth rate of over 100% for the current year. The Zacks consensus estimate for current-year earnings has improved 8.8% over the past 30 days. Alcoa is currently trading at a 28.1% discount to its 52-week high.
Zebra Technologies should benefit from a solid demand environment, coupled with investments in growth initiatives, over the coming quarters. The growing popularity of ZBRA’s Enterprise Asset Intelligence solutions should be beneficial. Strong cash flow allows it to invest in organic growth, make acquisitions and buy back shares. For 2022, Zebra Technologies expects net sales to grow 3-7% year over year.
Zacks Rank #2 ZBRA has an expected earnings growth rate of 7.2% for the current year. The Zacks consensus estimate for current-year earnings has improved 0.2% over the past 30 days. Zebra Technologies is currently trading at a 37.7% discount to its 52-week high.
SVB Financial is a diversified financial services company. Growth in loan and deposit balances, efforts to improve non-interest income (MoffettNathanson acquisition) and global expansion strategy will likely continue to support SIVB’s finances.
The acquisitions of Boston Private and WestRiver Group’s debt investment business are expected to be earnings accretive and will likely help SVB Financial further solidify its foothold in the innovation economy.
Zacks Rank #2 SIVB has an expected earnings growth rate of 6% for the current year. The Zacks consensus estimate for current year earnings has improved 14% over the past 7 days. SVB Financial is currently trading at a 32.5% discount to its 52-week high.
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Past performance is not indicative of future results. The potential for loss is inherent in any investment. This document is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold any security. No recommendation or advice is given as to whether any investment is suitable for any particular investor. It should not be assumed that investments in the securities, companies, sectors or markets identified and described have been or will be profitable. All information is current as of the date hereof and is subject to change without notice. The views or opinions expressed may not reflect those of the company as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management of securities. These returns come from hypothetical portfolios composed of stocks with Zacks Rank = 1 that have been rebalanced monthly without transaction fees. These are not the returns of actual stock portfolios. The S&P 500 is an unmanaged index. To visit https://www.zacks.com/performance for more information on the performance figures displayed in this press release.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.