The U.S. stock markets have been surging lately due to an accelerated macroeconomic recovery and bullish investor sentiment. Substantial monetary and fiscal policy support have caused analysts to adopt a bullish outlook regarding the markets; they are especially influenced by record low borrowing costs and federal investments that are positively impacting most companies’ financials.
Analysts believe that these stocks can outperform the market in the near-term. So, we think it could be wise to bet on these stocks now.
Textron Inc. (TXT)
TXT is a multi-industry company engaged in aircraft, defense, industrial and finance businesses. It provides customers with innovative products, solutions and services worldwide. The company operates through five segments—Textron Aviation, Bell, Textron Systems, Industrial, and Finance. In addition, it provides parts, repair, and other aftermarket services. The company also makes specialty vehicles, fuel systems, land and marine systems, unmanned aerial vehicles, and simulation and training products. Analysts at Baird have upgraded TXT’s rating from ‘Neutral’ to ‘Outperform.’
On May 4, TXT’s Bell Textron announced that its Bell 505 cargo hook won approval from the European Union Aviation Safety Agency (EASA) to carry up to 2,000 pounds (907 kg), thus giving the aircraft an external gross weight capability of 4,475 pounds. This certification will add capability and utility to the cargo hook.
Also on May 4, TXT’s Textron Systems unveiled Cottonmouth, a vehicle purpose-built for the U.S. Marine Corps’ Advanced Reconnaissance Vehicle (ARV) program. This vehicle offers cutting-edge sensor technology and delivers advanced maneuverability and a synergized sensor system to enhance reconnaissance operations. With the introduction of these updates in this vehicle, TXT hopes to provide the next-generation experience. TXT paid a $0.02 quarterly dividend per share on the company’s common stock on April 1.
The company’s total revenue has increased 3.7% year-over-year to $2.88 billion for its fiscal year 2021 first quarter, ended April 3. TXT’s gross profit came in at $256 million, which represented a 64.1% gain from the prior-year period. Also, its adjusted net income was $160 million for the quarter, up 100% year-over-year. TXT’s EPS also increased 100% year-over-year to $0.70.
A $0.65 consensus EPS estimate for the current quarter, ending June 30, represents a 400% improvement year-over-year. TXT surpassed the consensus EPS estimates in each of the trailing four quarters. The $2.92 consensus revenue estimate for the current quarter represents a 18.2% gain from the prior-year period. Analysts expect the stock’s EPS to grow at a 25.5% rate per annum over the next five years.
The stock has gained 155.5% over the past year and 82.4% over the past nine months. TXT closed yesterday’s trading session at $65.50.
It’s no surprise that TXT has an overall A rating, which equates to Strong Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has a B grade for Value, Growth and Sentiment. Click here to see the additional ratings for TXT (Momentum, Stability and Quality).
TXT is ranked #3 of 67 stocks in the Air/Defense Services industry.
1-800 FLOWERS.COM, Inc. (FLWS)
FLWS provides gifts for various occasions. The company operates through three segments: Consumer Floral, Gourmet Foods & Gift Baskets, and BloomNet. It offers a range of products, including fresh-cut flowers, floral and fruit arrangements and plants, gourmet foods and gift baskets, chocolates, wine, and gift-quality fruits, as well as balloons, candles, keepsake gifts, jewelry, and plush stuffed animals. Analysts at DA Davidson upgraded FLWS’ rating from ‘Neutral’ to ‘Buy.’
On April 29, FLWS announced the increase of funds available for stock repurchases to $40 million. The new authorization replaces a previous $30 million authorization that had approximately $4 million remaining after the company returned approximately $26 million to shareholders with share repurchases over the past two years.
Also in April, Wolferman’s Bakery, a FLWS brand specializing in exceptional baked goods and specialty foods, had teamed with Michelin-star Chef Curtis Stone to release new and exclusive recipes in celebration of National English Muffin Day. The brand also engages consumers through a new virtual morning show series that demonstrates the versatility of English muffins in recipe creation.
For its fiscal year 2021 third quarter, ended March 28, FLWS total net revenues increased 70.1% year-over-year to $474.23 million. The company’s gross profit was $184.70 million, which represented a 71.9% gain from the prior-year period. Its non-GAAP net income came in at $1.51 million for the quarter, compared to a $8.96 million net loss in the third quarter of 2020. FLWS’ non-GAAP EPS was $0.02, compared to loss per share of $0.14 in the year-ago period.
Analysts expect FLWS’ EPS to be $1.80 for the current year, which represents an 89.5% rise from the prior-year period. It surpassed the Street’s EPS estimates in each of the trailing four quarters. Also, the consensus revenue is estimated to be $2.11 billion for its fiscal year 2021, representing a 41.5% rise year-over-year. FLWS’ EPS is expected to grow at a 20% rate per annum over the next five years.
The stock has gained 70% over the past year and 61.2% over the past six months. It closed yesterday’s trading session at $33.42.
FLWS’ POWR Ratings reflect this promising outlook. The stock has an A grade for Quality, and a B grade for Value. Click here to see the additional ratings for FLWS (Growth, Stability, Value and Momentum).
FLWS is ranked #13 of 71 stocks in the Internet industry.
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TXT shares were unchanged in after-hours trading Wednesday. Year-to-date, TXT has gained 35.99%, versus a 11.56% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market. More...
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