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REGN, MAR, CWH, TRWH and MANU as Zacks Bull and Bear of the Day

For Immediate Release    

Chicago, IL – April 3, 2020 – Zacks Equity Research highlights Regeneron Pharmaceuticals, Inc. REGN as the Bull of the Day and Marriott MAR as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Camping World Holdings, Inc. CWH, Twin River Worldwide Holdings, Inc. TRWH and Manchester United plc MANU.

Here is a synopsis of all five stocks:

Bull of the Day:

Regeneron Pharmaceuticals, Inc. shares have surged 30% in 2020 as investors clamor for stocks that appear immune to the coronavirus economic downturn. Regeneron is one of multiple pharmaceutical and biotech firms that is working on possible treatments for COVID-19 and it announced recently that its “antibody cocktail therapy” could enter “human clinical studies by early summer.”

Coronavirus Response Potential

Regeneron all the way back on February 4—which seems like years ago at this point—announced that it expanded its agreement with the U.S. Department of Health and Human Services to “develop new treatments combating the novel coronavirus.” The company has a recent track record in these outbreak scenarios since its investigational Ebola treatment demonstrated positive clinical data in 2019.

REGN is working with its proprietary rapid response-capable VelociSuite technologies in its efforts to fight back against the novel coronavirus that has already killed thousands of people around the world and brought the global economy to as much of a halt as many thought possible. The company utilizes “genetically-engineered mice” with a “humanized immune system that can be challenged with all or parts of a virus of interest.”

The company boasts that its techniques and technologies are well-suited in “quickly-developing outbreak situations.” On March 17, Regeneron announced that it had “identified hundreds of virus-neutralizing antibodies,” and “plans to initiate large-scale manufacturing by mid-April with antibody cocktail therapy.”

On top of that, REGN said it had “potential to enter human clinical studies by early summer.”

Separately, the company said in a statement that alongside its collaborator Sanofi it initiated “a Phase 2/3 clinical trial evaluating Kevzara in patients hospitalized with severe COVID-19. Kevzara inhibits interleukin-6 (IL-6), which may play a role in driving the overactive inflammatory response in the lungs of patients who are severely or critically ill with COVID-19.”

Regeneron hopes that Kevzara will prove helpful in treating lung inflammation in coronavirus patients, which could help potentially keep them off ventilators and out of overwhelmed ICUs.

Other Fundamentals

Regeneron clearly appears to be at the forefront of possible COVID-19 treatments. Gilead Sciences and other giants such as Amgen and Johnson & Johnson have also joined the fight against the global pandemic.

More broadly, Regeneron is a biotech firm that has seven FDA-approved treatments and “numerous product candidates in development.” The company’s current offerings and pipeline aim to help people with everything from allergic and inflammatory diseases to cancer, infectious diseases, and more.

REGN’s proprietary VelociSuite technologies, which we already touched on, utilize “genetically-humanized mice” to help produce optimized “fully-human antibodies” and "bispecific antibodies."

Regeneron topped our Q4 fiscal 2019 earnings and revenue estimates in early February, with fourth quarter sales up 13% to $2.17 billion. The chart above also shows that REGN stock has crushed its industry in 2020, up roughly 30%, against its Bio-Med industry’s 11% average decline.

Regeneron shares have now surged nearly 50% in the last two years to crush its industry’s 22% downturn and the S&P 500’s 6% decline.

Despite resting near its 52-week highs, REGN’s valuation picture looks more attractive than it did a year ago. The stock is trading at 18.2X forward 12-month Zacks earnings estimates.

This comes in below its 12-month high of 22X and not too far off from the S&P 500 average. Plus, it trades at a massive discount compared to its Medical - Biomedical and Genetics industry's sky-high forward earnings multiples.

Bottom Line

The nearby chart shows investors that REGN’s longer-term earnings revisions activity has remained more positive, especially for fiscal 2021—with its consensus estimate up roughly 8%. This positivity helps Regeneron, which has also topped our bottom-line estimates in the trailing three quarters, hold a Zacks Rank #1 (Strong Buy) at the moment.

