UNH, NVDA Lead Mega-Cap Movers; WSM Soars in Large-Caps on Wednesday

ZTO Express’ ZTO third-quarter 2024 earnings of 41 cents per share improved year over year.

Find the latest EPS estimates and surprises on ZacksEarnings Calendar.

Total revenues of $1.52 billion improved year over year.

Detailed Operational Statistics

Revenues from the core express delivery business improved 18.1% year over year, owing to 15.9% growth in parcel volume and a 1.8% increase in unit price. KA revenues, including delivery fees from direct sales organizations established to serve core express KA customers, increased 122.1% as the proportion of higher-valued parcels, such as returned parcels from e-commerce platforms, continued to increase.

Revenues from freight forwarding services grew 0.8% year over year.

Revenues from sales of accessories, largely consisting of sales of thermal paper used for digital waybills' printing, climbed 27.6% year over year. Other revenues were mainly derived from financing services.

ZTO Express (Cayman) Inc. Price, Consensus and EPS Surprise

ZTO Express (Cayman) Inc. price-consensus-eps-surprise-chart | ZTO Express (Cayman) Inc. Quote

Gross profit improved 23.2% from the year-ago reported quarter on the back of revenue growth and cost productivity gain. Gross margin rate improved to 31.2% from 29.8% in the year-ago period.

Total operating expenses were RMB493.0 million (US$70.3 million) compared with RMB282.8 million in the year-ago period.

ZTO Express exited the third quarter of 2024 with cash and cash equivalents of RMB11.70billion compared with RMB 10.54 billion at the end of the prior quarter.

ZTO’s 2024 Guidance

ZTO Express updates its 2024 parcel volume guidance in the range of 33.7 billion-33.9 billion. The updated guidance represents an increase of 11.6-12.3% year over year.

Previously, ZTO expected 2024 parcel volumes in the range of 34.73-35.64 billion. The guidance represents an increase of 15%-18% year over year.

ZTO’s Zacks Rank

Currently, ZTO Express carries a Zacks Rank #4 (Sell).

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

Performances of Other Transportation Companies

Delta Air Lines DALreported third-quarter 2024 earnings (excluding 47 cents from non-recurring items) of $1.50 per share, which fell short of the Zacks Consensus Estimate of $1.56. Earnings decreased 26.11% on a year-over-year basis due to high labor costs.

DAL’s revenues of $15.68 billion surpassed the Zacks Consensus Estimate of $15.37 billion and increased 1.2% on a year-over-year basis, driven by strong air travel demand. Adjusted operating revenues (excluding third-party refinery sales) totaled $14.59 billion, flat year over year.

J.B. Hunt Transport Services, Inc.’sJBHT third-quarter 2024 earnings of $1.49 per share outpaced the Zacks Consensus Estimate of $1.42 but declined 17.2% year over year.

JBHT’s total operating revenues of $3.07 billionsurpassed the Zacks Consensus Estimate of $3.04 billion but fell 3% year over year. The downfall was caused by 5% and 6% decreases in gross revenue per load in Intermodal (JBI) and Truckload, respectively; declines in load volume of 10% and 6% in Integrated Capacity Solutions (ICS) and Dedicated Contract Services, respectively; and 6% fewer stops in Final Mile Services. These were partially offset by JBI load growth of 5%, which included growth in the transcontinental and eastern networks and a 3% increase in revenue per load in ICS. JBHT’s total operating revenues, excluding fuel surcharge revenues, decreased less than 1% from the year-ago quarter.

United Airlines Holdings, Inc. UAL posted third-quarter 2024 EPS (excluding 43 cents from non-recurring items) of $3.33, which surpassed the Zacks Consensus Estimate of $3.10. Earnings decreased 8.8% on a year-over-year basis.

UAL’s operating revenues of $14.84 billion beat the Zacks Consensus Estimate of $14.76 billion. The top line increased 2.5% year over year due to upbeat air travel demand. This was driven by a 1.6% rise in passenger revenues (accounting for 91.3% of the top line) to $13.56 billion. Almost 45,559 passengers traveled on UAL flights in the third quarter, up 2.7% year over year.

Zacks Investment Research

Target Corporation TGT reported third-quarter fiscal 2024 results, with the top and bottom lines falling short of the Zacks Consensus Estimate. While revenues saw a slight increase, earnings took a significant hit compared to the prior year due to cost pressures.

This Minneapolis, MN-based company posted comparable sales growth, but the pace slowed considerably from the preceding quarter. While comparable store sales declined, the drop was more than offset by an increase in comparable digital sales.

In response to lower-than-expected results, Target revised its fiscal 2024 earnings forecast downward. The retail bellwether also offered a cautious outlook for the final quarter, leading to a drop in Target’s shares during the pre-market trading session.

Target’s Quarterly Performance: Key Metrics and Insights

Target reported adjusted earnings of $1.85 per share, which missed the Zacks Consensus Estimate of $2.29 and declined from $2.10 reported in the year-ago period.

See the Zacks Earnings Calendar to stay ahead of market-making news.

The big-box retailer generated total revenues of $25,668 million, which came below the Zacks Consensus Estimate of $25,910 million. However, the metric improved 1.1% on a year-over-year basis. We note that sales rose 0.9% to $25,228 million, while other revenues jumped 11.5% to $440 million.

Meanwhile, comparable sales rose 0.3% in the third quarter, following a 2% increase in the preceding quarter. The metric reflected a decline of 1.9% in comparable store sales but an increase of 10.8% in comparable digital sales. We had expected a comparable sales increase of 1.8% for the quarter under discussion.

