Roku and Constellation Brands have been highlighted as Zacks Bull and Bear of the Day

For Immediate ReleaseChicago, IL – February 19, 2025 – Zacks Equity Research shares Roku ROKU as the Bull of the Day and Constellation Brands STZ as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Berkshire Hathaway (BRK.B), The Progressive Corp. PGR and The Allstate Corp. ALL.Here is a synopsis of all five stocks.Bull of the Day:I could get used to a market like this. All-time highs nearly every day? Yes, please! But, we can’t rest on our laurels around here. The market has a funny way of surprising us the most when everyone is starting to get a little too greedy and a little too complacent.That doesn’t mean that we can’t celebrate the big winners we see them. There are a ton of stocks out there that are rallying for good reasons, and are seeing their earnings move instep with those stock prices. The Zacks Rank helps us uncover those stocks with the strongest earnings trends. Trends like we see in today’s Bull of the Day.Today’s Bull of the Day is Zacks Rank #1(Strong Buy) Roku. Roku is a leading company in the streaming media industry, primarily known for its digital media players and smart TV operating system. The company’s business is centered around three key areas, Streaming devices and Smart TVs, advertising and content distribution, as well as platform services and subscriptions.The reason for the favorable Zacks Rank is that Roku’s last earnings report prompted several analysts around Wall Street to increase their earnings estimates for the current year and next year. On February 13th, the company reported a beat on both top and bottom lines, while guiding initial FY25 revenues of $4.61 billion.As a result, analysts bumped up their expectations for both the current year and next year. Our current year Zacks Consensus Estimate calls for a loss of 80 cents, up from a loss of 93 cents sixty days ago. Next year’s number has pushed up to a profit of a dime versus expectations for a nickel loss.A quick look at the Price, Consensus and EPS Surprise Chart shows the consistency recently in Roku’s earnings. Five consecutive quarterly earnings beats for the company now. Estimates continue to start lower and spend the year ticking higher. That’s exactly what you want to see from a long-term winner. Roku is still well off its all-time highs which sit over $450. The stock is currently trading below $100.Bear of the Day:Markets are rocking and rolling, up at all-time highs with no signs of stopping. Of course, we all know that it can’t last forever. And when it comes time to pay the piper, the brutality will be swift. During that time, it’s best to find stocks with strong earnings trends which have retreated in price. You won’t want to be left holding the bag in a stock that’s down in price, and has seen its earnings move in the wrong direction.Today’s Bear of the Day is a stock that has seen its earnings estimates move in the wrong direction. I’m talking about Zacks Rank #5 (Strong Sell) Constellation Brands. Constellation Brands is a leading producer and marketer of alcoholic beverages, specializing in beer, wine, and spirits. The company owns popular beer brands like Corona, Modelo, and Pacifico in the U.S., along with a premium wine and spirits portfolio that includes Robert Mondavi, Kim Crawford, and Svedka Vodka. Constellation focuses on brand innovation, strategic acquisitions, and premiumization to drive growth in the beverage alcohol industry.Constellation Brands is not in the good graces of our Zacks Rank. The reason is that nine analysts have cut their earnings expectations for the current year over the last sixty days, while eight have done so for next year. The bearish moves have dropped our Zacks Consensus Estimates for the current year from $13.72 to $13.50 while next year’s number is off from $15.02 to $14.44.From a valuation perspective, the good news for investors is that Constellation is trading at 12x earnings. That’s cheaper than the industry average of 12.8x. If the company can right the ship and hold earnings steady, there’s a real chance at recovery.Constellation is in the Beverages – Alcohol industry which ranks in the Bottom 10% of our Zacks Industry Rank.Additional content:Berkshire Hathaway Pre-Q4 Earnings Analysis: Time to Sell the Stock?Berkshire Hathaway is expected to witness a decline in its top line when it reports fourth-quarter 2024 results. However, the bottom line is expected to improve.See the Zacks Earnings Calendar to stay ahead of market-making news.The Zacks Consensus Estimate for BRK.B’s fourth-quarter revenues is pegged at $88.3 billion, indicating 5.4% decline from the year-ago reported figure.The consensus estimate for earnings is pegged at $4.43 per share. The Zacks Consensus Estimate for BRK.B’s fourth-quarter earnings witnessed no movement in the past 30 days. The estimate suggests a year-over-year increase of 13%.BRK.B’s Decent Earnings Surprise