Chicago, IL – October 24, 2024 – Zacks Equity Research shares Cirrus Logic CRUS as the Bull of the Day and Insteel Industries IIIN as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Target Corp. TGT, Bath & Body Works, Inc. BBWI and Macy's, Inc. M.
Here is a synopsis of all five stocks.
Cirrus Logic (CRUS) has become one of the more intriguing semiconductor suppliers as a developer of low-power, high-precision mixed signal processing solutions.
Increasing demand for Cirrus Logic’s portfolio of High-Performance Mixed Signal (HPMS) audio components lands its stocks a Zacks Rank #1 (Strong Buy) and the Bull of the Day.
Most exhilarating about Cirrus Logic’s financial performance is that the company has now surpassed the Zacks EPS Consensus for 13 consecutive quarters dating back to July of 2021.
Even better, Cirrus Logic has crushed earnings expectations in its last four quarterly reports posting an average EPS surprise of 56.6%. Cirrus Logic most recently blasted its fiscal first quarter EPS estimates by 80% in August with earnings at $1.12 per share compared to estimates of $0.62 a share.
With Circus Logic’s fiscal second quarter earnings approaching in early November, CRUS is benefitting from a positive trend of earnings estimate revisions.
Over the last 90 days, Q2 EPS estimates have remained 17% higher (Current QTR). Full-year EPS estiamtes for Cirrus Logic's current fiscal 2025 have risen 3% in the last seven days and are now up 8% over the last three months. Plus, FY26 EPS estimates have risen 1% over the last week and are up 2% in the last 90 days.
Cirrus Logic's annual earnings are now expected to rise 1% in FY25 and are slated to increase another 5% in FY26 to $7.03 per share.
Having a niche in regards to semiconductor products and solutions for the smartphone and laptop markets, Cirrus Logic’s top line expansion has remained attractive as well with total sales expected to increase 3% in FY25 and projected to rise another 6% in FY26 to $1.95 billion.
As one of the stock market’s better performers, CRUS has soared +40% this year which has roughly matched its Zacks Electronics-Semiconductors Market while impressively topping the benchmark S&P 500 and the Nasdaq’s gains of just over +20%.
Reassuringly, Cirrus Logic’s stock trades at just 18.6X forward earnings and at a pleasant discount to its electronics-semiconductors industry average of 33.3X and the benchmark’s 24.8X.
Considering the premiums many semiconductor stocks can command, Cirrus Logic’s valuation is very enticing. Now appears to be a good time to buy with earnings estimate revisions on the rise which further bolsters Cirrus Logic’s appealing P/E valuation and alludes to the notion that the company’s strong financial performance should continue.
Although Insteel Industries is one of the largest manufacturers of steel wire reinforcing products in the United States, the company has struggled to reach its appealing growth trajectory.
While it may be too soon to call Insteel’s stock a value trap, IIIN shares have fallen more than -25% this year. Unfortunately, more downside risk may be ahead landing Insteel’s stock a Zacks Rank #5 (Strong Sell) and the Bear of the Day.
Notably, Insteel’s stock plummeted more than -10% last Thursday after reporting subpar results for its fiscal third quarter. The dismal reaction comes as Insteel posted Q3 EPS of $0.24 which reached the Zacks Consensus but declined from $0.29 a share in the comparative quarter.
Further diminishing investor confidence was that Q3 sales fell -15% year over year to $134.4 million and missed estimates of $140.4 million by -4%. The dip on Insteel’s top and bottom lines come as the company saw a decrease in its steel shipments along with a decline in average selling prices (ASP).
Continuing an unsavory streak of missing top line expectations, earnings estimate revisions for Insteel’s current fiscal 2025 and FY26 have fallen -49% and -28% in the last week respectively. This largely suggests the decline in IIIN shares may continue and has started to dilute Insteel’s reasonable forward P/E valuation of 26.5X.
For now, Insteel’s stock looks like one that should be avoided especially considering the drastic decline in its earnings outlook. To that point, investor’s may not be so swayed by Insteel’s valuation with IIIN trading at less that 1X sales but starting to show remnants of a value trap.