Looking ahead, our Zacks estimates call for the company’s adjusted fiscal 2020 earnings to jump 16%, with FY21 set to pop another 8.5% higher. On the sales front, Regeneron’s revenue is projected to surge 11.6% this year and an additional 9% in fiscal 2021 to reach $9.56 billion.

In the end, Regeneron operates a recession-resilient business and its stock price has climbed as it works on helping battle the coronavirus. Plus, REGN is part of an industry that rests in the top 13% of our more than 250 Zacks industries and sports a “B” grade for Growth in our Style Scores system. Therefore, it might be worth considering at the moment, but amid the volatility it likely isn’t wise to take too large of a position.

Bear of the Day:

 

Marriott (MAR) shares have tumbled 60% in 2020 as the coronavirus pandemic brings the travel and hotel industries to a near halt. The current conditions are clearly out of Marriott’s control. Nonetheless, the world’s largest hotel company said in March that it is starting to furlough employees as part of its effort to maintain liquidity.

Tough Times

Marriott has already started to furlough what it said will likely be tens of thousands of employees. This includes not only hotel managers and housekeepers, but also corporate staff.

Marriot noted in a March 18 release that its occupancy levels in North America and Europe had fallen below 25% over the last few days, against roughly 70% a year ago.

Looking ahead, Marriott thinks it will “see further erosion in performance in the weeks ahead and does not expect to see material improvement until there is a sense that the spread of the virus has moderated.” And the firm has already seen “historically high levels” of cancellations for stays through the first half of 2020.

On the positive side, Marriott said that it hasn’t seen any “meaningful group cancellations for 2021 related to COVID-19, and many group customers are at least tentatively rebooking for later in 2020.”

Other Fundamentals

MAR stock has tumbled 60% so far in 2020 and it closed regular trading Thursday at $63 per share. Fellow hotel giant Hilton stock is down nearly 50% YTD, with Hyatt shares down 55%.

Marriott is now trading at 2016 levels. But the uncertainty makes even its discounted price hard to touch for now, until there are at least some signs that people are going to be able to return to hotels sometime soon.

Marriott is currently trying to preserve liquidity. The company noted that it has a “$4.5 billion revolving credit facility that expires in June 2024 to provide liquidity when needed.” And as of March 17, the hotel powerhouse had already “drawn down $2.5 billion primarily to support commercial paper maturities.”

The firm said that it can also hold on to cash by “reducing or eliminating share repurchases, suspending the cash dividend, reducing payroll and other costs and cutting back investment spending.” Marriott said that it hasn’t repurchased shares in 2020 “other than the $150 million of share repurchases reported” in its February 26 press release. Plus, MAR now “anticipates that its previously announced first quarter 2020 dividend, payable on March 31, will be the last until conditions improve.”

Bottom Line

The nearby chart shows that Marriott’s earnings revisions have tumbled recently, which helps it hold a Zacks Rank #5 (Strong Sell) right now. Worse still, the company withdrew “all aspects of its outlook and assumptions for 2020” that it laid out on February 26.

Amid the total uncertainty surrounding the continued spread of the coronavirus, investors should likely stay away from MAR stock, and most of its travel, hotel, and hospitality peers. Plus, Marriott is currently looking into its third data breach in the last 18 months.

All that said, investors might want to keep an eye on MAR stock as it likely continues to fall, because when travel appears to be set to return to even a semi-normal state, Marriott could be ready for a big bounce back.

Additional content:

Leisure Stocks Hit by Coronavirus: 3 Stocks Defying Carnage

The coronavirus pandemic has so far claimed thousands of lives across the globe and brought governments to their knees. Apart from disrupting daily lives and straining the global health care system, the virus outbreak has left businesses around the world in a lurch. In order to counter this menace, governments and local administration authorities have enforced full or partial lockdown measures and advocated social distancing to curb the spread as much as possible.

