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Hold Petco (WOOF) as It Rides on Continued Demand for Pet Care

Petco (WOOF) by dint of its wide product and services portfolio, omni-channel presence and strategic initiatives is well poised to cash in on the expa…

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September
2, 2021

3 min read

This story originally appeared on Zacks

The stock of Petco Health and Wellness Company WOOF is poised for long-term growth on the back of surging demand for petcare.The $5-billion pet care company provides an entire ecosystem of care for pets, both online and offline. In the recently reported quarter, its earnings delivered healthy figures, underscored by 50% growth in recurring revenue customers, which reflects customers’stickiness for its products and services and creates earnings stability since recurring nature of revenue will keep in flowing quarter after quarter.This was the 11th consecutive quarter of comp sales growth, driven by recurring revenue offerings, rapidly expanding vet business and digital growthThe top-line performance reflected 19% adjusted EBITDA and 127% adjusted EPS growth. During the quarter, Petco added around 1 million customers, comprising millennials and Gen Z buyers, primarily.Apart from growing its revenues, the company is focusing on deleveraging its balance sheet. Net debt was reduced to 1.5 billion from $3.1 billion a year earlier. Free cash flow of $103 million was generated in the first six months of 2021, up 142% year over year.A guidance raise following the second-quarter 2021 earnings results reflect a strong business momentum. The company now expects revenues to grow 14-16% to $5.6-$5.7 billion and EPS in the band of 81-85 cents. Earlier, revenues were expected to grow 11-13% and the EPS was estimated from 73 cents to 76 cents.With its focus on omni-channel sales, Petco is uniquely positioned to lead the petcare market, which is witnessing an increased pet ownership, a greater spend per pet and the continued humanization and premiumization of the pets.Capital expenditures associated with the building of vet hospitals, digital innovation and supply chain will drive long-term growth.The company with its wide product and service bouquet along with its omni-channel presence is perfectly poised for tapping a growing petcare market. The market size of petcare products surpassed the $232-billion mark in 2020 and is likely to see a CAGR of above 6.1% between 2021 and 2027.Other companies that are relying on the pet wellness industry include PetIQ, Inc.PETQ, IDEXX Laboratories, Inc. IDXX and Phibro Animal Health Corp. PAHC among others.Petco currently has a Zacks Rank #3 (Hold) and declined 26.6% year to date after gaining 112% since the pandemic hit last year and shot up the pet adoption rates. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Image Source: Zacks Investment ResearchThe share price depreciation this year so far should not raise a concern for long-term investors as the company’s strong growth in an attractive market will aid its stock price to appreciate going forward.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don’t buy now, you may kick yourself in 2022.Click here for the 4 trades > >Want 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 IDEXX Laboratories, Inc. (IDXX): Free Stock Analysis Report Petco Health and Wellness Company, Inc. (WOOF): Free Stock Analysis Report Phibro Animal Health Corporation (PAHC): Free Stock Analysis Report PetIQ, Inc. (PETQ): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research

How Twitter Became the Unlikely Hero in a Rental Car Fiasco

September
2, 2021

7 min read

This story originally appeared on NerdWallet

You’ve seen a friend angry-tweeting at an airline because a hurricane caused a flight delay, a futile attempt. But one Avis customer turned to Twitter after days of frustration and a bogus rental car bill — all because he said Avis “stole” his rental car — and it worked.Tarikh Campbell, who works in Boston as a program manager for Microsoft, experienced a peculiar situation after renting a vehicle from Avis for a trip to his childhood hometown in Teaneck, New Jersey. He checked the car out of the lot just fine, but as he went to grab his car from the driveway where it was parked, it was gone.Fearing it was stolen, Campbell reviewed footage from a neighbor’s security cameras and saw the car had been towed, but for no explainable reason. While a bizarre incident on its own, perhaps more troubling is how little support he said he received from Avis in uncovering why it was towed and where it went.Avis customer service representatives gave him phone numbers of employees who could escalate the issue, but Campbell says one number was out of service and the other didn’t take voicemails despite no answer. Of the representatives he did talk to, Campbell says they didn’t know about the towing, yet told him he would be liable if the car wasn’t returned.It wasn’t until after he filed a police report, spent hours on hold, was told by Avis he was liable and was charged the full rental price plus late fees that Campbell eventually learned that Avis itself took the car. So Campbell took to Twitter.When you’ve exhausted every other outlet, turn to Twitter“A relative suggested I take my case to Twitter,” Campbell tells NerdWallet. “Viral tweets have gotten the attention of authority in the past, so maybe Avis’ account would reach out to me.”Campbell outlined his predicament in a roughly 30-tweet thread. The original tweet garnered over 30,000 retweets and likes. Replies included people sharing their own rental car horror stories and other brands reaching out, like Avis’ competitor Hertz.

