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Valvoline, Vista Outdoor and NVIDIA highlighted as Zacks Bull and Bear of the Day

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For Immediate Release

Chicago, IL - February 10, 2017 - Zacks Equity Research highlights Valvoline Inc. (NYSE: VVV - Free Report ) as the Bull of the Day Vista Outdoor Inc. (NYSE: VSTO - Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on NVIDIA Corp. (NASDAQ: NVDA - Free Report ).

Here is a synopsis of all three stocks:

Bull of the Day :

Valvoline Inc. (NYSE: VVV - Free Report ) is seeing momentum in its business since it was spun-off from Ashland last year. This Zacks Rank #1 (Strong Buy) recently beat and raised full year guidance.

Valvoline operates and franchises more than 1,070 Valvoline Instant Oil Change centers in the United States. It also markets Valvoline lubricants and automotive chemicals as well as SynPOwer synthetic motor oil and Zerex antifreeze.

Acquisition of 28 New Stores

On Feb 3, Valvoline closed on its previously announced acquisition of 28 Time-It Lube quick-lube stores. Time-It Lube has a heavy presence in East Texas and Louisiana, where it was founded in 1987.

It employed 200 people.

The acquisition will grow Valvoline stores in areas where it previously didn't have a big presence.

A Big Beat in the First Quarter

On Jan 26, Valvoline reported its fiscal first quarter results and surprised on the Zacks Consensus by 16%, or $0.05. Earnings were $0.35 compared to the consensus of $0.30.

The quarter was driven by growth in premium product sales, an increase in stores, strong same-store-sales results and volume growth in international markets.

In North America, lubricant volume was up 2% to 24.1 million gallons.

Same store sales at the quick lubes rose 9% overall, with 9.5% for the company-owned stores and 8.9% for franchised stores. Store count rose to 1,076 at the end of the quarter, a gain of 120 stores year over year due to the acquisition of Oil Can Henry.

In its international business, lubricant volume grew 12% to 13.7 million gallons. Emerging markets volume rose 16% with mature markets volume gaining by 8%.

Raised Full Year Guidance

The strong performance in the first quarter meant the company could raise its EPS guidance for the full year.

Revenue is now expected to rise 4% to 7% versus prior guidance of 3% to 5%.

The analysts like what they heard. 4 estimates were raised since the report with the Zacks Consensus jumping to $1.37 from $1.31. That's earnings growth of 4.9%.

Bear of the Day :

Vista Outdoor Inc. (NYSE: VSTO - Free Report ) is feeling the sting of the Trump presidency as gun and gun ammunition sales slowed after the election. This Zacks Rank #5 (Strong Sell) just warned on its fiscal year.

Vista Outdoor makes products for the sports and recreation markets. It has two segments: Outdoor Products and Shooting Sports.

In Outdoor Products, it makes hydration solutions, outdoor cooking solutions, optics and eyewear, including binoculars and laser rangefinders as well as trail cameras, game calls, reloading equipment, targets, safety and protective eyewear and stand up paddleboards and accessories.

In Shooting Sports it designs and makes ammunition, long guns and related equipment for hunters and sport-shooting enthusiasts as well as federal and local law enforcement agencies and the military. It makes pistols, rifles, rimfire, shotshell ammunition, primers, centerfire rifles, rimfire rifles, shotguns and range systems.

Its products are sold at retail stores and distributors across North America.

The Obama Gun Trade is Over

President Obama's election in 2008 created a new golden age for the gun makers as gun sales spiked to all time highs and, with some ups and downs, mainly held near the record high throughout the 8 years of the Obama Administration.

Sales also spiked heading into the November election on worries that Hillary Clinton would win the election and would impose further gun control legislation.

But Donald Trump won instead, and, apparently that has been a bad event for the gun and ammunition makers.

In its Feb 9 fiscal third quarter press release, Vista Outdoor warned on gun sales.

"The challenging retail environment we experienced in our first and second quarters worsened in our third quarter following a slow hunting season and the national elections. This resulted in the need for increased promotional activity to support sales and maintain market share," said Vista Outdoor Chairman and CEO Mark DeYoung.

"We have also seen increased inventory in our retail and wholesale channels."

As a result, it took an impairment charge in its hunting and shooting accessories unit in the quarter.

Warned on the Full Year

Given the tough environment, Vista Outdoor also warned about the full year results.

The tough market conditions actually accelerated in the fiscal third quarter. It expects full year gross margins to be the same as the third quarter results, which weren't good.

It also expects the pressures it faced in the last two quarters of fiscal 2017 to extend into fiscal 2018 but it will give formal 2018 guidance at its May earnings call.

Analysts were already negative on the company with 4 estimates cut in the last week.

The Zacks Consensus Estimate for fiscal 2017 had fallen to $2.43 from $2.68 in that time.

But the company just gave guidance of $1.95 to $2.10 so look for further estimate cuts.

Shares Plunged

The stock was down nearly 20% on the day of the third quarter results and warning. It's trading at just 10x forward earnings now.

Additional content:

NVIDIA Posts Strong Q4, Stock Slides on Guidance

NVIDIA Corp. (NASDAQ: NVDA - Free Report ) just released its fourth quarter fiscal 2017 financial results, posting earnings of 99 cents per share and revenues of $2.17 billion. Currently, NVDA is a #2 (Buy), and is down 1.93% to $113.97 in trading shortly after its earnings report was released.

Beat earnings estimates . The company reported GAAP earnings of 99 cents per diluted share, soaring past the Zacks Consensus Estimate of 83 cents per share and increasing a whopping 183% year-over-year.

Beat revenue estimates . The company saw record revenue figures of $2.17 billion, topping our consensus estimate of $2.080 billion and gaining 55% year-over-year.

NVIDIA reported record quarterly GAAP gross margin of 60% and non-GAAP gross margin of 60.2%.

The company notes that its GPU computing platform continues to power gains across its full product lines.

Looking ahead, to the first quarter of fiscal 2018, Nvidia expects revenue to be $1.90 billion, plus or minus 2%. GAAP and non-GAAP gross margins are expected to be 59.5% and 59.7%, respectively, plus or minus 50 basis points.

"Deep learning on NVIDIA GPUs, a breakthrough approach to AI, is helping to tackle challenges such as self-driving cars, early cancer detection and weather prediction. We can now see that ‎GPU-based deep learning will revolutionize major industries, from consumer internet and transportation to health care and manufacturing. The era of AI is upon us," said Jen-Hsun Huang, founder and CEO.

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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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Valvoline Inc. (VVV): Free Stock Analysis Report

Vista Outdoor Inc. (VSTO): Free Stock Analysis Report

NVIDIA Corporation (NVDA): Free Stock Analysis Report

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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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