While traffic improved by 2.4%, the average transaction amount declined by 2%. Target saw beauty comparable sales increase by more than 6%, while the Food & Beverage and Essentials categories grew in the low-single digits year over year.

The gross margin contracted 20 basis points to 27.2%, against our expectation of a 90-basis point improvement. This can be attributed to higher digital fulfillment and supply-chain costs resulting from increased inventory levels, a rise in digital sales volume and new supply-chain facilities coming online. These were partly mitigated by lower book-to-physical inventory adjustments and the net effect of merchandising activities compared to the previous year.

The operating margin shrunk to 4.6% from 5.2% in the corresponding period last year. We had anticipated a 40-basis point improvement in the operating margin.

Target Corporation Price, Consensus and EPS Surprise

Target Corporation price-consensus-eps-surprise-chart | Target Corporation Quote

Target’s Financial Health Snapshot

This Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $3,433 million, long-term debt and other borrowings of $14,346 million and shareholders’ investment of $14,489 million. During the quarter, Target paid out dividends of $516 million.

Target repurchased 2.4 million shares worth $354 million during the quarter under review. At the end of the quarter, the company had about $9.2 billion remaining under the repurchase program approved in August 2021.

A Sneak Peek Into TGT’s Outlook

Target anticipates comparable sales to be flat in the fourth quarter of fiscal 2024. Both GAAP and adjusted earnings for the final quarter are expected to fall in the range of $1.85-$2.45 per share compared with $2.98 reported in the year-ago period.

However, Target now anticipates GAAP EPS and adjusted earnings for the fiscal year in the band of $8.30-$8.90 per share compared with the $8.94 reported in fiscal 2023. Earlier, the company had guided earnings between $9.00 and $9.70.

Shares of Target have advanced 9.5% year to date compared with the industry’s growth of 22.7%.

Don’t Miss These Solid Bets

Sprouts Farmers SFM, which is engaged in the retailing of fresh, natural and organic food products, currently sports a Zacks Rank #1 (Strong Buy). SFM has a trailing four-quarter earnings surprise of 15.3%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings implies growth of 12.2% and 29.6%, respectively, from the year-ago reported numbers.

McCormick & Company MKC is a global food company that manufactures, markets and distributes spices, condiments, seasoning mixes and other flavoring products. It currently carries a Zacks Rank #2 (Buy). MKC has a trailing four-quarter earnings surprise of 13.8%, on average.

The Zacks Consensus Estimate for McCormick & Company’s current financial-year sales and earnings suggests growth of around 0.6% and 8.2%, respectively, from the year-ago reported numbers.

Freshpet FRPT, which manufactures, distributes and markets natural fresh meals and treats for dogs and cats, currently carries a Zacks Rank #2. FRPT has a trailing four-quarter earnings surprise of 144.5%, on average.

The Zacks Consensus Estimate for Freshpet’s current financial-year sales and earnings suggests growth of 27.3% and 224.3%, respectively, from the year-ago reported numbers.

Zacks Investment Research

U.S. stocks were lower, with the Nasdaq Composite falling more than 200 points on Wednesday.

Shares of Williams-Sonoma, Inc. rose sharply during Wednesday's session after the company reported better-than-expected third-quarter financial results.

The company reported third-quarter adjusted earnings per share of $1.96, beating the analyst consensus of $1.78. Quarterly sales declined by 2.9% year-over-year to $1.8 billion, beating the street view of $1.79 billion. Comparable brand revenue was down 2.9% year-over-year.

Also, the company approved a $1 billion stock repurchase authorization.

Williams-Sonoma, Inc. shares gained 22.7% to $168.48 on Wednesday.

Here are some other big stocks recording gains in today's session.

• Red Cat Holdings, Inc. shares jumped 35.3% to $6.41. Palladyne AI and Red Cat expanded partnership for Teal Drones.
• Kingsoft Cloud Holdings Limited shares surged 33.3% to $6.12. The company reported third-quarter earnings on Tuesday.
• Alpha Teknova, Inc. rose 18.3% to $7.39.
• Sunnova Energy International Inc. gained 18.2% to $4.0701.
• Wix.com Ltd. gained 14.5% to $210.79 after the company reported better-than-expected third-quarter financial results and raised its FY24 revenue guidance. Also, multiple firms raised their respective price targets on the stock.
• ATRenew Inc. gained 13.8% to $2.8000 following third-quarter results.
• Global-E Online Ltd. shares rose 10.5% to $47.24 after the company reported better-than-expected quarterly financial results and raised its FY24 revenue outlook.
• HUTCHMED (China) Limited gained 10.1% to $18.44. HUTCHMED announced the appointment of independent non-executive director and member of board committee.
• Dolby Laboratories, Inc. gained 9.9% to $77.96 after the company reported better-than-expected fourth-quarter adjusted EPS results and issued FY25 EPS guidance above estimates.
• Bruker Corporation rose 9.2% to $52.69.
• Azenta, Inc. gained 9.2% to $44.68. Flex will replace Azenta in the S&P MidCap 400, and Azenta will replace Envestnet in the S&P SmallCap 600 effective prior to the opening of trading on Monday, Nov. 25.
• Alignment Healthcare, Inc. gained 6.6% to $11.82.
• Flex Ltd. gained 6.3% to $39.69.
• Keysight Technologies, Inc. rose 5.2% to $160.02 after the company reported better-than-expected quarterly financial results. Also, multiple firms raised their respective price targets on the stock.

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