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MoneyLion and Charter Communications have been highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – May 28, 2024 – Zacks Equity Research shares MoneyLion ML as the Bull of the Day and Charter Communications CHTR asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Halliburton HAL, Valero Energy VLO and Targa Resources TRGP.

Here is a synopsis of all five stocks:

Bull of the Day:

MoneyLion, a Zacks Rank #1 (Strong Buy), provides personalized products and financial content for American consumers. The company's platform offers access to banking, borrowing, and investing solutions, enabling customers to take control of their finances.

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The company is benefitting from underlying momentum in both the technology and financial sectors. The stock hit a 52-week high ahead of the Memorial Day weekend, breaking out on above-average volume. Shares are displaying relative strength as buying pressure accumulates in this market leader.

MoneyLion is part of the Zacks Financial Transaction Services industry group, which currently ranks in the top 23% out of more than 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months.

Historical research studies suggest that approximately half of a stock's price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.

It's no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.

Company Description

New York-based MoneyLion is a data-driven, digital financial platform. Its principal products include RoarMoney, an insured digital demand deposit account; Instacash, a cash advance product that gives customers early access to their recurring income deposits; MoneyLion Investing, an online investment account that offers access to separately managed accounts; and Roundups, which provides features designed to encourage good saving and investing habits.

In addition, the company offers MoneyLion Crypto, an online cryptocurrency account that allows customers to buy, sell, and hold cryptocurrency through the MoneyLion application. The fintech giant also provides marketplace solutions including distribution, acquisition, and monetization channels, as well as creative media and brand content services.

Earnings Trends and Future Estimates

MoneyLion has established an impressive earnings history since its IPO in 2020. The company has exceeded earnings estimates in each of the last four quarters, delivering a trailing four-quarter average earnings surprise of 116.4%. Consistently beating earnings estimates is a recipe for success.

Analysts covering ML are in agreement and have been raising their earnings estimates lately. For the current fiscal year, analysts have increased earnings estimates by an astounding 2,516.67% in the past 60 days. The Zacks Consensus Estimate now stands at $1.45/share, reflecting potential growth of 131.3% relative to the prior year. Revenues are projected to rise 24% to $524.8 million.

Let's Get Technical

ML shares have surged nearly 50% already this year. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.

Notice how both the 50-day (blue line) and 200-day (red line) moving averages are sloping up. The stock has been making a series of 52-week highs. With both strong fundamental and technical indicators, MoneyLion is poised to continue its outperformance.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, MoneyLion has recently witnessed positive revisions. As long as this trend remains intact (and ML continues to deliver earnings beats), the stock will likely continue its bullish run this year.

Bottom Line

MoneyLion is ranked favorably by our Zacks Style Scores, with a best-in-class 'A' rating in our Growth category and a 'B' rating in our Value category. This indicates that ML stock is likely to continue to move higher based on a favorable combination of earnings and sales growth.

Backed by a leading industry group and an impressive history of earnings beats, it's not difficult to see why MoneyLion stock is a compelling investment. An appealing technical trend along with robust fundamentals paint a bullish picture moving forward.

Bear of the Day:

Charter Communications, a Zacks Rank #5 (Strong Sell), operates as a broadband connectivity and cable operator serving residential and commercial customers in the United States. The parent company of cable provider Spectrum, Charter offers subscription-based internet, video, and mobile and voice services.

Charter also sells video and online advertising to local, regional, and national customers, as well as fiber-delivered communications and managed information technology solutions to large enterprise customers.

The company's two-way telecommunications network passes through roughly 55 million households and businesses across the country. Charter estimates that about 500 million devices are connected wirelessly to its network.

Despite the seemingly strong credentials, Charter operates in an extremely crowded market. As we'll see, future earnings estimates have been plunging lately, providing a grim backdrop for the company.

The Zacks Rundown

Charter Communications has been severely underperforming the market over the past year. The downtrend has continued in 2024 as CHTR stock hits a series of 52-week lows. Shares represent a compelling short or hedge opportunity, even as the major indices eclipse former all-time highs.

CHTR is part of the Zacks Cable Television industry group, which currently ranks in the bottom 9% out of approximately 250 industries. Because this industry is ranked in the bottom half of all Zacks Ranked Industries, we expect it to underperform the market over the next 3 to 6 months. This industry has widely underperformed the market so far in 2024.

While individual stocks have the ability to outperform even when included in weak industry groups, their industry association serves as a headwind for any potential rallies. Charter Communications continues to fight an uphill battle and the stock is confirming this notion, lagging the general market by a wide margin.

Recent Earnings and Deteriorating Forecasts

The media company has missed the earnings mark in five of the past seven quarters. Charter has delivered a trailing four-quarter average earnings miss of 2.39%. Consistently falling short of earnings estimates is a recipe for underperformance.

Analysts covering CHTR decreased their earnings estimates recently. Looking at the current quarter, Q2 estimates have been slashed by 9.42% in the past 60 days. The Zacks Consensus Estimate sits at $7.98/share, reflecting a 0.87% drop from the year-ago period. Revenues are also projected to slightly decline during the quarter to $13.66 billion.

The multi-channel video market is a saturated one, which significantly lowers growth potential for cable TV operators like Charter. Its three primary competitors include AT&T, Frontier, and Verizon, which offer triple-play packages consisting of multi-channel video, internet, and voice services.