Cruise Stocks Sinking

The cruise industry, which is one of the fastest-growing categories in the leisure travel market, has taken a massive hit owing to stringent restrictions. Markedly, the $45 billion industry made the decision to suspend operations from U.S. ports of call for 30 days with the Trump administration imposing significant travel embargoes on passengers from 26 European countries.

Major cruise companies that have been affected by these prohibitory orders include Carnival Corp. and Norwegian Cruise Lines. With more and more passengers being tested positive for COVID-19, these Zacks Rank #5 (Strong Sell) stocks have decided to halt operations of multiple cruise lines, thereby extending the suspension of all voyages till May.

Consequently, shares of Carnival and Norwegian Cruise Line have plunged 33.2% and 12.9% in yesterday’s trading session to close at $8.80 and $9.55, respectively. Needless to say, bookings for the broader business are also going to be negatively impacted, thanks to severe travel restrictions.

Top 3 Leisure Stocks

However, there are certain leisure stocks that are bucking the trend despite all adversities. Given the intense market volatility, investors can expect to profit from these picks, which are well poised to gain from strong business fundamentals and solid Zacks Rank.

Camping World Holdings, Inc.: With a market cap of $502.1 million, Camping World offers products and services for recreational vehicle enthusiasts. Based in Lincolnshire, IL, the company is focused on executing a back-to-basics strategy with more closures of outdoor retail stores amid the global pandemic. Moreover, it is leaving no stone unturned to ensure the safety of employees. Impressively, Camping World intends to provide financial assistance to ones, who are experiencing personal and financial difficulties as a result of the COVID-19 pandemic.

Sporting a Zacks Rank #1 (Strong Buy), the company has a healthy dividend yield of 5.6%. The Zacks Consensus Estimate for the current and next year earnings is pegged at 21 cents and 63 cents, respectively. Signifying an inherent growth potential, the estimates represent a year-over-year improvement of 163.6% and 200.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Twin River Worldwide Holdings, Inc.:With a market cap of $410.7 million, Twin River Worldwide is a gaming company, which is involved in the operation of various casinos and racetrack properties in Mississippi, Colorado and Delaware. Headquartered in Rhode Island, the company recently sought to employ furloughed casino workers and also confirmed that it has sufficient liquidity to meet all of its obligations in the face of the coronavirus adversity. On the employee front, the company has also established a separate fund to provide financial assistance and health coverage to employees who are encountering severe hardships during the shutdown period.

Twin River Worldwide sports a Zacks Rank #1. With a dividend yield of 3.1%, the Zacks Consensus Estimate for the current and next year earnings has improved an impressive 41.2% and 44.5%, respectively, over the last 60 days.

Manchester United plc: With a market cap of $610.6 million, Manchester United is a professional sports club, which is headquartered in Greater Manchester, the U.K. The company manages various club affiliated activities of its football club, which includes fan zone, team merchandise and media network with news and sports features.

The Zacks Rank #2 (Buy) company has a long-term earnings growth expectation of 22.8%. The Zacks Consensus Estimate for the current and next year has improved 133.3% and 36.4%, respectively, over the last 60 days. The stock topped earnings estimates thrice in the trailing four quarters. It has a trailing four-quarter positive earnings surprise of 89.9%, on average.

Summing Up

With the pandemic aggravating with each passing day, it is crucial for the governments of various countries to act promptly to tide over the situation. Countries globally are taking extreme measures to impose quarantines, shut airports and seal international borders in an attempt to limit the catastrophic losses. Notably, premier cruise companies are also changing sailing itineraries and extending “Cruise with Confidence” cancellation policy through Sep 1, 2020. In such an hour of crisis, investors are likely to benefit from some priceless leisure stocks that stand tall among the ruins.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

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Marriott International, Inc. (MAR) : Free Stock Analysis Report
 
Regeneron Pharmaceuticals, Inc. (REGN) : Free Stock Analysis Report
 
Camping World Holdings Inc. (CWH) : Free Stock Analysis Report
 
Manchester United Ltd. (MANU) : Free Stock Analysis Report
 
Twin River Worldwide Holdings, Inc. (TRWH) : Free Stock Analysis Report
 
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