For Immediate Release
Chicago, IL - February 16, 2017 - Zacks Equity Research highlights ArcelorMittal ( NYSE: MT - Free Report ) as the Bull of the Day and Grubhub ( NYSE: GRUB - Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Energy Select Sector SPDR ETF (NYSEARCA: XLE- Free Report ), United States Brent OilFund (NYSEARCA: BNO- Free Report ) and United States Oil Fund ETF (NYSEARCA: USO- Free Report ).
Here is a synopsis of all five stocks:
Trump's plans to rebuild America's infrastructure have sent industrial metals surging post-election. Most steelmakers remain optimistic about the outlook for 2017 in anticipation of rising investments in infrastructure and manufacturing in the US.
About the Company
Luxembourg-based ArcelorMittal ( NYSE: MT - Free Report ) is the world's leading steel and mining company with about 114 million tons of annual production capacity and 210,000 employees across 60 countries.
They are the largest producer of steel in North and South America, the EU and Africa and have a growing presence in Asia.
They are also one of the largest producers of iron ore in the world with a global portfolio of 16 operating units with mines in operation or development.
Encouraging Fourth Quarter Results
The company swung to a profit in Q4. They reported a net income of $403 million compared to a net loss of $6.7 billion reported a year ago. The results in the previous year-ago quarter was hurt by impairment charges of roughly $4.7 billion.
Adjusted earnings of $0.16 per share were ahead of the Zacks Consensus Estimate of $0.13.
Revenues through up 1% year over year, were slightly shy of the Zacks Consensus Estimate.
Total steel shipments increased 1.6% year over year while average selling prices went up 3.5%.
"As we enter into 2017, I see there is a positive momentum both in the business and the market," said the CEO Lakshmi Mittal.
The CEO also hoped that current administration would take action to address the problem of rising cheap imports from China.
Analysts have been raising estimates for the steelmaker after much better-than-expected results.
Zacks Consensus Estimates for the current and next year have surged to $0.73 per share and $0.71 per share respectively from $0.65 each, before the report.
Grubhub ( NYSE: GRUB - Free Report ) provides online and mobile ordering platforms to enable diners to order directly from more than 50,000 takeout restaurants in over 1,100 US cities and London. They are headquartered in Chicago and also have offices in New York and London.
In late 2013, Grubhub and Seamless merged and their current portfolio portfolio of brands includes Grubhub, Seamless, MenuPages, Allmenus, LAbite, Restaurants on the Run, DiningIn and Delivered Dish. The company IPO'd in 2014.
They currently process more than 290,000 daily orders and serve approximately 8.2 million active diners.
The company reported disappointing Q4 results. Their adjusted earnings of 19 cents per share missed the Zacks Consensus Estimate of 20 cents per share.
"Building out more restaurants to order from is where we are looking to grow in 2017," said the CEO , adding that the company's penetration rate remains "dramatically below" 10% in core markets such as Chicago and New York City.
Shares plunged after the report.
For the current year, the management expects revenues in the range of $620 million to $660 million and adjusted EBITDA in the range of $165 million to $190 million.
Analysts have slashed their estimates for the company after disappointing results. Zacks Consensus Estimates for the current and the next fiscal year have plunged to $0.90 per share and $1.12 per share respectively, from $0.96 and $1.21, 7 days ago. Declining estimates sent the stock to a Zacks Rank #5 (Strong Sell).
U.S. Oil Inventories Surge Despite 90% OPEC Compliance
Despite OPEC on the edge of record conformity of 90% in reducing oil production, this week's EIA oil inventory report released bearish data.
U.S. commercial crude inventories have found record highs at 518.1 million barrels, which is an increase by 9.5 million from the previous week; gasoline stock piles topped for an all-time high, rising by 2.8 million barrels, for a current 259.1 million barrel pile.
Investors in oil related funds are being nipped due to the report. Energy Select Sector SPDR ETF (NYSEARCA: XLE- Free Report ) is down 0.46%, United States Brent Oil Fund (NYSEARCA: BNO- Free Report ) is down 0.13%, and United States Oil Fund ETF (NYSEARCA: USO- Free Report ) is down 0.09%.
Builds Due to Decreased Demand
Since the end of 2016, EIA data shows that gasoline inventories have jumped by 10%. However, the last 4 weeks has seen a decrease of overall demand by 5.3% year-on-year. Demand for gasoline in the U.S. sits at 8.43 million barrels per day.
"A build in gasoline stock is in tandem with seasonal norms and further builds are expected in the coming weeks as demand for the fuel remains low" commented Abishek Kumar, senior energy analyst at Interfax Energy's Global Gas Analytics.
An OPEC Update
OPEC has had a strong start in 2017 in reducing output to increase oil prices . However, with this, compliance nation-by-nation is mixed.
Saudi Arabia, the world's largest oil producer, has been dedicated to making the deal work and is expecting to reduce output by more than listed in agreements. Iraq was reported to only comply by 40%. Other non-OPEC nations, such as Russia, have minimally reduced output but their adherence is expected to increase.
In the last five years, oil has seen a wild series of price fluctuations. From a barrel of crude trading over $100 in 2013 to below $30 in 2016, the move to push global oil prices upwards is in play by OPEC. WTI crude oil is currently at $53.20 a barrel.
As discussions and overall world compliance in oil production increases, it looks like OPEC's endeavors for the long run will find success in increasing oil prices.
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About the Bull and Bear of the Day
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Strong Stocks that Should Be in the News
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