For Immediate Release

Chicago, IL – April 1, 2024 – Zacks Equity Research shares Ford Motor F as the Bull of the Day and J&J Snack Foods JJSF as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Exxon Mobil Corp. XOM, Chevron Corp. (CVX) and TotalEnergies SE TTE.

Here is a synopsis of all five stocks.

Bull of the Day:

Making its way onto the Zacks Rank #1 (Strong Buy) list last week, Ford Motor’s stock lands the Bull of the Day.

Setting up a bullish pattern after moving above its 200-day moving average, Ford’s stock has now spiked +9% year to date and more upside could be ahead considering the auto giant’s lucrative valuation.

Improved Probability & P/E Discount

Ford had worked diligently to improve its profitability prior to the pandemic and this came to fruition once supply chain disruptions subsided with the company seeing multi-year EPS peaks of $2.01 per share last year. While a modest slowdown in the resurgence of Ford’s bottom line is expected, over the last 60 days, earnings estimate revisions are nicely up for both FY24 and FY25.

Furthermore, higher EPS estimates support the notion that Ford’s stock is still cheap trading at $13 and just 6.9X forward earnings. This is 58% below Ford’s decade-long high of 16.5X forward earnings and a slight discount to the median of 7.3X. Even better, Ford’s stock trades at a glaring bargain to its Zacks Automotive-Domestic Industry average of 15.3X and closer to its main competitor General Motors 7.6X.

P/S Discount

In terms of price to sales, Ford’s stock checks the valuation box as well with a P/S ratio of 0.31X which is roughly on par with General Motors’ 0.29X and firmly beneath the optimum level of less than 2X. With the industry average at 1.5X sales its noteworthy that Ford’s top line is expected to slightly increase this year to $166.3 billion compared to $165.99 billion in 2023.

EV Surge

Making Ford’s perceived discounts more lucrative is that its EV sales surged 27% last quarter to record highs with a total of 25,927 all-electric vehicles delivered. Driven by increasing demand for its Mustang Mack-E, F-150 Lightening, and E-Transit, this impressively defied expectations. To that point, many analysts are expecting a significant slowdown in the broader EV market with Tesla’s slowing sales growth making headlines.

Notably, the EV boost pushed Ford’s Q4 sales to $43.3 billion which beat estimates by 14% in early February while earnings of $0.29 per share crushed the Zacks Consensus of $0.12 a share by 141%. More astonishing, Ford said its EV sales soared 81% last month after delivering 6,368 units and this could certainly propel its Q1 results in April.

Bottom line

The recent surge in Ford’s stock may just be getting started considering its very attractive valuation and compelling EV expansion. Certainly, now appears to be an ideal time to buy as keeping Ford’s stock in the portfolio may be very rewarding this year.

Bear of the Day:

Although the Zacks Food-Miscellaneous Industry is in the top 28% of over 250 Zacks industries, one noticeable laggard is J&J Snack Foods with its stock landing a Zacks Rank #5 (Strong Sell) and the Bear of the Day.

In what it has called a softer consumer environment, the snacks, pastries, and frozen beverage provider is also operating in a very competitive landscape that features competitors such as Mondelez International, Conagra Brands, Utz Brands and Kellogg among others.

Q1 Earnings Miss

Causing concern was J&J Snack Foods’ fiscal first quarter earnings of $0.52 a share in February, which widely missed the Zacks Consensus of $0.87 per share by -40%. Quarterly sales of $348.31 million missed estimates by -4% with the company citing declines in consumer traffic and consumption for its much weaker-than-expected results.

Transpiring from the earnings miss, EPS estimates for fiscal 2024 and FY25 have fallen -10% and -8% over the last 60 days respectively. This has started to dull the anticipation of J&J Snack Foods expansive bottom line with annual earnings still forecasted to rise 12% this year and projected to expand another 13% in FY25 to $5.72 per share.

Premium Fears & Recent Performance

While J&J Snack Foods’ EPS growth may still be enticing the downward earnings estimate revisions suggest more short-term volatility ahead. To that point, JJNF has now dropped -13% year to date to noticeably lag the S&P 500’s +10% and the Zacks Food-Miscellaneous Market’s +5%.

Furthermore, with J&J Snack Foods’ stock trailing the performances of many of its direct competitors it’s noteworthy that JJNF trades at a 28.3X forward earnings multiple which is considerably higher than the industry average of 17.6X and the S&P 500’s 22.1X.