26 Brilliant Ways to Use Psychology in Your Copywriting (With Examples)

26 Brilliant Ways to Use Psychology in Your Copywriting (With Examples)

When my cat won’t eat the food I’ve given her, I “begrudgingly” oblige, pick up the dish, transfer said food to a different dish, and set said different dish back down. She then proceeds to gobble up said [same] food.There’s a name for that effect. And it’s one of nine psychological phenomenons that I’m going to share with you today, that you can use in your copywriting.

But before I do, I want to make one thing clear: I’m not in the business of tricking or coercing anyone into doing something they shouldn’t. That’s not effective copywriting. 

That being said, I’m going to share with you how to write not deceiving copy, but copy that harmonizes with your readers’ brains to deliver more attractive, enjoyable, and effective content. 

So without further ado, read on to learn:

Nine psychological effects that influence our behaviors.
Over 26 ways to use them in your marketing copy.
Tips and examples so you can make sure you’re doing it right.
Let’s do it.

The Pratfall Effect

When I first read about this one, I assumed that “Pratfall” was a social psychologist. Turns out, it’s a word that means “a fall onto one’s own buttox.”

What it is

The Pratfall Effect (aka the Blemishing Effect) says that competent individuals become more appealing to others after they make a mistake. 

How to use it in copywriting

Now this doesn’t mean that you need to go around making mistakes. Our definition says that this only happens when the mistake-maker is perceived as highly competent. So you generally don’t make mistakes, but when you do, it’s endearing. 

This makes sense because we are attracted to what we can identify with/relate to, and we can all identify with mistakes. So, using this effect in your copywriting can humanize your business, make you an approachable expert, and build emotional connections with your audience.

1. Teach from your own mistakes

In his post on attribution modeling, top PPC expert Mark Irvine starts off with “A Personal Case Study of Attribution Modeling Failure.” Just when you thought you couldn’t like this guy any more than you already do… ya do.

You can also write a blog post around a list of mistakes you’ve made and what you learned from them. Not only are you increasing your interpersonal appeal, but you’re helping others to avoid those mistakes themselves. For example: I Spent $4M on Google Ads – Here Were My 5 Biggest Mistakes.

This headline falls under another copywriting tactic that we’ll get to later (and when we do you’ll see the irony).

2. Apologize when you’ve made one

Back in the day when I was a fledgling content marketer for a different company, one of my coworkers made a mistake that caused a mass email to address people by the wrong first name—disgruntling our subscribers. 

She was mortified. Tears were shed. Faces were palmed. But to our delightful surprise, her apology email was met with a fan-mail-like wave of positive and supporting responses.

Now obviously, intentionally making mistakes and apologizing for them is NOT a marketing strategy. But should you have yourself such a pratfall, come forward about it in a personal way.

Here’s an email I once got from Hot Pod, where the writer Nick acknowledges that he “slipped up in the newsletter production this morning; that’s my bad.”  

The Novelty Effect

Remember my cat from the intro? Her finally eating the food didn’t have anything to do with the particular dish I switched to, but simply because it was a different dish from the original. In other words, it was the novelty of the dish that made the food more appealing.

What it is

The Novelty Effect refers to when there is an improvement or positive result to a change, due NOT to that specific change, but to the fact that there was any change at all. Once the novelty wears off, whatever improved will return back to its original performance.

How to use it in copywriting

Here’s how to use the Novelty Effect to your advantage and how to prevent it from messing with your A/B testing.

3. Refresh copy and creative regularly

Or maybe you take advantage of the Novelty Effect. If you find that changing a title or headline on a particular page on your site does seem to spike performance, find out when it wears off and get into the habit of changing it regularly. You could even rotate between three different versions of the same offer.

Same old offer + new copy = “new” offer

4. Change up your blog posts

It can get easy to fall into the trap of posting the same type of blog post over and over again. But this is an easy way to become wallpaper for your audience. So don’t just occasionally change it up to generate some engagement. Always be writing different types of posts so that your blog is a novelty in and of itself.

There are lots of different blog post types:

Q&A
Listicles
Mistakes to avoid
Eye-opening stats
Ideas and strategies
Templates and examples
Guest posts
Personal insights
Tool or resource round-up
Original data
Success stories
More blog post ideas here.

5. Be careful with A/B testing

A/B testing your landing page or ad copy is the best way to find out what works, but according to the Novelty Effect, that spike in clicks or conversions after changing your copy may not be due to the copy itself. It could just be that people got so used to (and bored with) seeing the original copy that the new copy catches their attention. 

