Tesla and Nike have been highlighted as Zacks Bull and Bear of the Day

For Immediate ReleaseChicago, IL – November 7, 2024 – Zacks Equity Research shares Tesla TSLA as the Bull of the Day and Nike Inc NKE as the Bear of the Day. In addition, Zacks Equity Research provides analysis Medical Properties Trust, Inc. MPW, Ventas VTR and Healthpeak Properties DOC.Here is a synopsis of all five stocks:Bull of the Day:Zacks Rank #1 (Strong Buy) stock Tesla is the world's leading electric vehicle (EV) and has evolved into a dynamic technology innovator (full disclosure: we are long the stock in the Technology Innovators portfolio since April). Though Tesla is much younger than its automakingthe company has managed to capture roughly half of the U.S. EV market.Unlike legacy automakers, Tesla is laser-focused on its EV segment and relies on little-to-no marketing to sell its vehicles. Tesla's automotive business remains its most extensive, though it has steadily expanded its high margin energy generation/storage business.Tesla's Intermediate Growth is Back on TrackAlthough Tesla's earnings growth has stagnated recently, Zacks Consensus Estimates suggest that Tesla's annual earnings will jump by a healthy 29.65% in 2025.Below are three bullish fundamental catalysts that will drive earnings growth in the short term:1. Cybertruck Sales: Tesla CEO Elon Musk revealed that the Cybertruck became the third best-selling EV in the United States in the third quarter (only behind the Tesla Model Y & Model 3). As Tesla becomes more efficient at producing Cybertrucks, deliveries should soar.2. Lower Interest Rates: A more "Dovish" Federal Reserve benefits Tesla because it allows consumers to more affordably finance cars.3. China Stimulus: China's floundering economy has adversely impacted Tesla's Chinese sales. However, Chinese officials recently announced a sweeping economic stimulus package that should indirectly benefit Tesla in the region.Long-Term TSLA Catalysts: Energy Storage & RobotaxiEnergy Generation & Storage BusinessTesla's revenue from this business has exploded, growing at a triple-digit compound annual growth rate (CAGR) over the past three years. Though it remains a small segment of Tesla's business, its robust growth and juicy margins should be a significant catalyst in the long term.RobotaxiMany investors falsely believe thatWaymo cyber taxi service has a leg up on Tesla's because it has been greenlighted in some major U.S. cities like San Fransisco and is in service, while Tesla still hasn't gone live. Nonetheless, being the first to market is not enough to win the battle.Tesla has a massive edge when it comes to training their Full Self Driving model. As a result, Tesla expects that FSD will be safer than a human driver (< 1 accident reported every 550k miles traveled). Furthermore, Tesla is far more scalable than Waymo because it doesn't rely on super expensive lidar sensors like Waymo. Though I see both companies ultimately succeeding, skeptics are very wrong to assume that Waymo will run away with cybertaxi supremacy just because they launched first.Is Tesla a "GARP" Play?Beyond its attractive growth prospects, Tesla boasts a very inexpensive valuation, historically speaking, making it an attractive "growth at a reasonable price" or GARP play. TSLA's price-to-sales ratio is at its lowest level since 2020, right before TSLA shares vaulted more than 20x.Long Term BreakoutEarlier this year, TSLA shares signaled a trend shift when they cleared a long-term downtrend line on the quarterly chart.Bottom LineSeveral bullish catalysts suggest the worst is over for the leading EV maker. Tesla is expected to resume its hyper-growth phase while its valuation remains historically cheap.Bear of the Day:Zacks Rank #5 (Strong Sell) stock Nike Inc, incorporated in 1967, is the world's largest athletic footwear, apparel, and equipment company. The $116 billion company has a robust brand portfolio that includes Nike Pro, Nike Golf, Nike+, and Air Jordan. Nike is well known for its unique and creative marketing campaigns and its iconic "swoosh" logo.Though Nike is the best-known brand in its industry, its fundamental and technical performance has been lackluster over the past two years. While the stock market is forward-looking and discounts the future, Nike faces a slew of challenges, and the company's ability to dominate the future the way it has in the past, looks unlikely (at least for now).Nike Faces New Competition from Hoka and On CloudNike faces formidable competition for the first time in years from relative newcomers.In 2019, Nike had 23.4% market share in the athletic footwear industry, while On Running had a measly 0.3%. However, by 2022, On Running enjoyed a 1.2% market share, while Nike dropped to a 22.1% share. Similar, albeit smaller, trends have emerged with Hoka as well.Though Nike's dominance in the athletic footwear market is not in jeopardy, Wall Street is a game of "What have you done for me lately?" While Nike may dominate from a market share perspective, new and innovative competition is slowly eating away at the company's growth.Growth Is Slowing at NikeZacks Consensus Estimates suggest that Nike's earnings growth will slide by ~30% in 2025.Relative WeaknessThough Nike has delivered positive earnings surprises in four straight quarters, the stock has continued to lag, signaling that investors are jumping ship. Over the past year, NKE shares have been down 26%, while the S&P 500 Index has been up 33%.Nike: The Future Is UncertainNike raised eyebrows when the company withdrew guidance for 2025 (never a positive sign). Meanwhile, NKE has a negative Zacks Earnings Surprise Prediction (ESP) score, which suggests it is likely to miss Wall Street estimates when it reports earnings in December.Bottom LineNike is the dominant player in the athletic footwear industry. However, new competition, slowing growth, and relative weakness threaten the company's dominance.Additional content:Buy, Sell or Hold Medical Properties? Key Tips Ahead of Q3 EarningsMedical Properties Trust, Inc.