Bloomin' Brands Inc : Deutsche Bank Cuts Target Price To $15 From $19

Bloomin’ Brands (BLMN), the parent company behind restaurant chains like Outback Steakhouse and Carrabba’s Italian Grill, has had a rough year. The stock has lost over 50% year-to-date, reflecting not only investor concerns but also stagnant sales growth over the past five years.

Additionally, Bloomin' Brands holds a Zacks Rank #5 (Strong Sell), signaling downward pressure on earnings estimates. As new dining options arise almost daily, Bloomin’ Brands faces an uphill battle to reignite growth, making it a challenging time for the restaurant operator and its shareholders.

For Immediate Release

Chicago, IL –November 14, 2024 – Zacks Equity Research shares Twilio TWLO, as the Bull of the Day and Bloomin’ Brands BLMN, as the Bear of the Day. In addition, Zacks Equity Research provides analysis on NVIDIA Corp. NVDA, BlackRock, Inc. BLK and Accenture plc ACN.

Here is a synopsis of all five stocks:

Bull of the Day:

Twilio has made an impressive comeback, shaking off the challenges of the last few years to become one of the most compelling mid cap tech stocks in today’s market. Once a high-flying stock, Twilio experienced a sharp decline as tech valuations reset in 2022. However, strong growth forecasts and a reasonable valuation have renewed investor interest.

Now a Zacks Rank #1 (Strong Buy), Twilio combines strong fundamentals with a powerful technical trading pattern, suggesting the potential for an extended bull run. This momentum, supported by a promising growth outlook and appealing valuation, could drive significant upside as Twilio continues its impressive turnaround.

With its powerful suite of APIs for cloud communications, Twilio enables businesses to seamlessly integrate messaging, voice, and video features into their apps, enhancing customer engagement at scale. This focus on connecting businesses and consumers digitally continues to position Twilio as a key player in the digital business transformation —an area expected to see substantial demand in the years ahead.

Powerful Earnings Revisions Trend Carries Stock Higher

Twilio’s earnings revisions trend has been accelerating upward since early 2023, even though the stock’s performance didn’t reflect this strength until recently. With sentiment now catching up, investors are taking notice of Twilio’s sharply improving earnings estimates, propelling the stock higher.

In just the last 30 days, earnings estimates for the current quarter have surged 16.3%, and projections for fiscal year 2025 earnings rose 10.5%. These positive revisions indicate confidence in Twilio’s growth trajectory and profitability, bolstered by demand for its communication and customer engagement tools as businesses prioritize digital transformation.

TWLO Stock Breaks Out from Technical Base

For the past two years, Twilio was largely overlooked as its stock hovered near historic lows. Recently, however, the tide has turned with a notable technical breakout, drawing renewed attention.

The share price surged past the $80 resistance level and has since climbed nearly $20 higher. This momentum suggests there may still be significant upside potential, supported by Twilio’s appealing valuation and promising growth forecasts.

Twilio Shares Appear Undervalued

Over the past two years, despite a stagnant stock price, Twilio's sales and earnings have continued to grow steadily. This resilience has helped bring its valuation to a more reasonable level of 26.5x forward earnings.

The appeal is even greater when considering Twilio's impressive growth trajectory: with earnings projected to increase at an annual rate of 41.8% over the next three to five years, the company trades at a PEG ratio of just 0.63, signaling a substantial discount based on this metric. This combination of moderate valuation and strong growth potential positions Twilio as an attractive opportunity for long-term investors.

Should Investors Buy TWLO Shares?

Twilio’s recent turnaround has made it a strong contender in the tech sector, showcasing not only robust growth potential but also an appealing valuation. After a challenging period, the company’s fundamentals and favorable earnings revisions have drawn new interest from investors. With a Zacks Rank #1 (Strong Buy) and an attractive PEG ratio, Twilio’s shares appear to offer value alongside growth.

Furthermore, the technical breakout and rapidly rising earnings projections suggest that Twilio may continue its upward momentum. However, as with any investment, potential buyers should carefully monitor price action and broader market conditions. For investors seeking exposure to a company driving digital transformation, Twilio presents a compelling growth opportunity.

Bear of the Day:

Bloomin’ Brands, the parent company behind restaurant chains like Outback Steakhouse and Carrabba’s Italian Grill, has had a rough year. The stock has lost over 50% year-to-date, reflecting not only investor concerns but also stagnant sales growth over the past five years.

Additionally, Bloomin' Brands holds a Zacks Rank #5 (Strong Sell), signaling downward pressure on earnings estimates. As new dining options arise almost daily, Bloomin’ Brands faces an uphill battle to reignite growth, making it a challenging time for the restaurant operator and its shareholders.

