Dj Commercial Metals Company, Inst Holders, 3Q 2024 (Cmc)

For Immediate Release

Chicago, IL –November 13, 2024 – Zacks Equity Research shares Deckers Brands DECK, as the Bull of the Day and Commercial Metals CMC., as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Baker Hughes Co. BKR, EOG Resources Inc. EOG and Matador Resources Co. MTDR.

Here is a synopsis of all five stocks:

Bull of the Day:

Deckers Brands continues to operate at a high level as its brands, including UGG and HOKA, remain in demand. This Zacks Rank #1 (Strong Buy) is expected to grow sales by 13.6% in fiscal 2025.

Deckers Brands designs, markets, and distributes footwear, apparel and accessories for several brands including UGG, HOKA, Teva, Koolaburra and AHNU.

It sells in select department and specialty stores, company-owned and operated retail stores, and select online stores, including the company’s own websites in more than 50 countries and territories.

Big Beat in the Second Quarter of Fiscal 2025

On Oct 24, 2024, Deckers Brands reported its fiscal second quarter 2025 results and blew by the Zacks Consensus by $0.37. Earnings were $1.59 versus the consensus of $1.22.

It was the twelfth consecutive earnings surprise. Deckers has only missed once in the last 5 years. That’s an impressive record given that there was a pandemic in 2020.

Sales jumped 20.1% to $1.3 billion from $1.09 billion a year ago. Both direct-to-consumer (DTC) and Wholesale were strong. DTC net sales rose 19.9% to $397.7 million from $331.7 million.

While wholesale net sales rose 20.2% to $913.7 million from $760.2 million.

International was hotter than the United States. International sales jumped 33% to $457.4 million from $343.9 million a year ago. Domestic, or US sales, jumped “only” 14.2% to $853.9 million from $748 million.

Gross margin also jumped, rising to 55.9% from 53.4% last year.

Just a reminder that this quarter is NOT the holiday quarter where retailers often put it all on the line for the year.

HOKA Continues to see Exploding Growth

Deckers two largest brands are HOKA and UGG. Between them they saw over a billion in sales in the quarter.

HOKA is growing faster, as sales rose 34.7% to $570.9 million up from $424 million last year.

UGG, however, still saw 13% sales growth to $689.9 million from $610.5 million a year ago. UGG Is an established brand yet, it was still able to grow in the double digits.

Deckers smaller brands, including Teva and Sanuk, had mixed results. Teva sales rose 2.3% to $22 million from $21.5 million a year ago.

Sanuk sales decreased 47.6% to $2.8 million from $5.4 million last year but Deckers sold the brand on Aug 15, 2024.

A group of its other smaller brands, comprising mostly of Koolaburra, saw sales decline 15.8% to $25.8 million from $30.6 million.

Deckers Has a Pristine Balance Sheet

Everything is operating on all cylinders for Deckers. It recently completed a 6-for-1 stock split and has a new CEO.

It has cash, and cash equivalents, on hand of $1.226 billion which is up from $823.1 million a year ago.

Deckers has NO outstanding borrowings.

Its inventories are also stable at $777.9 million, up from $726.3 million last year.

No Dividend, But Deckers Has a Big Stock Buyback Program

Deckers has a lot of cash on hand, but it doesn’t pay a dividend. Instead, it has a large share buyback program.

During the second quarter, it bought back shares worth $104.3 million. As of Sep 30, 2024, the company had about $685.4 million remaining under its stock repurchase authorization.

Analysts Raise Full Year Earnings Estimates

Given all the good news, and yet another big earnings beat, it is not a surprise that the company raised its full year earnings guidance to a range of $5.15 to $5.25. The analysts followed suit.

10 estimates were raised for fiscal 2025 in the last 30 days and one in the last week which pushed up the Zacks Consensus to $5.47 from $5.28 30 days ago. That is well above the high end of the company’s guidance range of $5.25.

It is also earnings growth of 12.6% as the company made $4.86 last year.

Here’s what it looks like on the price and consensus chart.

