Advertisement
New Zealand markets closed
  • NZX 50

    11,931.32
    -2.99 (-0.03%)
     
  • NZD/USD

    0.5963
    -0.0036 (-0.61%)
     
  • NZD/EUR

    0.5593
    +0.0005 (+0.09%)
     
  • ALL ORDS

    8,050.20
    -23.90 (-0.30%)
     
  • ASX 200

    7,788.10
    -25.50 (-0.33%)
     
  • OIL

    86.02
    +1.00 (+1.18%)
     
  • GOLD

    2,412.50
    +39.80 (+1.68%)
     
  • NASDAQ

    18,307.98
    +296.33 (+1.65%)
     
  • FTSE

    8,010.44
    +86.64 (+1.09%)
     
  • Dow Jones

    38,459.08
    -2.43 (-0.01%)
     
  • DAX

    18,095.30
    +140.82 (+0.78%)
     
  • Hang Seng

    16,721.69
    -373.34 (-2.18%)
     
  • NIKKEI 225

    39,523.55
    +80.92 (+0.21%)
     
  • NZD/JPY

    91.3380
    -0.5430 (-0.59%)
     

Coinbase and Hertz Global have been highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – February 27, 2024 – Zacks Equity Research shares Coinbase COIN as the Bull of the Day and Hertz Global Holdings HTZ as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Chesapeake Energy's CHK, Coterra Energy CTRA and Cheniere Energy LNG.

Here is a synopsis of all five stocks:

Bull of the Day:

Zacks Rank #1 (Strong Buy) stock Coinbase is the largest domestic cryptocurrency exchange. Coinbase facilitates the buying, selling, and storing of various digital assets, including popular cryptocurrencies like Bitcoin and Ethereum. As a user-friendly platform, Coinbase allows individuals to create accounts, deposit funds, and trade cryptocurrencies. It provides a secure wallet for storing digital assets and offers additional features such as educational resources, price charts, and market insights.

Coinbase plays a pivotal role in the mainstream adoption of crypto, serving as a bridge between traditional financial systems and the evolving world of digital currencies. Additionally, Coinbase has expanded its services to include features like staking borrowing, and a professional trading platform known as Coinbase Pro.

Bitcoin ETFs = Most Successful Launch in History

After a long and drawn-out saga, the U.S. Securities and Exchange Commission (SEC) finally approvedeleven Bitcoin ETFs that recently began trading.After over a month of being live, the Bitcoin ETF has lived up to the hype and has become the most successful ETF launch in history. For example, Fidelity's Wise Origin Bitcoin Fund ETFand BlackRock'siShares Bitcoin Trust ETFhave brought in more assets in the first month than any other ETF launched by the two financial giants. That's saying something when you consider that Fidelity has 65 active ETFs and BlackRock has 426! Coinbase, which is the custodian for nearly every Bitcoin ETF, stands to benefit dramatically.

Strong Balance Sheet

Seth Klarman is a legendary value investor, billionaire, and one of the highest-earning money managers in the world. In a recent interview, Klarman stated that he avoids crypto but sees value in Coinbase, saying, "Coinbase is sitting on $5 billion in cash, has less than that in debt, and is doing some smart things."

A Swing to Profitability + More Momentum Expected

2023 was Coinbase's best year as a public company. COIN swung to its first annual profit ever as a public company and grew earnings 142% on robust revenue growth of 52% year-over-year. Based on Zacks Consensus Estimates, the earnings momentum may be just beginning. In 2024, analysts expect COIN to grow EPS by a massive 172.97%!

Incredible EPS Surprise History

Expectations mean little to investors if a company has trouble reaching meeting or exceeding them. Fortunately for investors, COIN does not have that problem. COIN has delivered positive EPS surprises in four straight quarters and boasts an eye-popping 377.57% average surprise in that time frame.

Technical Breakout

Monday, COIN shares broke out of a picture-perfect cup-with-handle structure and simultaneously overcame more than one year old resistance.

