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Dillard's, Discovery, CF Industries, Nutrien and Yara International highlighted as Zacks Bull and Bear of the Day

·12-min read

For Immediate Release

Chicago, IL – June 10, 2021 – Zacks Equity Research Shares of Dillard's, Inc. DDS as the Bull of the Day, Discovery, Inc. DISCA as the Bear of the Day. In addition, Zacks Equity Research provides analysis on CF Industries Holdings, Inc. CF, Nutrien Ltd. NTR and Yara International ASA YARIY.

Here is a synopsis of all five stocks:

Bull of the Day:

Retail has been under attack in recent years. Seriously, it’s been years that the brick-and-mortar stores have been at the mercy of online giants. It does not matter whether you are selling clothes, accessories, groceries, electronics or cars, the online marketplace has shaken you to the core. Then, go ahead and throw in a little thing now known as “COVID-19” and you have a recipe for disaster. Some would call it the perfect storm. Yet, despite all this, there are retailers which are adapting and thriving in this environment.

One such retailer is today’s Bull of the Day, Dillard’s. Dillard's, Inc. operates retail department stores in the southeastern, southwestern, and midwestern areas of the United States. Its stores offer merchandise, including fashion apparel for women, men, and children; and accessories, cosmetics, home furnishings, and other consumer goods. As of January 30, 2021, the company operated 282 Dillard's stores, including 32 clearance centers, and an Internet store at dillards.com. It also engages in the general contracting construction activities. 

Currently, Dillard’s is a Zacks Rank #1 (Strong Buy) in the Retail -Regional Department Stores industry which ranks in the Top 14% of our Zacks Industry Rank. In addition to the favorable rank, Dillard’s enjoys a Zacks Value Style Score of B, Growth Score of A and Momentum of C to help it round out with a VGM Composite Score of A.

The reason for the favorable rank lies in the series of recent estimate revisions coming from analysts. A lot of that has to do with the previous quarter’s earnings report. Last quarter’s report came in with EPS of $6.37. That far exceeded expectations calling for $1.20. That was the latest in a string of huge beats for the company. In fact, over the last four quarters the company has beat earnings by an average of $3.12 each quarter.

That prompted analysts to up the ante. Three analysts have increased their earnings estimates for the current year and next year. The bullish move in estimates has pushed the Zacks Consensus Estimate for the current year from $2.22 to $14.26. Next year’s number is up from $2.55 to $5.79.

Bear of the Day:

With the market up near all-time highs, finding a “bearish” story can be tough. I mean, the proof is in the pudding right? What I am finding, and a lot of us at Zacks are too, is folks are misinterpreting our Bull and Bear of the Day articles. These are not meant to be predictions of what is likely to come over the next day, week, month or year. Rather, they are merely meant to point out bullish or bearish trends in earnings estimates coming from analysts all over Wall Street. They are to shed light rather than to force a conviction.

Today’s Bear of the Day is Discovery. I have to admit, I personally have Discovery+ and enjoy streaming the shows weekly. Yes, that’s right, I am a “90-Day Fiance” fanatic. (I may or may not have ran into Darcey and Stacey at Drunken Dragon in Miami last week.)

For the un-initiated, Discovery, Inc., a media company, provides content across various distribution platforms in approximately 50 languages worldwide. It operates in two segments, U.S. Networks and International Networks. The company owns and operates various television networks under the Discovery Channel, HGTV, Food Network, TLC, Animal Planet, Investigation Discovery, Travel Channel, Science, MotorTrend, Discovery en Español, Discovery Familia, Eurosport, TVN, Discovery Kids, Discovery Family, American Heroes Channel, Destination America, Discovery Life, DIY Network, Cooking Channel, Great American Country, ID, the Oprah Winfrey Network, Eurosport, DMAX, and Discovery Home & Health brands, as well as other regional television networks.

The stock had a huge run thanks to a notorious hedge fund loading the boat. Since the fund blew up, the stock has come under considerable pressure, prior to its now famous merger with Warner Media. The earnings estimates, on the other hand, tell a much more bearish story. Currently, the stock is a Zacks Rank #5 (Strong Sell). The reason for the unfavorable rank is that five analysts have cut their earnings estimates for the current year while six have followed suit for next year. The impact to the Zacks Consensus Estimate is pretty dramatic. The current year consensus has been cut from $2.88 to $2.11 while next year’s number is off from $3.36 to $2.72.

The Broadcast Radio and Television industry ranks in the Top 48% of our Zacks Industry Rank. While Discovery is currently a Zacks Rank #5 (Strong Sell), there are other stocks within the same industry which have a much more favorable rank.

Additional content:

3 Fertilizer Stocks to Reap Benefits of Strong Demand and Prices

The fertilizer industry is riding on solid market fundamentals underpinned by strong global demand and prices for crop nutrients. The underlying strength of the agricultural market, rising crop commodity prices and healthy farm economics are driving demand for fertilizers globally.