— also known as MPT — is slated to report third-quarter 2024 earnings results on Nov. 7, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter's normalized funds from operations (FFO) per share and revenues is pegged at 20 cents and $241.2 million, respectively.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.The Zacks Consensus Estimate for third-quarter normalized FFO per share has declined two cents to 20 cents over the past two months. The figure implies a year-over-year fall of 47.4%. The Zacks Consensus Estimate for quarterly revenues implies a year-over-year decrease of 21.3%.For the current year, the Zacks Consensus Estimate for Medical Properties' normalized FFO per share is pegged at 85 cents, indicating a decline of 46.5% on a year-over-year basis. The consensus mark for 2024 revenues is pegged at $1.01 billion, implying a rise of 15.8% year over year.Over the trailing four quarters, this Birmingham, AL-based healthcare REIT beat the Zacks Consensus Estimate on three occasions and missed once, with the average surprise being 13.2%.What Our Quantitative Model Predicts for MPWOur proven model does not conclusively predict a surprise in terms of FFO per share for Medical Properties this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.Medical Properties has an Earnings ESP of 0.00% and currently carries a Zacks Rank of 5 (Strong Sell). You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.You can see the complete list of today's Zacks #1 Rank stocks here.Factors to Consider for Medical Properties' Upcoming Q3 ResultsA drop in rent billed is likely to have affected the company's quarterly revenues. The Zacks Consensus Estimate for third-quarter rent billed is pegged at $167.1 million, suggesting a decline from $183.8 million reported in the prior quarter and $229.3 million in the year-ago period. The consensus estimate for income from financing leases stands at $18.4 million, suggesting a fall from $27.6 million reported in the prior quarter and $26.1 million reported in the year-ago quarter.Also, high interest expenses in an elevated interest rate environment and exposure to certain troubled operators are anticipated to have cast a pall on the company's quarterly performance.However, MPT follows a disciplined capital-recycling strategy, through which it disposes of non-core assets and redeploys the proceeds in premium asset acquisitions and accretive development projects. In July 2024, the company sold the 50-bed Arizona General Hospital in Mesa, AZ and seven freestanding emergency departments to Dignity Health for $160 million. This sale resulted in a gain on real estate of approximately $85 million and an approximately $20 million write-off of straight-line rent receivables.The consensus estimate for straight-line rent is estimated at $40.5 million, implying a rise from $38.4 million reported in the prior quarter and $21.5 million in the year-ago period.Medical Properties opted for more than $2.5 billion in liquidity transactions from the beginning of the year through Aug. 6, 2024. The move was aimed at strengthening its balance sheet position.MPW's Price Performance & ValuationShares of Medical Properties have gained 0.6% over the past three months. This compared with the Zacks REIT and Equity Trust - Other industry's growth of 4.9% and the S&P 500 composite's rise of 11.2% over the same time frame.Its industry peers like Ventas and Healthpeak Properties has also left Medical Properties in the dust, with these stocks having gained 10% and 5.7%, respectively, in the same period.The stock is trading at a forward 12-month price-to-FFO of 5.77X, significantly below the industry average of 16.40X. Its forward 12-month price-to-FFO is ahead of its median of 4.27X and close to its one-year high of 7.46X.How to Play MPW Stock?Medical Properties has recently been the subject of allegations made by short-sellers. However, in October 2024, the company's board released the findings of an independent investigation that revealed no improper practices or management misconduct. Earlier, the company terminated its relationship with the Steward Health Care System, thereby enabling the immediate transition of operations at 15 hospitals in the country.Moreover, exposure to certain troubled operators and high interest expenses remain concerns. Analysts' southward revision of FFO estimates echoes similar sentiments.Although Medical Properties' stock is currently trading at a discount compared to its industry peers, this valuation disparity might not be as favorable as it seems. The lower price could be indicative of underlying issues rather than representing a clear investment opportunity.Hence, new investors may want to steer clear of this stock for the time being. Those eyeing the stock may wait for a better entry point as the company works through its troubled operator concentration. However, its existing investors who have held MPW for an extended period may consider locking in profits at this point, as the company's third-quarter 2024 challenges discussed earlier are worrisome.Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.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 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/performancefor information about the performance numbers displayed in this press release.Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. 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