Charter Communications consistently suffers video-subscriber attrition, primarily due to cord-cutting and stiff competition from streamers like Netflix, HBO, Amazon Prime, and YouTube. Despite recent news of a distribution agreement with Paramount Global, Charter will likely remain at a key disadvantage. The company's leveraged balance sheet is also a concern.

Technical Outlook

Charter's stock has been steadily falling since late last year and has now established a well-defined downtrend. Shares have declined about 30% this year alone.

CHTR stock has also experienced the dreaded death cross, whereby its 50-day moving average crosses below its 200-day moving average. Charter Communications would have to make a serious move to the upside and show increasing earnings estimate revisions to warrant taking any long positions in the stock. Shares remain in negative territory this year while the general market has eclipsed its former highs.

Final Thoughts

A deteriorating fundamental and technical backdrop show that we're not likely to watch this stock hit new highs anytime soon. The fact that CHTR is included in one of the worst-performing industry groups provides yet another headwind to a long list of concerns.

A history of earnings misses and falling future earnings estimates will likely serve as a ceiling to any potential rallies, nurturing the stock's downtrend. Potential investors may want to give this stock the cold shoulder, or perhaps include it as part of a short or hedge strategy. Bulls will want to steer clear of CHTR until the situation shows major signs of improvement.

Additional content:

Brokers Love These Energy Stocks: Time to Take a Look

The Oil/Energy sector is well-known for its inherent unpredictability, with frequent spikes and falls. While significant price fluctuations have always been a hallmark of investments in oil and natural gas, the level of uncertainty has significantly increased in recent years, particularly following the COVID-19 pandemic.

This volatility is a reflection of substantial uncertainty in demand/supply fundamentals, with the companies' profits often depending on commodity prices. Headwinds across the political spectrum and certain news headlines or events can always threaten supply or change anticipated demand. All these call for an increased focus on stock selection.

For novice investors, the volatility of the energy market can make investing seem risky and anxiety-inducing. However, stocks like Halliburton, Valero Energy and Targa Resources are worth considering due to brokers' confidence in them. Although these companies currently carry a Zacks Rank #3 (Hold), brokers' optimism suggests underlying positive trends.

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

Why is it Desirable to Follow Expert Opinion?

The volatility and uncertainty of oil prices make investment decisions difficult for individuals. With the future direction of the commodity's movement being anybody's guess, it might be wise to go ahead with stocks preferred by analysts who have deep fundamental knowledge and understanding of the industry and its companies.

Stocks with brokerage upgrades are often in for a good day and probably more. Consequently, a downgrade may indicate rough days ahead. Whatever the movement, the market tends to react to it. Also, research shows that stocks with broker rating upgrades outperform those that aren't upgraded, and they almost certainly record better results than stocks that get downgraded.

3 Broker-Favored Stocks Worth Keeping on One's Radar

With the help of the Zacks Stock Screener, we have selected three stocks that have been given a Strong Buy or Buy rating by 75% or more brokers.

Halliburton: Houston, TX-based Halliburton is one of the largest oilfield service providers in the world, offering a variety of equipment, maintenance, and engineering and construction services to the energy, industrial and government sectors.

Investors should know that 18 of the 20 brokers providing data to Zacks on Halliburton's stock have Strong Buy recommendations. The other three ratings are a Buy and a Hold, giving the company an attractive average brokerage recommendation ("ABR") of 1.15 on a scale of 1 to 5 (Strong Buy to Strong Sell).

Annual earnings are forecast to go up 8.3% this year and rise another 17.9% in 2025 to $4 per share. Moreover, sales are projected to climb 5.6% in 2024 and rise another 8.3% in 2025 to $26.3 billion. Finally, the average price target of Zacks is pegged at $48.40 a share, which suggests a 34.5% upside for the HAL stock from the current levels. So far this year, the Halliburton stock has edged down 0.4%, but an upside looks more likely.

Valero Energy: San Antonio, TX-based Valero Energy is the largest independent refiner and marketer of petroleum products in the United States. The company has a refining capacity of 3.1 million barrels per day across 15 refineries located throughout the United States, Canada and the United Kingdom.

Valero's stock has catapulted more than 25% this year. The company's performance continues to impress, coming within 7% less than the Zacks average price target of $174.88 at the moment, despite decreasing 2.7% over the past month.

Even after an extensive year-to-date rally, VLO's stock has only one Strong Sell broker rating, with 12 of them still strongly recommending the company's shares. Even after including four hold ratings, Valero's 1.71 ABR is intriguing. As far as earnings are concerned, VLO's first-quarter earnings of $3.82 per share beat the consensus estimate of $3.18 a share by 20.1%.

Targa Resources: Targa Resources is a premier energy infrastructure company. A leading provider of integrated midstream services in North America, this Houston, TX-based operator primarily derives its revenues from gathering, compressing, treating, processing and selling natural gas.

An under-the-radar energy stock, TRGP has a very favorable ABR of 1.11. Currently, 16 brokers have a Strong Buy rating on Targa Resources' stock with two Buy ratings. The company has lost 2.6% year to date.

Total sales are projected to jump 9.7% in 2024 and another 7.3% in 2025 to $18.9 billion. Earnings are anticipated to rise 53.6% this year and jump 23.9% in 2025 to $6.97 a share.

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

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Halliburton Company (HAL) : Free Stock Analysis Report

Valero Energy Corporation (VLO) : Free Stock Analysis Report

Charter Communications, Inc. (CHTR) : Free Stock Analysis Report

Targa Resources, Inc. (TRGP) : Free Stock Analysis Report

MoneyLion Inc. (ML) : Free Stock Analysis Report

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