As Instapage suggests, if you’re doing any sort of split testing with your marketing copy, make sure to either give the experiment time for the novelty to wear off, OR run the test to a new audience or new visitors to your site. This way, you can ensure that it really was the copy that improved conversion—and that the improved conversion rate won’t drop off.

The Priming Effect

The Priming Effect comes in handy not for your call to action copy, but for the copy preceding it.

What it is

The Priming Effect says that what we do in a particular situation is influenced by what we saw or heard directly prior to that situation—EVEN if we didn’t consciously take note of those things AND without realizing we’re connecting the two together.

One type of priming is called the Florida Effect. In this 1996 social experiment, people who were unconsciously exposed to words associated with old age actually walked slower than those who were exposed to random words. 

In other words, the words they were exposed to primed their behavior.

How to use it in copywriting

This means that the words and phrases you use in your copy are priming people left and right. Heck, you’re being primed right now (for what, I don’t know; I’m not doing it on purpose). So harness the power of psychology to influence your readers’ decisions.

6. Use emotional words before you get to the ask.

If you want people to feel and act confident in clicking that CTA button on your page, well then prime them with emotional words and phrases that cause them to feel that way.

If you want them to feel like an expert in their field who is worthy of your product, cater your copy to those emotions. Or maybe you want them to feel fearful of an outcome so as to seek safety with your service. Prime their behavior with emotional words—in fact, here are 273 emotional words and phrases you can choose from.

7. Tell readers what to expect in your intros

Another aspect of priming says that leading off with the purpose of a piece of content improves comprehension and recall of that content. So let’s take a look at this introductory paragraph to a recent blog post by the fabulous Susie Marino. The title of the post is “How to Improve Google Shopping ROAS with Priority Bidding.”

Instead of leading off with a brief explanation of what priority bidding is, she leads off with a clear picture of what readers can expect from the post as a whole—what value they will get out of it.

Based on the words encased in red, readers can quickly understand that she’s going to walk them through a somewhat complex strategy that will help them save on their ad spend. She’s got their attention and they want to read more.

The Focusing Effect

The Focusing Effect tells us to be strategic in how we organize information.

What it is

The Focusing Effect says that people make decisions according to the most pronounced and distinct information available in their working memory—meaning they don’t factor in equally important information that is less prominent in their brains. 

So we know about staying “top-of-mind.” This is why we run ads, publish articles, post on social media, and send emails. But “top-of-mind” doesn’t mean “pronounced and distinct.” And it’s not your business in general that you want top of mind here, but rather, information specific to the decision you want your readers to make. 

How to use it in copywriting

9. Strategically place information before your CTA

Take a look at this marketing email from Grove Collaborative. Before I even get to the offer, the email copy tells me that that they’ve kept 5.3 million pounds of plastic out of waterways.

So even though I know that GC provides eco-friendly products, this distinct fact in my head gives much more meaning to the plastic-free bottle they are offering. No persuasion tricks needed—just simple facts.

10. Make the core value proposition large and obvious

The Focusing Effect is also why you need a strong unique selling proposition—for your business overall but also mini-USPs for each of your offerings. The idea is to make the ultimate benefit as clear and obvious as possible to readers before reading anything else on your page. With this focal point, they’ll read everything else through the lens of that ultimate benefit. 

Can’t un-see!

So if I land on Digit’s website, I will now read everything through the lens of becoming less worried about my money—whether I mean to or not. This is what their app does, and I am oriented to that as soon as I arrive.

The “But You Are Free” Effect

The BYAF Effect is less for sales copy but more for smaller asks you make.

What it is

The But You Are Free Effect (BYAF) says that telling people they don’t have to do something makes it more likely that they will.

As Jonathan Becher explains in his article, a study on over 22,000 subjects found that when people were asked to but also told they didn’t have to, they donated more money, more readily agreed to take a survey, and gave more money to someone asking for bus money home.

In other words…

How to use it in copywriting

This tactic isn’t the best for influencing the decision of whether to buy or not, but rather which one to buy. However, you can use it in the “to do or not to do” sense with smaller/non-monetary asks.

11. Use the phrase directly

Here are some examples, such as with asking for a review, suggesting a package or resource, or gaining and retaining email subscribers.

We would love it if you left us a review, but you are of course free to pass as well!
Our clients see the best success with this package, but you are free to decide.
We think this resource would be a great fit but you are free to decide.
We think you’ll love our newsletter, but you are free to just browse around our site.
Are you sure you want to unsubscribe? We hate to see you go, but you are free to do whatever makes your inbox happy!