Target Corp. is preparing for the upcoming holiday season, a critical period that contributes significantly to its annual revenues. As anticipation grows among both retailers and consumers, the company is focused on developing a strong strategy to attract shoppers. By taking a proactive approach such as price cuts, Target aims to capitalize on the opportunities presented during this festive period.
Target has announced significant price cuts on more than 2,000 items for the holiday season, spanning a wide variety of products from food and beverages to holiday gifts, household essentials and home preparation items. These reductions aim to make holiday shopping more affordable, providing financial relief to consumers as they prepare for festive gatherings and gift-giving. This move comes as part of Target’s ongoing pricing strategy, which includes routine adjustments to stay competitive across its markets.
The new discounts are in addition to Target’s everyday low prices and build on a promise made earlier in the year. In May, the company committed to lowering prices on around 5,000 items, a goal it exceeded by reducing prices on more than 8,000 products throughout the year. By the end of the holiday season, Target will have cut prices on more than 10,000 items in 2024.
For instance, in various markets nationwide, including cities like Phoenix, Dallas, Detroit and Atlanta, many stores, as well as Target.com and the Target app, are now showcasing these reduced prices. These price cuts reflect Target’s commitment to helping families celebrate the holiday season without financial strain. The company aims to provide savings on a wide range of products, making it easier for consumers to enjoy the festive season while staying within their budgets.
In addition to the new price reductions, Target is rolling out further ways to enhance the holiday shopping experience. The retailer is offering its largest-ever holiday product assortment, featuring thousands of toys, with more than half priced under $20. Shoppers will find exclusive products from both owned and national brands, as well as an array of gifts priced at $5 and $10, thus ensuring options for every budget.
Target is also focused on making holiday shopping more convenient. The free-to-join Target Circle loyalty program offers customers ways to save on everyday essentials and holiday gifts, with automatic discounts applied at checkout. Members of the program can also save an extra 5% when they use the Target Circle Card, further lowering costs during the holiday season.
Beyond discounts, Target offers flexible shopping options that fit customers' needs, including same-day delivery, curbside pickup and in-store shopping. To meet the increased holiday demand, the company is hiring approximately 100,000 seasonal workers across stores and supply-chain facilities. These seasonal roles will help in Order Pickup, Drive-up and fulfilling holiday orders, thereby ensuring fast and efficient service for customers.
Target is positioned to make a considerable impact this holiday season. With a solid operational strategy in place, the company is poised to capture a significant portion of holiday sales. By leveraging its strengths and effectively meeting customer needs, it aims to differentiate itself in the competitive retail market and achieve impressive results during this crucial sales period.
This Zacks Rank #2 (Buy) company’s shares have gained 37.3% in the past year compared with the industry’s 41.4% growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Target is committed to meeting holiday demand by ensuring adequate staffing and associates at the point of sale. In line with this, several major retailers have also announced their hiring plans for the upcoming holiday season. Bath & Body Works, Inc. and Macy's, Inc. are among the companies that are gearing up to add seasonal staff to meet the anticipated demand.
Bath & Body Works, which currently carries a Zacks Rank of #3 (Hold), is preparing to cater to the heightened shopping frenzy by adding 30,000 dedicated seasonal sales associates across its more than 1,800 stores in the United States, Canada and Puerto Rico. The holiday spirit extends to BBWI's distribution centers as well, with plans to hire approximately 2,700 employees across four central Ohio distribution centers.
Keeping in mind the festive rush, Macy’s, a Zacks Rank #4 (Sell) company, has announced plans to hire more than 31,500 full and part-time seasonal employees. These positions will support operations at Macy’s, Bloomingdale’s and Bluemercury stores, as well as its distribution centers.
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Macy's, Inc. (M) : Free Stock Analysis Report
Target Corporation (TGT) : Free Stock Analysis Report
Cirrus Logic, Inc. (CRUS) : Free Stock Analysis Report
Insteel Industries, Inc. (IIIN) : Free Stock Analysis Report
Bath & Body Works, Inc. (BBWI) : Free Stock Analysis Report
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