Chicago, IL – May 9, 2025 – Zacks Equity Research shares Mitsubishi UFJ Financial Group MUFG as the Bull of the Day and Vera Bradley VRA as the Bear of the Day. In addition, Zacks Equity Research provides analysis on The Home Depot Inc. HD, Lowe's Companies Inc. LOW and Williams-Sonoma WSM.
Here is a synopsis of all five stocks:
While equity markets have rebounded from last month's tariff-driven volatility, global investors appear to be gradually rotating into non-dollar denominated assets. Alongside leading international markets like Japan, financial stocks, particularly global institutions, are attracting renewed attention.
Mitsubishi UFJ Financial Group stands out as both the largest financial institution in Japan and one of the largest banking groups in the world. With over $3 trillion in assets and operations across more than 50 countries, MUFG provides a full spectrum of financial services, including commercial and trust banking, asset management, and securities trading, to retail and institutional clients alike.
Beyond benefiting from capital flows into international equities and global financials, MUFG also boasts a top Zacks Rank, reasonable valuation, and notable relative strength, all pointing to growing investor interest. While it may not be the most disruptive or fastest-growing stock in the market, Mitsubishi UFJ offers something increasingly valuable in today's environment: steady, low-volatility returns in an uncertain world.
At Berkshire Hathaway's 2025 annual meeting, Warren Buffett reiterated his enthusiasm for Japanese equities, stating he plans to hold shares in Japan's five major trading houses, including Mitsubishi Financial, for "50 years or more." He praised the strong returns these investments have delivered over the past several years and emphasized Berkshire has no intention of selling.
Buffett noted the appealing differences in culture and corporate governance between Japanese and US firms, which he believes enhance long-term value.
For investors looking to follow a similar path, Mitsubishi UFJ Financial Group offers an accessible, high-quality entry point into Japan's financial sector. As Japan's largest bank, MUFG shares many of the same characteristics Buffett finds attractive: stability, global reach, and long-term earnings potential, all at a reasonable valuation.
Mitsubishi UFJ Financial Group continues to show impressive earnings momentum, backed by upward-trending estimate revisions and solid long-term growth expectations. Analysts have raised their earnings forecasts by 10.1% for the current year and 7.3% for next year, helping to earn MUFG a Zacks Rank #1 (Strong Buy) rating.
Looking ahead, the company is expected to grow earnings at a 13.2% annual rate over the next three to five years. Despite this growth outlook, the stock trades at a modest 10.5x forward earnings, just above its 10-year median and in line with industry averages.
Given the current global focus on diversifying away from US-centric assets and the renewed investor interest in Japanese equities, MUFG may warrant a re-rating to a more premium multiple over time.
With its combination of earnings strength and an attractive valuation, MUFG's PEG ratio stands at just 0.8, suggesting the stock remains undervalued relative to its growth potential—a compelling setup for value-oriented investors seeking international exposure.
For investors seeking stability, global diversification, and value, Mitsubishi Financial Group checks all the boxes. With strong earnings momentum, a top Zacks Rank, and exposure to a resurgent Japanese equity market, MUFG offers a rare mix of reliability and upside.
It may not be flashy, but in a world increasingly defined by uncertainty, MUFG stands out as a smart, steady addition to any globally and long-term minded portfolio.
Today's Bear of the Day brings us back to one of the toughest corners of the market: apparel. In an industry known for fierce competition, shifting consumer preferences and relentless margin pressure, brands come and go like fashion trends.
Vera Bradley, a widely recognized name in handbags and accessories, has struggled to keep pace with the evolving retail landscape. The company has faced a severe drop in sales growth over the last several years as new brands better suited to the modern industry emerge. Those challenges are now reflected in its Zacks Rank #5 (Strong Sell), driven by a wave of downward earnings estimate revisions.
The broader apparel industry has been a laggard over the last decade, falling 31% over that period. But Vera Bradley's performance has been even more severe: the stock is down a staggering 85.2% in the last 10 years and has already shed more than 50% year-to-date. With continued fundamental deterioration and limited near-term catalysts, VRA is a stock investors should avoid until a material turnaround.
Vera Bradley's fundamental outlook has deteriorated sharply, with the company facing a severe contraction in both revenue and earnings expectations. Over the past year, sales have declined 21%, falling back to levels not seen since 2011, effectively erasing more than a decade of growth.
Unfortunately, the outlook continues to worsen. Sales are projected to decline another 24.6% this fiscal year, signaling continued challenges and weakening consumer demand. These pressures are clearly reflected in the company's earnings forecast. Since the summer of 2024, earnings estimates have been steadily trending lower, continuing a broader downtrend that began in 2021.
In just the past two months, next quarter's earnings estimate has plunged 95%, while expectations for next year have dropped 62%. This steep downward revision trend has pushed Vera Bradley to a Zacks Rank #5 (Strong Sell), indicating serious caution for investors.
With declining sales, collapsing earnings expectations, and no clear catalysts for a turnaround, Vera Bradley remains firmly out of favor. The company is losing relevance in a rapidly evolving retail environment, and the steady deterioration in estimates suggests that Wall Street expects the pain to continue.
Until signs of stabilization emerge, either through a strategic pivot, renewed consumer interest, or improved financial performance, VRA is a stock best left on the sidelines. For now, the combination of weak fundamentals and a Zacks Rank #5 (Strong Sell) makes it one of the more cautionary stories in the market.