13. Try other ways of saying it.

And you don’t always have to use those exact words with this persuasion technique. Alternatives include:

But you are by no means obliged!
You can, of course, unsubscribe at any time
But you know your needs best
But it’s entirely up to you
We have a favor to ask (but only if you want to!)
The Primacy/Recency Effect

There are sequences everywhere in copywriting, so think outside the box with this one.

What it is

Also called the Serial Position Effect, this is where people are most likely to remember the first and last items in a sequence.

How to use it in copywriting:

12. Convey clear value in your introductions and conclusions

Write attention-grabbing introductions that convey what the reader will get out of the post; and conclude with a numbered or bulleted list recapping what you covered and reinforcing that ultimate benefit. This way, even if they don’t retain the details of the post, they will retain the association of your business with that ultimate benefit.

13. Bullet out features strategically

Make sure your most important items are the first and last in the list. This goes for product descriptions, listicles, feature/benefit lists, and more.

Make your two most important points the first and last items in your lists.

14. Write powerful email subject lines and closing statements

As Kaleigh Moore points out, this also means that the opening and closing lines of your emails are your two “most valuable pieces of real estate.” 

The Cognitive Fluency Effect

So your copy should be easy to read for obvious reasons—no one likes unnecessary difficulty. But as it turns out, it also has a profound effect on our perception of truth.

What it is

The Cognitive Fluency Effect says that the easier it is to process a piece of information, the more we will perceive it as true and accurate. The idea here is that our brains don’t have time to pay special attention to something it has already encountered—but that also goes for things similar to what it has encountered.

This great UXmatters article on the topic describes a study where people who read a set of statements that were easy to read rated them as more truthful than people who read the same set of statements that were harder to read.

In short: Because familiarity is fluent for us, fluency feels familiar to us (even if it’s not).

How to use it in copywriting

I have three suggestions here.

15. Make it easy to read (be familiar, not fancy)

In my article on how to write copy that sells, I provide lots of tips on how to do this: remove adjectives, fancy words, non-words, and more. One of my examples was from Sleeknote.

From Sleeknote’s homepage

While Sleeknote offers plenty of advanced features and benefits in the way of click-through rate, conversion rate optimization, campaigns, domains, custom CSS, and more—you don’t see any of that language here. You see simple, familiar terms that don’t make them look like they’re trying to impress you or convince you of anything. It inherently feels more trustworthy. 

16. Write in conversational style

This one’s a no-brainer. Write your blog posts, emails, and other website copy as if you’re conversing with your audience—not giving a course lecture. Take this LOCALiQ blog post on How to Claim Your Business on Google, for example. The author, Mary Lister, is great at writing conversational copy. She writes:

“Most people tell you that Google My Business (GMB) is essential for local SEO, and they’re not wrong, but it’s also a big step to getting on the map, period. Even if you don’t have a brick-and-mortar location, verifying your business with Google will make you searchable — and findable — when you want to stand out from your competition.”

With the information so simply put (including the “This could be you!” caption on the diagram), it’s easier to understand and trust that it’s true. (Of course, make sure you’re explaining actually true facts here.)

Our brain says that conversational = familiar = true

17. Be super blunt

You can also use cognitive fluency for your taglines. 

The Cognitive Fluency Effect (again)

There’s another aspect of cognitive fluency that I want to cover, where the difficulty of reading or absorbing the information is transferred onto the process it is describing.

So in other words, it’s not just about the exact words you use in your copy, but how that copy appears to the eye.

So in the example UXmatters gives, people were asked to choose between two phones. For one group, the information about the phones was presented in an easy-to-read font. For the other group, it was in a more difficult font.

For the difficult font group, 41% postponed their decision. For the easy font group, only 17% of postponed the decision.

How to use it in copywriting

Unsurprisingly, these tips have more of a design focus.

18. Present information clearly

The first is that the more difficult it is to obtain the information for a decision, the more difficult the decision will appear to be. This is why pricing pages and cognitive fluency have a bit of a turbulent relationship. It’s essential to make sure your pricing page copy is easy to understand and visually organized in a way that supports decision-making.

Check out this example by Semplice.

There’s more information on that page, of course. But this is the primary visual on the page, and its simplicity in both design and copy helps the reader get oriented and understand their options right away. Now, they don’t have to dig through the details to come up with a potential decision. They can have a decision in mind and then read on to gather more details.

