Monday.com and Macy’s have been highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – July 11, 2023 – Zacks Equity Research shares Monday.com MNDY as the Bull of the Day and Macy’s M as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Aptiv APTV, Newmont NEM and Advanced Micro Devices AMD.

Here is a synopsis of all five stocks:

Bull of the Day:

Monday.com is a no-code productivity software that provides a platform for team collaboration and project management. It offers customizable features and tools to streamline workflows, improve productivity, and facilitate effective communication within organizations.

MNDY is a rapidly growing, high margin technology stock that has the potential to offer exceptionally strong returns. In addition to a Zacks Rank #1 (Strong Buy) boosting near term expectations, monday.com stock also boasts a compelling technical trade setup.

Upward Trending Earnings Estimates

Earnings estimates for monday.com have been revised dramatically higher over the last two months and now project positive earnings for the first time in the business’ history.

Current quarter expectations have been upgraded from -$0.22 per share to $0.14 per share and are forecast to climb 142% YoY. FY23 earnings estimates have been boosted from -$0.39 per share all the way to $0.58 per share and are expected to grow 180% YoY.

With management now focusing on running a net profitable enterprise investors can sit comfortably as the 88% gross margins begin to produce considerable earnings.

Sales at MNDY are forecast to grow very fast as well, with current quarter sales expected to increase 37% YoY, and FY23 sales set to climb 36% YoY.

Technical Setup

MNDY has been forming one of the cleanest stage one breakout patterns I have seen in some time. After getting hammered lower during the bear market of 2022, monday.com built out a 14-month base from which it may launch higher from.

With a very tight consolidation forming over the last few weeks, investors have a compelling risk-reward setup to trade off. If the price of MNDY stock can trade above the $168 level on above average volume, it could send the stock much higher. Alternatively, if the price trades below $158, the setup is invalid, and investors may want to wait for another opportunity.

Valuation

MNDY is currently trading at a one-year forward sales multiple of 10.2x, which is above the market average of 4x, and just above its two-year median of 9.8x. This is a premium valuation based on any measurement, but when you have the growth and business economics of monday.com investors are forced to pay up.

Additionally, at the current level, it is well below its 2021 highs of 48x sales, which demonstrates just how frothy the market was at that time.

Bottom Line

Monday.com is a hyper-growth business with a set of convincing variables writing a bullish narrative. Whether you are a trader looking for a quick profit opportunity or, an investor planning to hold for the long-term, monday.com fits the bill across the investment spectrum.

Bear of the Day:

Macy’s has been struggling to find its footing for years following the explosion of e-commerce options, and it doesn’t look like it will be improving any time soon.

The top and bottom lines of the struggling retailer have experienced YoY declines in the trailing twelve months, and both are nearly flat over the last decade.

While Macy’s is currently trading near its cheapest valuation in more than 10 years, a Zacks Rank #5 (Strong Sell), reflecting falling earnings estimates, and an unclear path forward make it a stock investors should avoid.

Plummeting Earnings Estimates

While M battles to remain relevant in a rapidly shifting retail environment, it also faces macro headwinds adding to an even more grim setup. Waning consumer confidence and a pull back in household spending have led analysts to further downgrade sales and earnings expectations.

Current quarter earnings estimates have been cut by a brutal -84% over the last two months and are expected to fall -88% YoY. FY23 earnings expectations have been downgraded by -21.6% and are forecast to decline -35% YoY.

Current quarter sales are projected to fall -9.3% YoY and FY23 sales are set to decline 6% YoY.

Valuation

Macy’s is trading at a one-year forward earnings multiple of 5.4x, which is below the industry average of 7.6x, and below its 10-year median of 8.5x. While this does present a considerable historical discount, the business faces a tremendous uphill battle to growing sales and earnings.

Bottom Line

While Macy’s seems unable to end its slow demise, it isn’t from lack of trying. Its recent three-year makeover, called the Polaris strategy has created a number of innovations to better adapt to the changing retail landscape.

Backstage locations, Vendor Direct, Store Pickup and Loyalty Program as well as a focus on products where the business has a foothold like jewelry and fragrances are all attempts to gain momentum. However, trying isn’t enough and the retail sector continues to play catchup with the e-commerce industry.

Additional content:

3 Large-Cap Stocks Seeing Recent Upgrades

Large-cap stocks are a staple in almost every portfolio. They are well-established, have more analyst coverage, and frequently pay dividends, all undeniably significant benefits that make them so popular among investors.

And recently, three large-cap stocks – Aptiv, Newmont and Advanced Micro Devices – have all seen favorable upgrades from analysts.

Let’s take a closer look at each.

Aptiv

Aptiv is a designer and manufacturer of vehicle components and provides electrical, electronic, and safety technology solutions to the global automotive market. BofA Securities upgraded APTV shares to buy from neutral, with a $140 per share price target.

The company’s quarterly results have consistently come in above expectations as of late, exceeding both earnings and revenue expectations in three consecutive quarters. Just in its latest release, APTV delivered a modest EPS surprise and reported revenue nearly 7% ahead of expectations.

Keep an eye out for the company’s upcoming release expected in early August; the Zacks Consensus EPS estimate of $1.00 indicates a 350% improvement in earnings from the year-ago period. Analysts have been bullish, with the quarterly estimate being revised 5% higher since April.

In addition, Aptiv is projected to witness significant growth, with earnings forecasted to climb 27% in its current fiscal year (FY23) and a further 37% in FY24. Top line growth is also apparent, with sales forecasted to climb 10% and 12% in FY23 and FY24, respectively.

Newmont

Barclays upgraded NEM shares to overweight from equal-weight, with a $61 per share price target. The company has enjoyed positive earnings estimate revisions across the board, helping land the stock into a Zacks Rank #2 (Buy).

Shares could entice value-conscious investors, further reflected by the Style Score of “B” for Value. Shares presently trade at an 18.2X forward earnings multiple, well beneath the 23.1X five-year median and highs of 26.7X in 2022.

And for those with an appetite for income, NEM shares provide precisely that; shares currently yield a solid 3.8% annually, with the company’s payout growing by an impressive 40% over the last five years.

Advanced Micro Devices

Northfield Capital Markets upgraded AMD shares to outperform from market perform, with a price target of $150 per share. The stock has been a big-time outperformer year-to-date amid the tech rally, with shares up more than 70%.

Shares are trading near their 50-day moving average, a level that’s been primarily respected in past instances.

It’s worth noting that value-focused investors may not find AMD shares enticing, with the current 40.0X forward earnings multiple residing on the higher end of the spectrum. Still, market participants have had little issue forking up the premium given the company’s established nature in a critical industry.

Bottom Line

Large-cap stocks are found in nearly every portfolio, as they provide a solid level of defense and carry an established nature.

And recently, all three above have seen favorable upgrades among analysts.

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