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H&R Block, Bed Bath & Beyond and Big Five Sporting Goods highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL - June 28, 2017 - Zacks Equity ResearchH&R Block (NYSE: HRB - Free Report ) as the Bull of the Day, Bed Bath & Beyond (NASDAQ: BBBY - Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Big Five Sporting Goods (NASDAQ: BGFV - Free Report ).

Here is a synopsis of all three stocks:

Bull of the Day :

Headquartered in Kansas City, MO, H&R Block (NYSE: HRB - Free Report ) is a global consumer tax services provider. They have approximately 12,000 company-owned and franchise retail locations and 9,000 bilingual tax professionals and client service professionals in the US, other US territories, and on US military bases around the world. An H&R Block office is located within five miles of most Americans in addition to their online solutions.

Excellent Results

The company reported excellent results earlier this month as they appear to be benefitting from tightening labor markets and improving wages. Their Q4 FY 2017 ended Apr 30 adjusted earnings were $3.76 per share, ahead of the Zacks Consensus Estimate of $3.51.

"With competitive promotions, impactful marketing and an improved client experience, we achieved this goal and also produced strong financial results, all during a year in which the industry experienced a decline in returns," said the CEO.

Rising Estimates

Estimates have gone up significantly after excellent results. Zacks Consensus Estimates for the current and next year have gone up to $2.00 per share and $2.05 per share from $1.81 and $1.87 respectively, before the results. Rising estimates sent the stock back to a Zacks Rank #1 (Strong Buy).

Return Capital to Shareholders

The company continues to return cash to shareholders via dividends and share buybacks. With the results, they announced an increase in their quarterly dividend by 9%. This was a significant increase in their quarterly dividend for the second year in a row.

Since 2005, their dividends per share have grown at 6% CAGR, even though there were no dividend increases in FY14, FY15 and a portion of FY16 due to savings and loan holding company regulatory constraints.

The company has been paying quarterly dividends to its shareholders since going public in 1962. Their current dividend yield is 3.1%.

The Bottom Line

HRB is a Zacks Rank #1 (Strong Buy) stock with Zacks Style Scores of "A" for Value as well as Growth and "B" for Momentum, with a VGM Score of "A". It looks pretty good from industry and sector rank perspective look, which are in the top 8% and 31% respectively.

Going forward, they should also benefit from tax reforms promised by the Trump administration.

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Bear of the Day :

Founded in 1971, Bed Bath & Beyond (NASDAQ: BBBY - Free Report ) is an omnichannel retailer offering a wide selection of domestic merchandise and home furnishings.

The company operates 1,546 stores (as of February 2017), including 1,023 Bed Bath & Beyond stores, and remaining under the names of World Market, Cost Plus World Market, Cost Plus, buybuy BABY, CTS and Harmon, in the US and Canada. They also offer products through various websites.

Weak Results Reflect Rising Challenges

The company reported Q1 results last week. Adjusted earnings of 58 cents per share were down 27.5% year over year and also below the Zacks Consensus Estimate of 66 cents. Sales were also below estimates.

While comparable sales from digital channels had strong growth, comparable sales from stores declined in the mid-single-digit percentage range year-over-year.

Shares fell about 12% to their lowest level in eight years after the report.

Falling Estimates

Analysts have slashed their estimates for the company after weak results. Zacks Consensus Estimates for the current and next fiscal year have fallen to $4.04 per share and $3.91 per share from $4.29 each, before the results.

The company had missed in three out of past four quarters, with an average negative surprise of 7.1%.

The Bottom Line

In addition to disappointing foot traffic in malls, the retail space is going through a shift toward online shopping, particularly from Amazon. With tightening labor markets, wage pressure has also started hurting retailers.

The stock is down about 25% year-to-date but a rebound any time soon does not appear likely. Investors looking for a better play in the Retail sector could consider Big Five Sporting Goods (NASDAQ: BGFV - Free Report ), a Zacks Rank #1 (Strong Buy) stock.

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If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.

Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>

Get today's Zacks #1 Stock of the Day with your free subscription to Profit from the Pros newsletter:

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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H&R Block, Inc. (HRB): Free Stock Analysis Report

Bed Bath & Beyond Inc. (BBBY): Free Stock Analysis Report

Big 5 Sporting Goods Corporation (BGFV): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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