19. Describe easy processes…easily

The other implication of the Cognitive Fluency Effect is that the more difficult it is to read instructions for a task, the more difficult we perceive the task to be. I’ve seen plenty of emails and websites where a business says “[Doing X] is easy!” and then plunges you into a sea of words. This is just one mild example:

A numbered list within a numbered list, followed by a bulleted list = not easy

If you want your readers to believe that it’s easy, you need to make your copy concise and easy to digest. You can always add more details in a subsequent section on the page, or link to a longer page. For example:

Of course, there is a lot more that goes into partnering with a website design agency, but I don’t care what anyone says—you can always simplify a complex process down into three to five core steps. 

20. Use easy-to-read fonts

If you want to convey that a process is easy, you also must make sure the font you use is easy to process. Studies have proven that when people read a simple set of instructions for a particular process, the more difficult the font, the more time they estimate the task to take.

For example:

The more difficult the font, the more difficult the process your copy is describing is perceived to be.

The Illusory Truth Effect

Don’t worry, we’re not tricking our readers with this effect.

What it is

The Illusory Truth Effect says that the more often we are exposed to a message, the more important our brain perceives it to be, and the truer it becomes. In one study, survey participants were asked to rate a particular statement according to how trustworthy it was. Participants who had been exposed to that statement multiple times were more likely to rate it as true than those who had been exposed only once. 

So basically, brainwashing. But like I said, that’s not what we’re doing with our copy here.

How to use it in copywriting

Your goal is not to convince your readers of an illusory truth. Use this effect to drive home important messages that support your product, service, or brand.

21. Use repetition

Take this example from ThougthSpot. Whether you’re on their homepage, browsing Facebook, or scrolling through LinkedIn, you see the same thing repeated over and over: “Dashboards are dead.” 

Of course, data dashboards are far from dead. And ThoughtSpot is not trying to trick you into believing otherwise. Rather, their product makes true the fact that there are better ways to report on your data these days. And with repetition throughout their assets, they are building this truth in your mind. 

22. Be consistent

You also don’t have to repeat the same exact statement over and over. You can consistently convey the same message over and over using different words and phrases.

Let’s take a gander through ReferralCandy’s Twitter feed, Facebook page, blog posts, and homepage.

Though each piece of copy is different, there is one central message getting repeated here: ReferralCandy wants to help you make and save money. Nice work guys.

The Open-Loop Effect

Remember this from earlier?

When I said “This headline falls under another copywriting tactic that we’ll get to later (and when we do you’ll see the irony).”

By saying “we’ll get to that later,” I created an open loop without even realizing it.

Which is why I then added the parenthetical after. “(and when you do you’ll see the irony).”

Which I then realized made it an even more compelling open loop.

Apparently I’m an open loop machine.

What it is

The Zeigarnik Effect (Open-Loop Effect) says that our brains focus on and better remember incomplete tasks (open loops) more than it does complete tasks (closed loops). And this doesn’t just apply to actual physical tasks, but mental ones too. Like, finding out what happens at the end of [the latest show you’re binge-watching on Netflix].

The brain longs to close loops. This is why we get curious. Love stories. Click on clickbait.

How to use it in copywriting

So in copywriting, open loops are basically teasers, and there are lots of ways to insert them into your content. The idea is to provide just enough information to pique interest, but not enough to close the loop.

23. Use “one” in your titles

For example:

The Number One Reason You’re Not Getting Hired
This One Simple Strategy Increased Our Conversion Rate 20%
Want to Run the Perfect Event? Avoid This One Mistake
Of course, you’ll want the outcome to be compelling as well. So in this YouTube video title, we read “How we used this one simple strategy to generate 43,000 leads for our business in 10 months.” 

And what’s great about this type of title is that you don’t have to focus on one thing in your video or blog post. For example, you can provide one mistake and then give X tips on how to avoid it.

24. Include your favorite

When you’re sharing a list of tips, strategies, examples, or mistakes, add your favorite one to the title. For example:

8 Free Resources to Learn How to Invest (#6 is Our Favorite!)
15 Common Mistakes Developers Make (Brace Yourself for #4 )
12 Yoga Poses to Improve Your Sleep (#7 is a Life Changer)
25. Take the “find out” approach

If you’re trying to get someone to sign up for a webinar or download an ebook, take the approach of “find out [why, how, when, etc.]”

In this example, you learn that by signing up for the webinar, you can close those open loops that your brain is now itching to close. You’ll find out why more than 20% of marketing emails reach the inbox. And why click-throughs only represent 1/4 of total responses. And how subscribers really feel about email relevance. Great work Validity.

26. Throw some loops into your blog post intros 

So as I demonstrated in this post, you can throw in little open loops to keep readers engaged in the current piece of content. Use phrases like

But we’ll get to that later
Which we’ll soon learn was a big mistake
Or start off your blog post with a novel-style opener.

So there I was…
And that’s when I realized I…
I never meant to…
Use psychology to improve your copywriting 

Use these tips and psychological effects to write copy that builds your brand, earns your readers’ trust, and makes for a positive experience overall. Let’s sum it all up:

The psychological effects:

Pratfall Effect: Your likeability will increase if you’re not perfect.
Novelty Effect: The event of a change affects performance rather than the change itself.
Priming Effect: Words subconsciously prime our subsequent behaviors.
Focusing Effect: We rely on the most prominent information in our memory to make decisions.
But You Are Free Effect: We’re more likely to do something if we’re told we don’t have to do it.
Primacy/Recency Effect: We remember the first and last items in a sequence.
Cognitive Fluency Effect: Easy to read is translated as more true and easier to do.
Illusory Truth Effect: Repetition leads to belief.
Open Loop Effect: Our brains chase after closure.
The copywriting tips:

Talk about your own mistakes.
Apologize when you’ve made one.
Refresh copy and creative regularly.
Change up your blog posts.
Be careful with A/B testing.
Use emotional words before you get to the ask.
Tell readers what to expect in your intros.
Strategically place information before your CTA.
Make the core value proposition large and obvious.
Use ”but you are free” directly.
Say “but you are free” without actually saying it.
Convey clear value in your introductions and conclusions.
Bullet out features strategically.
Write powerful email subject lines and closing statements.
Be familiar, not fancy.
Write in conversational style.
Be super blunt.
Present information clearly.
Describe easy processes easily.
Use easy-to-read fonts.
Use repetition.
Be consistent
Use “one” in your titles.
Include your favorite.
Take the “find out” approach.
Add open loops to blog post intros.

3M (MMM) Stock Sinks As Market Gains: What You Should Know

3M (MMM) closed at $193.44 in the latest trading session, marking a -0.67% move from the prior day.

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September
1, 2021

4 min read

This story originally appeared on Zacks

3M (MMM) closed at $193.44 in the latest trading session, marking a -0.67% move from the prior day. This move lagged the S&P 500’s daily gain of 0.03%.Prior to today’s trading, shares of the maker of Post-it notes, industrial coatings and ceramics had lost 3.13% over the past month. This has lagged the Conglomerates sector’s gain of 3% and the S&P 500’s gain of 3.02% in that time.MMM will be looking to display strength as it nears its next earnings release. In that report, analysts expect MMM to post earnings of $2.45 per share. This would mark year-over-year growth of 0.82%. Meanwhile, our latest consensus estimate is calling for revenue of $8.92 billion, up 6.79% from the prior-year quarter.Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.11 per share and revenue of $35.38 billion. These totals would mark changes of +15.68% and +9.92%, respectively, from last year.Any recent changes to analyst estimates for MMM should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. MMM is currently sporting a Zacks Rank of #3 (Hold).Valuation is also important, so investors should note that MMM has a Forward P/E ratio of 19.26 right now. This valuation marks a no noticeable deviation compared to its industry’s average Forward P/E of 19.26.Meanwhile, MMM’s PEG ratio is currently 2.03. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. Diversified Operations stocks are, on average, holding a PEG ratio of 1.9 based on yesterday’s closing prices.The Diversified Operations industry is part of the Conglomerates sector. This industry currently has a Zacks Industry Rank of 50, which puts it in the top 20% of all 250+ industries.The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.You can find more information on all of these metrics, and much more, on Zacks.com.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure > >Want 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 3M Company (MMM): Free Stock Analysis Report To read this article on Zacks.com click here.

Lululemon (LULU) Stock Sinks As Market Gains: What You Should Know

Lululemon (LULU) closed the most recent trading day at $395.53, moving -1.16% from the previous trading session.

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September
1, 2021

4 min read

This story originally appeared on Zacks

Lululemon (LULU) closed at $395.53 in the latest trading session, marking a -1.16% move from the prior day. This move lagged the S&P 500’s daily gain of 0.03%.Coming into today, shares of the athletic apparel maker had lost 1.8% in the past month. In that same time, the Consumer Discretionary sector gained 2.59%, while the S&P 500 gained 3.02%.Wall Street will be looking for positivity from LULU as it approaches its next earnings report date. This is expected to be September 8, 2021. In that report, analysts expect LULU to post earnings of $1.20 per share. This would mark year-over-year growth of 62.16%. Our most recent consensus estimate is calling for quarterly revenue of $1.34 billion, up 47.88% from the year-ago period.LULU’s full-year Zacks Consensus Estimates are calling for earnings of $7.10 per share and revenue of $5.96 billion. These results would represent year-over-year changes of +51.06% and +35.46%, respectively.Any recent changes to analyst estimates for LULU should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.55% higher. LULU is currently sporting a Zacks Rank of #2 (Buy).Investors should also note LULU’s current valuation metrics, including its Forward P/E ratio of 56.35. Its industry sports an average Forward P/E of 17.66, so we one might conclude that LULU is trading at a premium comparatively.We can also see that LULU currently has a PEG ratio of 3.07. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. The Textile – Apparel industry currently had an average PEG ratio of 1.1 as of yesterday’s close.The Textile – Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 23, putting it in the top 10% of all 250+ industries.The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.You can find more information on all of these metrics, and much more, on Zacks.com.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure > >Want 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 lululemon athletica inc. (LULU): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research