Bottom Line

Crypto is one of the hottest industries on Wall Street. Coinbase, the crypto exchange leader, stands to benefit from the successful Bitcoin ETF launch, a massive cash hoard, and a swing to profitability. Expect shares to be much higher one year from today.

Bear of the Day:

Zacks Rank #5 (Strong Sell) stock Hertz Global Holdings is a multinational company primarily engaged in the car rental industry. As one of the world's largest car rental providers, Hertz operates in over 150 countries, offering rental services for a wide range of vehicles, including cars, trucks, and SUVs. The company caters to both leisure and business travelers, providing short-term and long-term rental solutions. In addition to car rentals, Hertz has expanded its services to include equipment rental and fleet management solutions. Hertz is known for its extensive fleet of vehicles and a global network of rental locations, making it a prominent player in the transportation sector.

Poor Fleet Allocation

Recently, Hertz announced it would cut its TeslaEV fleet by 20,000 vehicles, or roughly 33%. Surprisingly, Hertz could not turn a profit renting out the wildly popular TSLA EVs. The failed EV fleet acquisition underscores car rental industry issues, including, poor visibility, weak economics, and tight margins.

Earnings Growth is Moving in the Wrong Direction

In bull markets (and any market for that matter), investors gravitate towards companies with strong and positive earnings growth. Unfortunately for Hertz investors, HTZ EPS has been declining for several quarters.

ADVERTISEMENT

To make matters worse, Zacks Consensus Estimates suggest -184.62% earnings growth for the current quarter and -24% for full-year 2024.

Industry Disruption

Blockbuster Video's management team famously scoffed at the idea of sending DVDs in the mail (and later streaming) and refused to acquire Netflix. The rest is history – Blockbuster went bust, and NFLX went on to have a meteoric rise and become a Wall Street darling.

Unfortunately for Hertz, innovation is beginning to disrupt the industry. Turo is a peer-to-peer car-sharing platform that allows individuals to rent out their personal vehicles to others. The platform connects car owners with people in need of short-term rentals, providing a diverse selection of cars to choose from. Turo offers an alternative to traditional car rental services, allowing for a more varied and unique selection of vehicles. Both car owners and renters can benefit from the flexibility and convenience provided by Turo's platform, often offering users a more personalized and local experience. I like to think of it as Airbnb, but for cars. While Turo may not be in a position to put HTZ out of business, the platform is beginning to disrupt the industry and acts as a negative tailwind.

Relative Weakness

Hertz price action matches its sinking fundamental picture. While most stocks uptrend and soar to new heights, HTZ shares are stuck in the mud. Investors should avoid relatively weak stocks such as HTZ.

Bottom Line

Hertz is struggling from poor economics, industry disruption, and low visibility. Avoid laggards such as HTZ.

Additional content:

Nat Gas Market Suffers from Excess Supply, Weak Demand

The U.S. Energy Department's weekly inventory release showed a lower-than-expected decrease in natural gas supplies. The bearish inventory numbers, together with predictions of weaker weather-related demand in late February, weighed on natural gas futures, which settled with a slight loss week over week, despite a significant bump, following Chesapeake Energy's planned production cut for 2024.

In fact, the market hasn't been kind to natural gas, with the commodity recently hitting fresh three-and-a-half-year lows due to growing worries about record output and concerns about an ongoing supply glut. At this time, we advise investors to focus on stocks like Coterra Energy and Cheniere Energy.

EIA Reports a Withdrawal Smaller Than Market Expectations

Stockpiles held in underground storage in the lower 48 states fell 60 billion cubic feet (Bcf) for the week ended Feb 16, below the guidance of a 65 Bcf withdrawal, per a survey conducted by S&P Global Commodity Insights. The decrease compared with the five-year (2019-2023) average net shrinkage of 168 Bcf and last year's decline of 75 Bcf for the reported week.

The latest draw puts total natural gas stocks at 2,470 Bcf, which is 265 Bcf (12%) above the 2023 level and 451 Bcf (22.3%) higher than the five-year average.