The Home Depot Inc. stock has lost 12.3% in the past three months, marking an outperformance from the broader industry's 14.7% fall. However, it has underperformed the Retail-Wholesale sector and the S&P 500's declines of 10.5% and 7.9%, respectively.
Despite the dip, the HD stock performance is better than its industry peers likeLowe's Companies Inc. and Williams-Sonoma, which have lost 12.9% and 24.7%, respectively, in the past three months.
At the current price of $362.75, the HD stock trades at a discount of 17.4% to its 52-week high of $439.37. The current stock price reflects a 12% premium from its 52-week-low mark.
HD trades above its 200-day moving averages, signaling strong upward momentum and price stability. This technical strength indicates positive market sentiment and confidence in the company's financial health and prospects.
Home Depot's stock performance shows mixed sentiments based on its comparisons to industry, sector and the market as a whole, as well as its historical benchmarks. Let us find out how we should play the stock.
While HD's recent price decline may raise concerns among investors, its ongoing strategic initiatives continue to draw favorable sentiment. That said, evaluating whether the stock is a smart buy at current levels requires a closer look at both its growth levers and operational pressures.
Home Depot has delivered consistent growth by capitalizing on its leadership in the home improvement space and executing its "One Home Depot" strategy. This plan emphasizes investments in technology, supply-chain modernization and digital transformation. The company's ability to cater to both DIY customers and professional contractors has been instrumental in maintaining customer loyalty and broadening its market appeal.
With a vast store network, a comprehensive product offering and a growing online presence, HD is well-positioned to meet evolving consumer demands. Its interconnected retail model and strong tech infrastructure have driven web traffic and supported the buildout of a scalable Pro ecosystem, solidifying its competitive advantage.
However, the company continues to grapple with ongoing challenges, including softened demand and pressure in high-ticket discretionary categories, factors that have impacted both total and comparable sales. For fiscal 2025, Home Depot projects a 2.8% year-over-year increase in sales, suggesting a slowdown from the 4.5% growth reported in fiscal 2024. Comparable sales are expected to rise just 1%, while the gross margin is forecast to remain flat at 33.4%. The operating margin is projected at 13%, with an adjusted figure of 13.4% — both slightly lower than the prior year.
Macroeconomic pressures are also weighing on profitability. Elevated interest rates, which surged in early 2024, continue to impact consumer behavior and financing costs. The company expects net interest expenses to increase to $2.2 billion in fiscal 2025 from the $2.1 billion reported in the prior year.
As a result, Home Depot anticipates a 3% decline in GAAP earnings per share and a 2% year-over-year fall in adjusted EPS. Despite these near-term headwinds, the company remains committed to its long-term growth strategy, reinforcing its dominant position in the home improvement sector.
Home Depot's estimates for fiscal 2025 have shown an uptrend in the past seven days. The Zacks Consensus Estimate for HD's fiscal 2025 earnings per share rose 0.2% in the last seven days. The upward revision in earnings estimates indicates that analysts have continued faith in the company's growth potential. For fiscal 2026, the Zacks Consensus Estimate for earnings per share was unchanged in the last 30 days. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
For fiscal 2025, the Zacks Consensus Estimate for HD's sales implies 2.7% year-over-year growth, while that for earnings per share suggests a decline of 1.5%. The consensus mark for fiscal 2026 sales and earnings indicates 4.5% and 9.9% year-over-year growth, respectively.
While the HD stock lost some steam in the past three months, the company is currently trading at a forward 12-month P/E multiple of 23.56X, exceeding the industry average of 20.55X and the S&P 500's average of 20.65X. At current levels, Home Depot's stock valuation looks expensive.
At 23.56X forward 12-month P/E, HD is trading at a valuation much higher than its competitors. Its competitors, such as Lowe's, Williams-Sonoma and Haverty Furniture, are trading at more reasonable multiples. Lowe's, Williams-Sonoma and Haverty Furniture have forward 12-month P/E ratios of 17.79X, 18.28X and 11.11X — all lower than Home Depot. At such levels, HD's stock valuation seems out of step with its growth trajectory.
The premium valuation indicates that investors have high expectations for HD's performance and growth potential. However, the valuation premium may not be justified if the company fails to deliver on its long-term growth targets. Investors may be skeptical about buying the stock at these premium levels and may wait for a better entry point.
Home Depot stock's downward trajectory, premium valuation and its cautious outlook raise valid concerns for investors. While HD's earnings guidance is disappointing, growth initiatives like the "One Home Depot" plan and strong Pro customer sales position it well for the long term.
However, caution is warranted, given the prevailing headwinds, which call for a thorough evaluation of recent developments before making investment decisions. As it stands, with a Zacks Rank #4 (Sell), Home Depot remains a stock to avoid until clearer recovery indicators emerge.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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Lowe's Companies, Inc. (LOW) : Free Stock Analysis Report
The Home Depot, Inc. (HD) : Free Stock Analysis Report
Williams-Sonoma, Inc. (WSM) : Free Stock Analysis Report
Vera Bradley, Inc. (VRA) : Free Stock Analysis Report
Mitsubishi UFJ Financial Group, Inc. (MUFG) : Free Stock Analysis Report
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