HistoryBerkshire Hathway’s earnings beat the Zacks Consensus Estimates in three of the trailing four quarters and missed in one, the average surprise being 45.28%.What the Zacks Model Unveils for Berkshire Hathaway Our proven model does not conclusively predict an earnings beat for Berkshire this time around. This is because a stock needs to have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), which increases the chances of an earnings beat. This is not the case, as you can see below.You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.Earnings ESP: BRK.B has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $4.43.Berkshire Hathaway Inc. price-eps-surprise | Berkshire Hathaway Inc. QuoteZacks Rank: BRK.B currently has a Zacks Rank #4 (Sell).You can see the complete list of today’s Zacks #1 Rank stocks here.Factors Likely to Shape BRK.B’s Q4 ResultsBetter pricing, solid retention, higher average premiums per auto policy, increased exposure and favorable reserve development are likely to have benefited its insurance business. Continued insurance business growth is expected to have increased float.However, high catastrophe losses are likely to have been a drag on underwriting profitability. The fourth quarter faced the wrath of Hurricane Milton. CoreLogic estimated losses from Hurricane Milton to be about $34 billion, with insured losses between $17 billion to $28 billion. Thus, the combined ratio is likely to have deteriorated.GEICO, its private passenger automobile insurance business, is expected to have delivered an improved performance, banking on higher average premiums per auto policy as well as lower claims frequencies, coupled with improved operating efficiencies.Investment results are likely to benefit from higher yields and a larger investment asset base.Unfavorable changes in business mix and lower fuel surcharge revenues are likely to have weighed on the railroad business. However, car/unit volumes are likely to have increased.Earnings of BNSF are likely to reflect higher unit volume, improvements in employee productivity and lower other operating costs. However, higher litigation charges are likely to have been a partial offset.Improved earnings from the U.S. regulated utilities, natural gas pipeline and other energy businesses are likely to have benefited the utilities and energy business. However, lower earnings from the real estate brokerage business are expected to have dampened the upside.Manufacturing, service and retailing businesses are likely to have benefited from higher customer demand for products and services in many businesses.Share buybacks are likely to have provided an additional boost to the bottom line.BRK.B’s Price Performance & ValuationThe stock outperformed the industry, sector and S&P 500 in 2024.The stock is trading at a price-to-book value of 1.64X, slightly higher than the industry’s 1.63X. It is attractively valued compared with other insurers like The Progressive Corp. and The Allstate Corp.Investment ThesisAmong its diverse business activities, the most important is its insurance operations. The insurance business is exposed to the vagaries of nature, which induces volatility in the company’s underwriting profitability and weighs on its combined ratio. An extremely active 2024 hurricane season with 25 named storms, including 12 hurricanes and six major hurricanes as predicted by the Colorado State University, are likely to have diluted the bottom line of this insurer.However, this company creates tremendous value for shareholders, given its dominant market presence, diverse business activities and, above all, the name Warren Buffett.What Should Investors Do Now With BRK.B Stock?A better-than-expected private passenger automobile insurance business will limit the downside arising from catastrophe losses. Also, better performance from other businesses should offer respite.However, an unfavorable return on capital, a likely decline in the fourth-quarter top line, lowered times interest earned, and contracting margins make the stock vulnerable. The company’s exposure to catastrophes tends to make its underwriting results volatile. Notably, insurance operations contribute around one-fourth of Berkshire’s top line. Also, given its premium valuation, investors should stay away from the stock for now.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339https://www.zacks.comZacks.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/performance for information about the performance numbers displayed in this press release.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant 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 Berkshire Hathaway Inc. (BRK.B): Free Stock Analysis Report The Allstate Corporation (ALL): Free Stock Analysis Report The Progressive Corporation (PGR): Free Stock Analysis Report Constellation Brands Inc (STZ): Free Stock Analysis Report Roku, Inc. (ROKU): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks