Frontier soars on missing Spirit as top industrial gainer, earnings sink Upwork

Jul. 30, 2022 12:35 PM ETFrontier Group Holdings, Inc. (ULCC), UPWKSPY, XLI, SWK, WIRE, FCN, AMRC, TRU, BE, ENVX, HAYWBy: Ravikash, SA News Editor2 Comments

Airfare Prices Jump Over 18% In One Month

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The week saw Federal Reserve hiking interest rates by 0.75 percentage point for the second consecutive time to combat inflation, but the market reacted positively when Fed Chair Jerome Powell tried to strike a hawkish/dovish balance.

Meanwhile, Frontier gained on missing out an acquisition of Spirit, and earnings became the deciding factor for the decliners in this week's list.

For the week ending July 30, 10 out of the 11 sectors in the S&P 500 gained. The SPDR S&P 500 Trust ETF (SPY) was in the green for the second week in a row (+4.28%). However, YTD, the ETF is -13.26%. The Industrial Select Sector SPDR (XLI) also saw gains (+5.74%) for the second week straight. YTD, XLI is in the red -9.61%.

The top five gainers in the industrial sector (stocks with a market cap of over $2B) all gained more than +22% each this week. However, YTD, only one out of these five stocks are in the green.

Frontier Group (NASDAQ:ULCC) +30.22%. Frontier stock surged +20.50% on July 28 after JetBlue announced a deal to buy Spirit Airlines for $3.8B. A day prior to this, Spirit had terminated its merger agreement with Frontier. The same day Frontier also reported its quarterly results, which saw Q1 revenue beating analysts estimates. SA contributor Dhierin Bechai wrote that Frontier results were affected by higher than expected costs.

The SA Quant Rating on the shares is Buy, which takes into account factors such as valuation and profitability, among others things. The average Wall Street Analysts' Rating is also Buy, wherein 3 out of 6 analysts gives the stock a Strong Buy. YTD, the stock is up +6.71%, the only one among this week's top five which in the green for this period.

Encore Wire (WIRE) +26.65%. The Texas-based company's stock gained throughout the week, the most on July 26 +10.61%, the day after it reported Q2 results. The stock surged to its six-week high as revenue grew +12.6% Y/Y. The SA Quant Rating and the average Wall Street Analysts' Rating, both have a Strong Buy rating on the stock. YTD, the stock has declined -3.24%.

The chart below shows YTD price-return performance of the top five gainers and SP500:

Ameresco (AMRC) +26.06%. The Framingham, Mass.-based renewable energy solutions provider gained the most on July 28 (+10.72%) this week. However, the stock was among the worst five performers in Q2 (-44%) and YTD, has shed -29.74%. The SA Quant Rating on the stock is Hold, with Profitability having a factor grade of D and Growth with A- factor grade. The rating is in contrast to the average Wall Street Analysts' Rating of Buy, wherein 8 out of 12 analysts tag it as a Strong Buy.

Enovix (ENVX) +23.56%. The Fremont, Calif.-based lithium-ion battery maker's stock was back among the top five gainers after two months. The shares increased the most on July 29 (+12.31%), however YTD, more than 50% stock value has been wiped out (-51.17%). The SA Quant Rating on the stock is Hold, with Profitability having a factor grade of D- and Valuation with an F factor grade. However, the average Wall Street Analysts' Rating differs and gives the stock a Strong Buy rating, with an Average Price Target of $24.75.

Bloom Energy (BE) +22.46%. The San Jose, Calif.-based company, which provides power generation platform, soared among solar and green energy stocks after Senator Joe Manchin and Majority Leader Chuck Schumer announced a surprise deal that includes $369B for "energy and climate change." The average Wall Street Analysts' Rating on BE is Buy, contradicting an SA Quant Rating of Hold. YTD, the stock has declined -7.75%.

This week's top five decliners among industrial stocks (market cap of over $2B) all lost more than -10% each. YTD, four out of these five stocks are in the red.

Upwork (NASDAQ:UPWK) -17.95%. The Santa Clara, Calif.-based company, which provides an online work marketplace, saw its stock plunge on July 28 (-16.68%) a day after its Q2 despite Q2 beat on ambiguous outlook. The stock was among the top five decliners two weeks ago but was among the best 5 gainers (in this segment) for June.

The SA Quant Rating on the stock is Hold, with Profitability having a factor grade of D+ while Valuation having a factor grade of F. The rating is in contrast to the average Wall Street Analysts' Rating of Buy, wherein 4 out of 11 analysts give it a Strong Buy rating. YTD, UPWK had declined -45.67%.

Stanley Black & Decker (SWK) -15.88%. SWK fell after Q2 results missed analysts expectations, and the New Britain, Conn.-based company cut its FY22 outlook and announced implementation of a cost reduction program aimed at saving $1B by year-end 2023. YTD, the stock has fallen -48.40%.

The SA Quant Rating on the stock is Sell, with Profitability having a factor grade of D+ and Momentum having a D- factor grade. The average Wall Street Analysts' Rating differs and tag it as Buy, wherein 6 out of 19 analysts give the stock a Strong Buy rating.

The chart below shows YTD price-return performance of the worst five decliners and XLI:

Hayward (HAYW) -13.81%. The Berkeley Heights, N.J.-based pool equipment maker was in the decliners' list for the second week in a row. HAYW slumped after Q2 revenue and GAAP EPS missed analysts' estimates. YTD, the stock has shed -55.51%, the most among this week's worst five. The average Wall Street Analysts' Rating is Buy, which is in contrast to the SA Quant Rating of Hold.

TransUnion (TRU) -10.43%. The Chicago-based company's stock too was hit by disappointing quarterly results. Q2 revenue came below analysts' expectations and TransUnion guided its Q3 and FY22 outlook below consensus. The company, which provides risk and information solutions, also saw a downgrade at BofA Securities on similar concerns. YTD the stock has declined -33.18%. The SA Quant Rating on TRU is Hold, differing with the average Wall Street Analysts' Rating of Buy.

FTI Consulting (FCN) -10.16%. The stock shed -9.05% on July 28 after Q2 adjusted EPS missed estimates, despite revenue beating expectations. However, YTD, the stock has gained +6.61%, the only one among this week's decliners to be in the green for this period. The Washington, D.C.-based company was the best performing industrial stock (in this segment) in Q2. The average Wall Street Analysts' Rating is Strong Buy, while the SA Quant Rating is Buy.

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