Bloomin' Brands Stock and Earnings Estimates Crater

Bloomin' Brands has seen its earnings outlook deteriorate sharply over the past two years, reflecting a lack of growth momentum and increasing challenges in the restaurant industry. This trend has intensified recently: current-quarter earnings estimates dropped a steep 28.4% in the past week alone, while fiscal 2024 estimates fell 9.6% over the same period.

Additionally, the company’s Earnings ESP (Expected Surprise Prediction) stands at -20.2%, which indicates a high likelihood of missing expectations at the next quarterly report. This negative sentiment reflects the broader struggle Bloomin' Brands faces as it tries to regain consumer interest.

BLMN Stock Price Breaks Down Below Support

The recent price action in Bloomin’ Brands stock is another red flag for investors. After a prolonged period of consolidation lasting around four months, the stock failed to hold its support level, leading to a decisive breakdown.

This move below support signals a lack of buyer interest, with selling pressure overtaking demand. The breakdown suggests that the stock could continue its downward trajectory unless there is a significant catalyst or shift in market sentiment.

Investors should exercise caution as the lack of support levels below this range could lead to further declines if selling momentum persists.

Should Investors Avoid BLMN Stock?

Given Bloomin' Brands’ steep YTD losses, declining earnings forecasts, and recent technical breakdown, the company appears to be navigating a tough path forward. With increasing competition from new dining concepts and a volatile consumer environment, Bloomin’ Brands faces an uphill battle to regain investor confidence.

For investors, the company’s downward price action, coupled with weak earnings estimates and technical signals, suggests that caution is warranted. Without a clear growth catalyst or stabilization in its financial metrics, BLMN may struggle to recover in the near term. For those interested in the restaurant space, exploring other companies with stronger financials and growth trends could be a more favorable approach at this time.

Additional content:

3 Crypto Stocks to Gain as Bitcoin Hits New Milestone

The cryptocurrency market is on a rally, with Bitcoin (BTC) hitting multiple milestones over the past week. Bitcoin started the year on a high, extending its gains from 2023. However, the rally came to a halt in the second quarter. Market experts had predicted that the cryptocurrency still has much potential and the rally would resume in the second half of the year.

The recent rally is being fueled by Donald Trump’s landmark victory in the Presidential election coupled with another interest rate cut by the Federal Reserve last week. Given this situation, investing in Bitcoin-centric stocks like NVIDIA Corp., BlackRock, Inc. and Accenture plc, which have strong growth potential for the near term, would be a prudent choice.

Bitcoin Rallies Past $90,000

Last week, Bitcoin surpassed $75,000 for the first time, hours after the nation went to polls to elect the 47th President. The cryptocurrency has not looked back since then. Bitcoin had earlier hit an all-time high of $73,770 in March but suffered over the next three months.

However, it staged a rebound in mid-September after the Federal Reserve announced a 50-basis point interest rate cut, ending its monetary tightening campaign in its bid to curb the 40-year-high inflation.

The rally was further fueled last week following Trump’s victory in the election that saw Bitcoin hitting a fresh high. Earlier this week, Bitcoin surpassed $80,000 for the first time and on Tuesday, it hit a new milestone of $90,000, gaining 34% since Trump’s win. The cryptocurrency was last trading at $87250 and is on track to surpass $100,000 in the near term.

Trump promised during his campaign to make the United States a leader in the digital asset sector, which would involve building a strategic Bitcoin reserve and selecting regulators who are enthusiastic about digital assets. The positive sentiment is now boosting Bitcoin. Also, the Federal Reserve cut interest rates by 25 basis points last week, its second straight interest rate cut in three months, which bodes well for the crypto market.

Crypto Stocks with Upside

NVIDIA Corporation

NVIDIA is a major player in the semiconductor industry and has been one of the standout success stories of 2023. As a leading designer of graphic processing units (GPUs), the value of the NVDA stock tends to surge in a thriving crypto market. This is primarily due to the crucial role that GPUs play in data centers, artificial intelligence, and the mining or production of cryptocurrencies.

NVIDIA’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 60 days. Currently, NVIDIA has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

BlackRock

BlackRock is one of the world’s largest investment managers and is publicly owned. BLK was among the first companies from the traditional market to join the Bitcoin ETF race back in June 2023.

BlackRock’s expected earnings growth rate for the current year is 14.3%. The Zacks Consensus Estimate for current-year earnings has improved 4.4% over the past 60 days. BLK currently sports a Zacks Rank #1.

Accenture plc

Accenture plc is a worldwide system integrator that offers consulting, technology and various other services. The company promotes Ethereum-based blockchain solutions to businesses, aiming to simplify payment processing.

Accenture’s expected earnings growth rate for the current year is 6.9%. The Zacks Consensus Estimate for current-year earnings has improved 1.4% over the last 60 days. ACN currently carries a Zacks Rank #2.

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