Shares Up Big in 2024

Shares of Deckers hit new highs earlier in the year and then pulled back. But they’re close to breaking out again.

Deckers is up more than double the S&P 500 year-to-date.

For a growth stock, it’s still attractive. It trades with a price-to-earnings (P/E) ratio of 32.4.

For investors looking for a red-hot retail and shoe stock, Deckers is one to keep on the short list.

Bear of the Day:

With the market rocketing to all-time highs, it can feel like any stock you decide to invest in will go straight up. That could not be further from the case. There are copious risks still out there in the market. When the euphoria following the election wears off, the tide will come in. When the pullback arrives, you want to be ready to buy stocks with strong earnings trends on the dip. You’ll also want to avoid stocks which have seen their earnings move in the wrong direction.

Today’s Bear of the Day is a stock that has seen its earnings picture deteriorate. The trend coming from analysts across Wall Street is to revise expectations to the downside. That’s not what you want to see over the long run as an investor. Today’s Bear of the Day is Commercial Metals.

Commercial Metals Company manufactures, recycles, and fabricates steel and metal products, and related materials and services in the United States, Poland, China, and internationally. The company processes and sells ferrous and nonferrous scrap metals to steel mills and foundries, aluminum sheet and ingot manufacturers, brass and bronze ingot makers, copper refineries and mills, secondary lead smelters, specialty steel mills, high temperature alloy manufacturers, and other consumers.

Commercial Metals is currently a Zacks Rank #5 (Strong Sell). The reason for the unfavorable rank is recent negative earnings revisions coming from analysts all over Wall Street. Over the last thirty days, three analysts have cut expectations for the current year while two have done so for next year. The negative revisions have dropped our Zacks Consensus Estimate for the current year from $5.59 to $4.35 while next year’s number is off from $6.00 to $5.42. The good news for long-term investors is that 24% earnings growth is still forecast for next year.

The Steel Producers industry ranks in the Bottom 9% of our Zacks Industry Rank. There are no stocks in that industry which are in the good graces of our Zacks Rank.

Additional content:

U.S. Rig Count Remains Steady: What Does This Mean for EOG, MTDR?

In its last weekly release, Baker Hughes Co. stated that the U.S. rig count was in line with the prior week’s figure. The rotary rig count, issued by BKR, is usually published in major newspapers and trade publications.

Baker Hughes’ data, issued at the end of every week since 1944, helps energy service providers gauge the overall business environment of the oil and gas industry. The number of active rigs and its comparison with the week-ago figure indicates the demand trajectory for the company’s oilfield services from exploration and production companies.

With the weekly rig count remaining steady, should investors keep an eye on leading oil and gas exploration companies like EOG Resources Inc. and Matador Resources Co.? Before diving into that, let's explore the latest rig count data details.

Baker Hughes’ Data: Rig Count in Detail

Total U.S. Rig Count Flat: The number of rigs engaged in the exploration and production of oil and natural gas in the United States was 585 in the week ended Nov. 8, in line with the week-ago count. However, the current national rig count declined from the year-ago level of 616, reflecting the fact that there has been a slowdown in drilling activities. Some analysts see this downside as a sign of increased efficiency among shale producers, who may need fewer rigs. However, there are doubts among a few about whether certain producers have sufficient promising land for drilling.

Onshore rigs in the week that ended on Nov. 8 totaled 569, higher than the prior week's count of 568. In offshore resources, 14 rigs were operating, a decrease from the week-ago count of 16.

U.S. Oil Rig Count In Line: The oil rig count was 479 in the week ended Nov. 8, in line with the week-ago figure. The current number of oil rigs — far from the peak of 1,609 attained in October 2014 — was, however, down from the year-ago figure of 494.

U.S. Natural Gas Rig Count Flat: The natural gas rig count of 102 was flat with the week-ago figure. However, the count of rigs exploring the commodity was below the year-ago week’s tally of 118. Per the latest report, the number of natural gas-directed rigs is almost 94% lower than the all-time high of 1,606 recorded in 2008.