Demand for fertilizers is also backed by the need to grow the production of grains to address rising consumption. Moreover, the constant need of growers to nourish their crops, replenish nutrients in the soil following a harvest and boost yields to feed a growing population support the bullish case for fertilizers.

Strong farm profits and higher planted acreage are expected to drive demand for fertilizers in the United States this year. Strong grower economics are also likely to support demand in other major markets such as Brazil and India. A tight global supply-demand balance is also driving fertilizer prices.

Farm economics have strengthened in the United States on the back of a spike in crop commodity prices and government support. According to the U.S. Department of Agriculture (“USDA”), net farm income is projected to be $111.4 billion in 2021. While net farm income is forecast to dip 8.1% from the 2020 level due to lower federal payments to farmers, it would still be 21% higher than its 2000-19 average, based on USDA projections.

It is worth noting that farm profits shot up to their highest level in seven years in 2020 on the back of record levels of federal payments to growers in the wake of the pandemic. Notwithstanding the expected year-over-year decline, solid farm income backed by higher agricultural commodity prices is likely to incentivize farmers to spend on crop nutrients this year.

Meanwhile, phosphate markets are likely to remain robust in the near term on solid demand and pricing dynamics. Tight availability along with firm demand is driving up phosphate prices globally. Potash prices have also strengthened on the back of robust global demand, aided by strong grower economics, higher crop prices and low global inventory levels.

Demand for nitrogen fertilizer also remains healthy in major markets. Global nitrogen requirement is being driven by demand in North America, India and Brazil. Healthy corn acres in the United States are expected to spur nitrogen demand in North America in 2021. Moreover, demand for urea imports into Brazil and India remains favorable. Lower global supply availability stemming from reduced operating rates and a spike in energy prices are also likely to boost nitrogen prices.  

Moreover, strong global demand coupled with supply constraints have provided a boost to crop commodity prices. Notably, prices of corn and soybean have rallied to multi-year highs. Higher agricultural commodity prices bode well for crop nutrient demand. Expectations of higher planted corn and soybean acres globally this year on the back of higher crop prices also suggest a pickup in fertilizer demand.

Favorable Zacks Industry Rank

The Zacks Fertilizers industry currently carries a Zacks Industry Rank #25, which places it in the top 10% of more than 250 Zacks industries. The favorable rank reflects the industry’s strength. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.

Price Performance

The Zacks Fertilizers industry has outperformed the broader market in a year’s time. While the industry has rallied 73.1%, the S&P 500 has returned 34%.

3 Stocks Worth a Bet

The companies in the fertilizers space are well placed to benefit from strong pricing and demand dynamics for crop nutrients. Factors like healthy farm income and expectations of increased planted acres are expected to drive demand globally. As such, the time is ripe for the investors to add some fertilizer stocks that offer significant growth prospects.

Below we highlight three stocks with a solid Zacks rank that are good options for investment right now. Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer good investment opportunities.

You can see the complete list of today’s Zacks #1 Rank stocks here.

CF Industries Holdings: The Illinois-based company sports a Zacks Rank #1. The company should benefit from higher nitrogen fertilizer demand in major markets. Higher nitrogen prices are also expected to support the company’s bottom line. CF Industries also remains committed to boost shareholders’ value by leveraging strong cash flows.

The company has an expected earnings growth rate of 121.8% for the current year. The Zacks Consensus Estimate for current-year earnings for the company has also moved up 55.2% in the past 60 days. The company’s shares have also rallied around 80% over the past year.

Nutrien: This Canada-based company carries a Zacks Rank #2. The company should benefit from solid demand and higher prices for fertilizers, especially potash. It is expected to gain from strong potash sales volumes this year on the back of solid domestic and overseas demand.

Nutrien is also well placed to gain from acquisitions, cost efficiency and increased adoption of its digital platform. The company also continues to grow its footprint in Brazil through acquisitions, including Tec Agro.

Nutrien has an expected earnings growth rate of 78.3% for the current year. The Zacks Consensus Estimate for earnings for the current year has also been revised 18.5% upward over the last 60 days. The stock has also shot up roughly 71% over the past year.

Yara International: The Norway-based company has a Zacks Rank #2. It should benefit from the strength in the nitrogen fertilizer market. Rising nitrogen prices are expected to lend support to its margins. Yara should also gain from a recovery in its industrial business on the back of a rebound in demand.

The company has an expected earnings growth rate of 27.3% for the current year. The consensus estimate for earnings for the current year has also been revised 1% upward over the last 60 days. The stock has also gained roughly 50% over the past year.

Infrastructure Stock Boom to Sweep America

A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.

The only question is “Will you get into the right stocks early when their growth potential is greatest?”

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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CF Industries Holdings, Inc. (CF) : Free Stock Analysis Report
 
Discovery, Inc. (DISCA) : Free Stock Analysis Report
 
Dillards, Inc. (DDS) : Free Stock Analysis Report
 
Yara International ASA (YARIY) : Free Stock Analysis Report
 
Nutrien Ltd. (NTR) : Free Stock Analysis Report
 
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