Can Earnings Continue to Improve?

We know that the earnings picture remains strong, even though the growth pace is expected to decelerate significantly in Q3 and beyond. What we don’t…

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September
1, 2021

5 min read

This story originally appeared on Zacks

Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here > > >Here are the key points:We know that the earnings picture remains strong, even though the growth pace is expected to decelerate significantly in Q3 and beyond. What we don’t know at this stage is whether the incremental change in the earnings outlook over the coming days, as reflected in earnings estimate revisions, will be positive or negative.Estimates for 2021 Q3, whose early reports will start coming out in the coming days, have not moved up as much as had been the case in the comparable periods in the last few quarters. That said, the revisions trend remains positive and could very well gain pace as the reporting cycle gets underway.Total Q3 earnings for the S&P 500 index are expected to be up +26.2% from the same period last year on +13.7% higher revenues. This would follow the +94.6% earnings growth on +25.1% higher revenues in Q2.For the 493 S&P 500 members that have reported Q2 results already, total earnings are up +95.9% on +25.5% higher revenues, with 87.2% beating EPS estimates and 86.8% topping revenue estimates.The notable positives in the Q2 reporting cycle included broad-based strength, with the aggregate quarterly earnings total reaching a new all-time record, impressive momentum on the revenue side and continued positive estimate revisions for the current period (2021 Q3) and beyond, albeit at a decelerated pace.Looking at the calendar-year picture for the S&P 500 index, earnings are projected to climb +42.5% on +13.1% higher revenues in 2021 and increase +8.9% on +6.4% higher revenues in 2022. This would follow an earnings decline of -13% on -1.7% lower revenues in 2020.The implied ‘EPS’ for the S&P 500 index, calculated using the current 2021 P/E of 23.4X and index close, as of August 31st, is $193.98, up from $136.10 in 2020. Using the same methodology, the index ‘EPS’ works out to $211.23 for 2022 (P/E of 21.5X). The multiples have been calculated using the index’s total market cap and aggregate bottom-up earnings for each year.The earnings focus lately has been on retailers and the numbers from that space are as strong and impressive as we have been seeing consistently from other sectors in the Q2 reporting cycle.Results from most of the specialty and department store operators were as strong as those from the big-box players. In fact, the earlier results from Walmart WMT, Target TGT, Home Depot HD and Lowe’s LOW provided useful read-through about the state of the consumer.The market’s varied reaction to the big-box results isn’t so much a function of the quality of the reports, but rather how these stocks had performed in the run up to the results. The state of the consumer remains strong and these retailers have refined their business models to capitalize on this favorable backdrop.The long-feared drop off in growth from these big-box operators in the post-Covid world has yet to fully materialize, though rising costs from a number of areas including inputs, freight, payroll and supply-chain disruptions cast doubts about the margins outlook. That said, these headwinds are hardly unique to the retail space, as we heard consistently from management teams across different sectors.We discussed the Retail sector’s scorecard in greater detail in the body of the report. But suffice it to say, the sector’s Q2 results have been strong, following the trends elsewhere.The Earnings Big PictureLooking past the Q2 earnings season, the expectation is for earnings growth of +26.2% on +13.7% higher revenues in 2021 Q3. Estimates for the current period (2021 Q3) have gone up, as the chart below shows.Image Source: Zacks Investment ResearchPlease note that while the Q3 estimate revisions trend remains positive, it is not as strong as we had seen in the comparable periods of the preceding two quarters. It might be nothing more than a reflection of analysts’ tentativeness about the impact of the ongoing Delta variant, but it is nevertheless something we will be closely monitoring in the days ahead. The chart below provides a big-picture view of earnings on a quarterly basis.Image Source: Zacks Investment ResearchThe chart below shows the overall earnings picture on an annual basis, with the growth momentum expected to continue.Image Source: Zacks Investment ResearchWe remain positive in our earnings outlook, as we see the full-year 2021 growth picture steadily improving, with the revisions trend accelerating in the back half of the year.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure > >Want 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 Target Corporation (TGT): Free Stock Analysis Report Walmart Inc. (WMT): Free Stock Analysis Report Lowes Companies, Inc. (LOW): Free Stock Analysis Report The Home Depot, Inc. (HD): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research

Can Earnings Continue to Improve?