Rig Count by Type: The number of vertical drilling rigs totaled 16 units, lower than the week-ago count of 18. However, the horizontal/directional rig count (encompassing new drilling technology with the ability to drill and extract gas from dense rock formations, also known as shale formations) of 569 was higher than the prior-week level of 567.

Rig Tally in the Most Prolific Basin

Permian — the most prolific basin in the United States — recorded a weekly oil and gas rig count of 303, in line with the week-ago figure. The count was, however, below the prior-year level of 310.

Handsome Oil Price Boosts Resilience: EOG, MTDR to Gain

West Texas Intermediate (WTI) crude is currently trading at more than $68 per barrel, presenting an advantageous landscape for exploration and production. Despite moderation in drilling activity as upstream companies prioritize stockholder returns over production growth, the favorable pricing environment remains beneficial for energy producers.

U.S. oil and gas companies benefit from significantly lower breakeven WTI prices across all shale plays, particularly for existing wells. Furthermore, the average breakeven price for most new wells remains below current market levels, positioning upstream players for continued profitability in the current environment.

Amid the backdrop, investors seeking medium to long-term gains may keep an eye on energy stocks like EOG Resources and Matador Resources.

In the United States, EOG Resources is one of the foremost explorers and producers of oil and gas, with its crude reserves spanning across the United States and Trinidad. The company, carrying a Zacks Rank #3 (Hold), possesses an extensive inventory of high-quality drilling wells in low-cost, premium resources, ensuring a strong business outlook.

Matador's strategic focus on record production and cost-saving techniques is driving higher profitability per barrel and reducing overall expenses, creating a solid foundation for sustained long-term growth. The recent acquisition of Ameredev assets and their rapid, successful integration — resulting in additional production and lower costs — highlights Matador's operational efficiency. Furthermore, proceeds from the sale of Piñon Midstream are expected to strengthen the financial flexibility of MTDR, which carries a Zacks Rank #3, by reducing leverage ratios. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

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Zacks Investment Research

With the market rocketing to all-time highs, it can feel like any stock you decide to invest in will go straight up. That could not be further from the case. There are copious risks still out there in the market. When the euphoria following the election wears off, the tide will come in. When the pullback arrives, you want to be ready to buy stocks with strong earnings trends on the dip. You’ll also want to avoid stocks which have seen their earnings move in the wrong direction.

Today’s Bear of the Day is a stock that has seen its earnings picture deteriorate. The trend coming from analysts across Wall Street is to revise expectations to the downside. That’s not what you want to see over the long run as an investor. Today’s Bear of the Day is Commercial Metals (CMC).

Commercial Metals Company manufactures, recycles, and fabricates steel and metal products, and related materials and services in the United States, Poland, China, and internationally. The company processes and sells ferrous and nonferrous scrap metals to steel mills and foundries, aluminum sheet and ingot manufacturers, brass and bronze ingot makers, copper refineries and mills, secondary lead smelters, specialty steel mills, high temperature alloy manufacturers, and other consumers.

Commercial Metals is currently a Zacks Rank #5 (Strong Sell). The reason for the unfavorable rank is recent negative earnings revisions coming from analysts all over Wall Street. Over the last thirty days, three analysts have cut expectations for the current year while two have done so for next year. The negative revisions have dropped our Zacks Consensus Estimate for the current year from $5.59 to $4.35 while next year’s number is off from $6.00 to $5.42. The good news for long-term investors is that 24% earnings growth is still forecast for next year.

Here are three stocks added to the Zacks Rank #5 (Strong Sell) List today:

Bruker Corporation BRKR is a scientific instruments company. The Zacks Consensus Estimate for its current year earnings has been revised 7.3% downward over the last 60 days.

Commercial Metals Company CMC is a metals processing company. The Zacks Consensus Estimate for its current year earnings has been revised 14.5% downward over the last 60 days.

Concentrix Corporation CNXC is a customer experience management company.The Zacks Consensus Estimate for its current year earnings has been revised 5.5% downward over the last 60 days.

View the entire Zacks Rank #5 List.

Zacks Investment Research