Overvalued Archives - Zxcoachoutlet

Canadian Pacific Appears Overvalued Into Earnings (NYSE:CP)

October 9, 2020

Canadian Pacific Keith Creel. Source: Globe And Mail

Canadian Pacific (CP) reports earnings Oct. 28. Analysts expect revenue of $1.4 billion and EPS of $3.23. The revenue estimate implies a Y/Y revenue decline in the mid-single-digit percentage range. Investors should focus on the following key items.

Falling Rail Traffic

In 2019 railroads faced headwinds to their top lines. The pandemic has exacerbated the situation and business activity has free fallen. For the first 39 weeks of 2020, cumulative rail traffic for Canadian railroads was down 7.7%. Last quarter, Canadian Pacific’s rail traffic fell 14% Y/Y and its average selling price (“ASP”) rose over 5%. Over half of the company’s major product segments experienced revenue declines.

On a combined basis, Grain, Energy and Intermodal represented more than 65% of total revenue. Grain revenue was up 6% on a 5% rise in carloads and 1% rise in ASP. Lower Grain volumes in

Freeport-McMoRan Stock Overvalued After Rising 3x In 6 Months

October 8, 2020

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After rising more than 3x since its March lows of this year, at the current price of $16 per share, we believe Freeport-McMoRan stock (NYSE: FCX) has reached its near-term potential. FCX stock has rallied from $5 to $16 off its recent bottom compared to the S&P 500 which increased 52% from its March lows. The stock was able to beat the broader market in the last 6 months as gold prices have shot up significantly and remained elevated during the ongoing pandemic, while copper prices, which had dropped after the outbreak of coronavirus, have also recovered at a significant pace with stimulus measures announced by various economies. However, with gold prices being volatile recently and, in fact, having declined over last few weeks, FCX stock could drop close to 10% from its current level. Our dashboard What Factors Drove -11% Change In Freeport Stock Between 2017 And Now? provides

Union Pacific Appears Overvalued Into Earnings (NYSE:UNP)

October 5, 2020

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Source: Forbes

Union Pacific (UNP) reports earnings on October 22nd. Analysts expect revenue of $4.89 billion and EPS of $1.98. The revenue estimate implies a double-digit percentage decline in revenue. Investors should focus on the following key items.

Revenue Continues To Decline

The pandemic has practically shut down business activity. Falling business activity leads to falling revenue traffic and falling revenue for Union Pacific. For the first 38 weeks of 2020, combined U.S. rail traffic (carloads and intermodal units) fell 10.9% Y/Y. That portends a decline in revenue for Union Pacific.

Last quarter, rail traffic and average selling price (“ASP”) fell 20% and 6%, respectively. Each of the company’s major product categories experienced revenue declines.

The Bulk segment included coal, grain, food, fertilizer, coal and renewables. Revenue from the segment declined 17% on a 15% decline in carloads and 2% decline in ASP. Coal was negatively impacted by lower natural

Is The Euro Overvalued? | Seeking Alpha

September 29, 2020

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There are some good reasons why the Euro is currently trading above its long-term moving averages. Divergent monetary policy between the European Central Bank (ECB) and the Federal Reserve (FED), widening 2-year and 10-year bonds yields spreads and relatively better debt situation in the EU (vs the U.S.) are usually cited as the main causes of the Euro relative strength. But how likely is EURUSD to strengthen further and move towards 1.20 as some analysts expect?

I do not think that the bullish case for EURUSD is strong enough. Range bound trading with a slight bearish bias is more likely to prevail. I see EURUSD trading in the 1.14-1.18 range over the next six months.

The Bearish Case

10-2 Yield Spread

One only needs to look at the chart below to ask an obvious question: is the Euro significantly overvalued?

Source: Bluegold Trader (website)

The chart above shows daily closing

Honeywell Is Overvalued (NYSE:HON) | Seeking Alpha

September 28, 2020

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Source: Forbes

The coronavirus pandemic led to shelter-in-place policies and practically shut down business activity. That particularly hurt the industrial businesses of Honeywell International (HON). Consumer spending declined and global travel demand fell hard, leading to a global recession. U.S. Q2 GDP fell over 30%. In Q2 Honeywell reported revenue of $7.5 billion, down 19% Y/Y. Each of the company’s key product segments experienced declines.

Aerospace revenue fell 28% Y/Y as global travel demand was in free fall. Within the Aerospace segment, commercial aviation and aftermarket sales fell 39% and 54%, respectively. Defense and space revenue actually grew 7%. Global passenger demand fell over 90% shortly after the pandemic materialized. Moody’s does not expect passenger demand to recover to pre-pandemic levels for a few years. This will likely create more headwinds for Aerospace, which was 34% of total revenue, down from 38% in the year-earlier period.

Each of the company’s

Workhorse Group Shares Are Overvalued, But Catalysts May Lift Its Stock Further

September 26, 2020

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InvestorPlace – Stock Market News, Stock Advice & Trading Tips

Investors in electric vehicle (EV) company Workhorse Group (NASDAQ:WKHS) are having a great year. So far in 2020, the stock is up over 900%, shooting past $30 per share. But that metric tells only half the story. On March 17, the shares hit a 52-week low of $1.32. $1,000 invested in the firm then would now be worth over an eye-popping $22,000.

Source: Photo from WorkHorse.com

In his Congressional Testimony on June 2019, George Crabtree, Director, Joint Center for Energy Storage Research, Argonne National Laboratory and University of Illinois at Chicago, said, “Electric vehicles are a step in the emerging transformation of transportation from exclusive reliance on personal car ownership to alternative modes of transportation, such as shared rides and mobility as a service.”

CNBC Host Jim Cramer notes that small retail investors are looking for firms, especially