We know that the earnings picture remains strong, even though the growth pace is expected to decelerate significantly in Q3 and beyond. What we don’t…

Grow Your Business,
Not Your Inbox

Stay informed and join our daily newsletter now!

September
1, 2021

5 min read

This story originally appeared on Zacks

Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here > > >Here are the key points:We know that the earnings picture remains strong, even though the growth pace is expected to decelerate significantly in Q3 and beyond. What we don’t know at this stage is whether the incremental change in the earnings outlook over the coming days, as reflected in earnings estimate revisions, will be positive or negative.Estimates for 2021 Q3, whose early reports will start coming out in the coming days, have not moved up as much as had been the case in the comparable periods in the last few quarters. That said, the revisions trend remains positive and could very well gain pace as the reporting cycle gets underway.Total Q3 earnings for the S&P 500 index are expected to be up +26.2% from the same period last year on +13.7% higher revenues. This would follow the +94.6% earnings growth on +25.1% higher revenues in Q2.For the 493 S&P 500 members that have reported Q2 results already, total earnings are up +95.9% on +25.5% higher revenues, with 87.2% beating EPS estimates and 86.8% topping revenue estimates.The notable positives in the Q2 reporting cycle included broad-based strength, with the aggregate quarterly earnings total reaching a new all-time record, impressive momentum on the revenue side and continued positive estimate revisions for the current period (2021 Q3) and beyond, albeit at a decelerated pace.Looking at the calendar-year picture for the S&P 500 index, earnings are projected to climb +42.5% on +13.1% higher revenues in 2021 and increase +8.9% on +6.4% higher revenues in 2022. This would follow an earnings decline of -13% on -1.7% lower revenues in 2020.The implied ‘EPS’ for the S&P 500 index, calculated using the current 2021 P/E of 23.4X and index close, as of August 31st, is $193.98, up from $136.10 in 2020. Using the same methodology, the index ‘EPS’ works out to $211.23 for 2022 (P/E of 21.5X). The multiples have been calculated using the index’s total market cap and aggregate bottom-up earnings for each year.The earnings focus lately has been on retailers and the numbers from that space are as strong and impressive as we have been seeing consistently from other sectors in the Q2 reporting cycle.Results from most of the specialty and department store operators were as strong as those from the big-box players. In fact, the earlier results from Walmart WMT, Target TGT, Home Depot HD and Lowe’s LOW provided useful read-through about the state of the consumer.The market’s varied reaction to the big-box results isn’t so much a function of the quality of the reports, but rather how these stocks had performed in the run up to the results. The state of the consumer remains strong and these retailers have refined their business models to capitalize on this favorable backdrop.The long-feared drop off in growth from these big-box operators in the post-Covid world has yet to fully materialize, though rising costs from a number of areas including inputs, freight, payroll and supply-chain disruptions cast doubts about the margins outlook. That said, these headwinds are hardly unique to the retail space, as we heard consistently from management teams across different sectors.We discussed the Retail sector’s scorecard in greater detail in the body of the report. But suffice it to say, the sector’s Q2 results have been strong, following the trends elsewhere.The Earnings Big PictureLooking past the Q2 earnings season, the expectation is for earnings growth of +26.2% on +13.7% higher revenues in 2021 Q3. Estimates for the current period (2021 Q3) have gone up, as the chart below shows.Image Source: Zacks Investment ResearchPlease note that while the Q3 estimate revisions trend remains positive, it is not as strong as we had seen in the comparable periods of the preceding two quarters. It might be nothing more than a reflection of analysts’ tentativeness about the impact of the ongoing Delta variant, but it is nevertheless something we will be closely monitoring in the days ahead. The chart below provides a big-picture view of earnings on a quarterly basis.Image Source: Zacks Investment ResearchThe chart below shows the overall earnings picture on an annual basis, with the growth momentum expected to continue.Image Source: Zacks Investment ResearchWe remain positive in our earnings outlook, as we see the full-year 2021 growth picture steadily improving, with the revisions trend accelerating in the back half of the year.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure > >Want 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 Target Corporation (TGT): Free Stock Analysis Report Walmart Inc. (WMT): Free Stock Analysis Report Lowes Companies, Inc. (LOW): Free Stock Analysis Report The Home Depot, Inc. (HD): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research