The total supply of natural gas averaged 109.5 Bcf per day, down 0.4 Bcf per day on a weekly basis due to a slump in dry production, partly offset by higher shipments from Canada.

Meanwhile, daily consumption jumped to 124.5 Bcf from 116.4 Bcf in the previous week, mainly reflecting strength in residential/commercial usage and a higher power burn triggered by a widespread decline in temperatures.

Natural Gas Prices Finish Essentially Flat

Natural gas prices barely budged last week following the lower-than-expected inventory decrease. Futures for March delivery ended Friday at $1.609 on the New York Mercantile Exchange, edging down some 0.4% from the previous week's closing.

Investors should know that natural gas realization has been under pressure from strong production, an elevated level of stockpiles and tepid weather-related demand. The bearish sentiment surrounding the commodity even prompted shale producer Chesapeake Energy to announce a reduction in its drilling rigs so as to lower volume. The company decided to cut this year's gas production expectations by around 20%. CHK's plans rippled through the market, with natural gas surging 12.5% on Wednesday for its biggest one-day percentage gain since July 2022.

As is the norm with natural gas, changes in temperature and weather can lead to price swings. With a mil winter so far and forecasts turning warmer, usage of the commodity to generate electricity has taken a hit. It's worth mentioning that natural gas has been under pressure from record domestic output, with current inventory levels well above the year-ago figure and the five-year average.

Having said that, there are signs of curtailment in U.S. production. According to energy services provider Baker Hughes, the U.S. natural gas rig count — a pointer to where production is headed — is down more than 20% from last year. Industry observers believe this could set the stage for a pullback in near-term drilling and supplies.

Meanwhile, a stable demand catalyst in the form of continued strong LNG feedgas deliveries is supporting natural gas. As a matter of fact, LNG shipments for export from the United States have been elevated for months, reaching record levels due to environmental reasons and Europe's endeavor to move away from its dependence on Russian natural gas supplies due to the war in Ukraine.

Final Thoughts

The upshot of all of these factors — the natural gas market — remains an oversupplied one. As it is, it endured a torrid year in 2023, as prices tumbled more than 40%, briefly breaking below the $2 threshold for the first time since 2020.

Based on several factors, the space is currently quite unpredictable and spooked by sudden changes in weather and production patterns. As such, investors are clueless about what to do. As of now, the lingering uncertainty over the fuel means that they should preferably hold on to fundamentally strong stocks like Coterra Energy and Cheniere Energy.

Coterra Energy: It is an independent upstream operator primarily engaged in the exploration, development and production of natural gas. Headquartered in Houston, TX, the firm owns some 183,000 net acres in the gas-producing Marcellus Shale of the Appalachian Basin. The Zacks Rank #3 (Hold) company churned out an average of 2,262.7 million cubic feet on a daily basis from these assets in 2023.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Coterra beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed in the other, the average being 9.3%. Valued at around $19.5 billion, CTRA has risen 2.4% in a year.

Cheniere Energy: Being the first company to receive regulatory approval to export LNG from its 2.6 billion cubic feet per day Sabine Pass terminal, Cheniere Energy enjoys a distinct competitive advantage.

Cheniere Energy's expected EPS growth rate for three to five years is currently 25.8%, which compares favorably with the industry's growth rate of 21.2%. This #3 Ranked natural gas exporter has a trailing four-quarter earnings surprise of roughly 64.7%, on average. LNG shares have gone down 0.5% in a year.

Why Haven't You Looked at Zacks' Top Stocks?

Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.

Today you can access their live picks without cost or obligation.

See Stocks Free >>

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

https://www.zacks.com

Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.

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/performancefor information about the performance numbers displayed in this press release.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Chesapeake Energy Corporation (CHK) : Free Stock Analysis Report

Hertz Global Holdings, Inc. (HTZ) : Free Stock Analysis Report

Cheniere Energy, Inc. (LNG) : Free Stock Analysis Report

Coterra Energy Inc. (CTRA) : Free Stock Analysis Report

Coinbase Global, Inc. (COIN) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research