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Kohl???s, Endo International and Costco as Zacks Bull and Bear of the Day

For Immediate Release         

Chicago, IL – March 8, 2018 – Zacks Equity Research highlights Kohl’s Corp. KSS as the Bull of the Day and Endo International PLC ENDP as the Bear of the Day. In addition, Zacks Equity Research provides analysis onCostco Wholesale Corporation COST.

Here is a synopsis of all three stocks:

Bull of the Day:

An American department store giant, Kohl’s Corp. was founded in 1962, and offers customers exclusive brand apparel, shoes, accessories, and home and beauty products. Brands include Simply Vera Vera Wang, Sonoma, APT 9, Croft & Barrow, Jennifer Lopez, Food Network, as well as national names like Levi’s, Dockers, and Columbia.

Recently, Kohl’s has begun working with other industry giants. Its partnership with Amazon, where it started selling the company’s smart home products and accepting the online retailer’s returns, ramped up earlier this year.

And, customers will soon be able to buy Aldi groceries at Kohl’s, as the retailer announced that it will be renting out some of its extra store space to a whole list of new partners.

Strong Holiday Quarter

Recently, the Zacks Rank #1 (Strong Buy) stock reported better-than-expected results for its fourth quarter.

Adjusted earnings of $1.87 flew past the Zacks Consensus Estimate of $1.77 and jumped nearly 30% from the prior-year quarter.

Thanks to solid sales and improved gross margin, revenues came in at $6.77 billion and grew 9.2% year-over-year. Gross margin expanded 43 basis points to 33.8%.

Comparable store sales rose 6.3% compared to a 2.2% decline reported in the year-ago quarter.

Back in the first quarter of 2014, Kohl’s implemented a strategic initiative called “Greatness Agenda” that was designed to drive transactions per store and sales. It seems to finally be yielding results, especially after this strong holiday quarter.

2018 Guidance

Based on a great fiscal 2017, Kohl’s management team expects comps growth in the range of flat to a rise of 2%, while revenue growth is anticipated in a band of negative 1% to positive 1% for 2018.

Gross margin is estimated to rise 10bps from last year, and earnings should fall in the range of $4.95 to $5.45 per share.

Estimates on the Rise

For Kohl’s, its bottom line is trending upward for the foreseeable future.

Earnings are expected to grow over 28% for the current quarter. Two analysts have revised their estimates upwards in the last 30 days, though just as many have also cut their estimate for the same time period.

Fiscal 2018 figures are also looking pretty promising, with nine estimates moving higher in the past month. The Zacks consensus estimate trend has jumped from $4.64 per share to $5.20 per share.

Earnings estimates for 2019 are on the rise as well, jumping from $3.58 per share to $5.53 per share in the last 60 days.

Can KSS Push Higher?

Shares of Kohl’s have gained about 20% since the start of the year, and almost 70% in the past one-year period. In comparison, the S&P 500 has returned roughly 2% and 14.9%, respectively.

Bear of the Day:

Endo International PLC is a global specialty healthcare company that develops, manufactures, markets, and distributes branded pharmaceutical and generic products as well as medical devices.

Headquartered in Dublin, Endo offers branded prescription products, including Lidoderm, Opana ER, Percocet, Voltaren Gel, Frova, Supprelin LA, Vantas, Valstar and Fortesta Gel for pain, urology, endocrinology, and oncology.

While the Zacks Rank #5 (Strong Sell) stock reported fourth quarter results that beat estimates, the company has been on a steady decline for a few years now. Is there any chance for a rebound for this drug maker?

Q4 Earnings: A Deep Dive

Last week, Endo reported results for its fiscal 2017 fourth quarter.

Earnings from continuing operations were 77 cents per share, beating the Zacks Consensus but declining significantly from the $1.77 reported in the year-ago quarter.

Revenues came in at $769 million, also topping our consensus estimate but falling 38% year-over-year thanks to the loss of marketing exclusivity in the first half of 2017 for its first-to-file products: the generic version of Zetia and the generic version of Seroquel XR, both of which were launched in Q4 2016.

Looking at Endo’s three main segments, U.S. Branded Pharmaceuticals sales were down 21% to $228 million, while U.S. Generic Pharmaceuticals recorded sales of $499 million in the quarter, down 43%.

Its International Pharmaceuticals division brought in sales of $41 million, down from $70 million in the year-ago quarter due to recent divestitures.

The Outlook Ahead

Management expects revenues between $2.6 billion and $2.8 billion, with earnings in the range of $2.15 and $2.55 per share, both metrics well below the Zacks Consensus Estimate of $3.06 billion and $2.86 per share, respectively.

As a result, analysts have been cutting their estimates for 2018.

For the current quarter, four analysts cut their outlook in the last 30 days, and earnings are expected to decline over 55% for this time period.

11 analysts have revised their estimates downward for the current fiscal year, with earnings estimates projected to fall about 38.5% in that time frame.

Looking at the next fiscal year, eight analysts have slashed their outlook in the last month, but earnings could grow about 4%. The current consensus has dipped from $3.08 to $2.46 per share.

What’s Next for Endo?

Shares of Endo are down about 6.7% so far this year, and have sunk well over 36% in the past one year. In comparison, its broader industry, Medical-Drugs, has managed to gain 1.31% and 1.64%, respectively.

Additional content:

Costco (COST) Misses on Q2 Earnings & Revenue Projections

Costco Wholesale Corporation just released its second quarter fiscal 2018 financial results, posting adjusted earnings of $1.42 per share and revenues of $32.28 billion. Currently, Costco is a Zacks Rank #3 (Hold) and is down nearly 1% to $185.60 per share in after-hours trading shortly after its earnings report was released.

COST:

Missed earnings estimates. The company posted adjusted earnings of $1.42 per share, falling short of the Zacks Consensus Estimate of $1.45 per share.

Missed revenue estimates. The company saw revenue figures of $32.28 billion, missed our consensus estimate of $32.72 billion.

Costco revenues jumped 10.8% from $29.13 billion in the year-ago period. On top of that, the big-box giant noted that its same-store U.S. sales jumped by 7.1%, while e-commerce sales climbed by 28.5%.

The new Republican tax law positively impacted the company’s non-adjusted earnings per share by $0.17.

Costco Wholesale Corporation operates an international chain of membership warehouses, mainly under the Costco Wholesale name, that carry quality, brand name merchandise at substantially lower prices than are typically found at conventional wholesale or retail sources.

Check back later for our full analysis on COST’s earnings report!

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Endo International PLC (ENDP): Free Stock Analysis Report
 
Costco Wholesale Corporation (COST): Free Stock Analysis Report
 
Kohl's Corporation (KSS): Free Stock Analysis Report
 
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