Bottom Line

On the surface, J&J Snack Foods' bottom line expansion may be enticing but the trend of declining earnings estimates paints a cautionary tale. This is especially true considering its stock trades at a premium and has underperformed many of its industry peers.Additional content:

Upstream Expansion Fuels Optimism in the Oil & Gas Sector

The year 2024 comes as a period of strong growth and significant opportunities in the ever-changing landscape of the oil and gas industry. WTI crude prices have risen above the $80 mark owing to a combination of factors contributing to a tighter global supply.

Geopolitical tensions in the Middle East and an escalating conflict between Russia and Ukraine after the Crocus City Hall terrorist attack have had a significant impact on this upward trend. The reduction in the number of rigs in the United States adds to the pressure on oil prices, creating a favorable environment for investors looking for profitable lucrative in the sector.

Upstream Operations Poised for Expansion

With oil prices steadily rising, upstream operations stand to benefit greatly. Companies in this sector are preparing to capitalize on the current market conditions by increasing investments in exploration and production activities. The projected increase in upstream oil and gas spending in 2024 reflects the growing confidence about the industry's future trajectory. This increased confidence is not purely speculative but instead based on a practical assessment of the world's rising energy demand.

Cautious Optimism in Spending Trends

According to J.P. Morgan Commodity Research, global upstream oil and gas project spending will increase gradually but significantly in 2024. This anticipated increase of $555 billion in 2024, up from $550 billion in 2023, reflects the industry's strategic shift toward improved operational efficiency. While this figure represents a modest increase over the previous year's spending, it indicates a significant recovery from the lows experienced in 2020.

Efficiency Dividend and Production Growth

One of the remarkable narratives that characterizes the current oil and gas landscape is the pursuit of efficiency amid economic fluctuations. Despite a 20% reduction in annual capital expenditures over the last decade, upstream companies have maintained impressive production growth rates. According to the U.S. Energy Information Administration (EIA), U.S. crude oil production maintained its lead in global oil production for the sixth consecutive year, reaching a record-breaking average of 12.9 million barrels per day.

This efficiency dividend not only strengthens their resilience but also bodes well for the future, with analysts forecasting record-breaking oil production in 2024. The upside in deepwater exploration activity strengthens this optimistic outlook.

Investor Confidence Fuels Promising Opportunities

The tangible optimism in the oil and gas industry is reflected in the surge in investor confidence. Several key players within the industry are gathering attention as promising candidates for investment portfolios.

Exxon Mobil Corp.: ExxonMobil boasts a proven track record of profitability and a strong balance sheet. The company is also investing heavily in new exploration and production opportunities, ensuring a steady stream of future revenues. The Zacks Rank #3 (Hold) expects its total annual capital expenditure and exploration costs to range between $23 billion and $25 billion in 2024, with consistent projections of $22-$27 billion annually from 2025 to 2027.

This commitment toward steady investment indicates a long-term bullish outlook from Exxon Mobil's leadership. XOM's shares have increased 12.7% in the past three months compared with the Zacks Oil-Energy sector's 5.8% rise.

Chevron Corp.: Similar to XOM, Chevron is a financially-sound company with a global footprint. Chevron is positioned for significant production growth in 2024. The company's acquisition of PDC Energy and its continued strength in the Permian Basin are expected to boost output by 4-7% year over year.

This translates to even more oil flowing into Chevron's reserves. CVX Plans a strategic 14% increase in capital expenditures for 2024, reaching $16 billion. The company is also committed to boosting shareholders’ value. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

TotalEnergies SE: TTE stands out with impressive production growth fueled by its focus on fast-growing hydrocarbon regions like South America and Africa and its use of modern drilling technology. TTE benefits from solid production from new startups like the Mero field in Brazil. The company's commitment to innovation and lowering breakeven costs is also aiding profitability.

In 2024, TTE plans to increase its capital expenditure to $5 billion compared with the previously-reserved $4 billion. This investment is part of the total capex range of $16-$18 billion for the year. With global oil and gas spending expected to rise in 2024, TTE is capitalizing on the opportunity by increasing capital expenditure, demonstrating its confidence in future growth and profitability.

The Long-Term Outlook: Navigating Industry Evolution

The oil and gas sector is constantly growing, and the long-term outlook remains a subject of debate. The rise of renewable energy sources and growing environmental concerns will undoubtedly play a role in shaping the future of the industry. However, oil and gas are expected to remain a critical part of the global energy mix for the foreseeable future, particularly in developing economies.

In conclusion, the oil and gas sector presents a positive outlook for 2024. Continued investment in production growth, coupled with industry efficiency improvements, suggests the potential for strong returns.

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