Track market-moving stories before they get noisy

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McDonald’s (NYSE:MCD | MCD Price Prediction) is dominating restaurant-sector headlines after a Q1 beat that pushed global comparable sales back to +3.8% and validated CEO Chris Kempczinski’s value-menu reset.

But here’s what you should actually be watching.

The Hot Trade Is Already Cooling The pullback has already started. Shares are down more than 10% in the past month and nearly as much year to date. The bull thesis, durable value leadership in a tough consumer environment, depends on three things that do not hold up.

First, the headline growth was flattered by currency. Q1 revenue of $6.52 billion (+9.4% YoY) included a $313 million favorable FX tailwind from a stronger Euro. Strip that out and the company looks like what it actually is: a low-single-digit grower. FY2025 revenue rose just 3.72%.

Second, the balance sheet is not what a retirement investor assumes. Shareholders’ equity sits at -$1.791 billion, a deficit produced by years of debt-funded buybacks. Interest expense is guided to rise 4-6% in 2026, even as management commits to $3.70 to $3.90 billion in capex and roughly 2,600 new restaurants.

Third, the value-menu pivot that revived U.S. traffic is exquisitely sensitive to gas prices. The McDonald’s customer drives to the drive-thru, and rising fuel costs eat directly into the spare change that fills the $5 Meal Deal lane. Management has already flagged tariffs and commodity price volatility as risks. A 23x trailing P/E for a 3-4% organic grower with negative equity prices in a crowded defensive trade rerating in slow motion.

The Redirect: Texas Roadhouse Move your attention to Texas Roadhouse (NASDAQ:TXRH), up 11.05% YTD and 17.74% in the past week alone after its Q1 report. Three reasons it deserves the seat McDonald’s is being asked to give up.

1. Comp sales nearly double McDonald’s. Q1 comparable restaurant sales grew 7.1%, and the first five weeks of Q2 are already tracking +6.5%. Average weekly sales climbed to $174,151 from $163,071. Traffic is driving the gains; the menu price increase was a modest 1.9% implemented in April.

2. Real unit growth backed by operations. The system stands at 822 restaurants with seven company stores opened YTD, 22 under construction, and five franchise acquisitions for $71.8 million in Q1. McDonald’s is opening stores into a market it already saturated.

3. A clean balance sheet funding rising returns. Book value sits at $22.15 per share, positive and growing. The board just raised the quarterly dividend to $0.75, payable June 30, 2026, on top of $150 million in FY2025 buybacks. CEO Jerry Morgan said it plainly: “Our strong traffic trends continue to fuel sales growth.”

Even Nike (NYSE:NKE), the other consumer-discretionary redemption story analysts are pushing, is down 33.02% YTD with net income falling 35% last quarter. Texas Roadhouse is already working, no “middle innings” explanation required.

The takeaway: On the current data, Texas Roadhouse screens as the stronger fundamental story heading into the next quarter, while McDonald’s valuation reflects a defensive trade that is already unwinding.

Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.

The earnings figure itself is key, of course, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb and vice versa.

Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.

The Zacks Earnings ESP, ExplainedThe Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.

The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.

Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 28.3% annual returns on average, according to our 10 year backtest.

Stocks with a #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, or the top 15% and top 5% of stocks, respectively, should outperform the market. Strong Buy stocks should outperform more than any other rank.

Should You Consider Ross Stores?The final step today is to look at a stock that meets our ESP qualifications. Ross Stores (ROST - Free Report) earns a #3 (Hold) six days from its next quarterly earnings release on May 21, 2026, and its Most Accurate Estimate comes in at $1.73 a share.

By taking the percentage difference between the $1.73 Most Accurate Estimate and the $1.66 Zacks Consensus Estimate, Ross Stores has an Earnings ESP of +4.17%. Investors should also know that ROST is one of a large group of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

ROST is part of a big group of Retail and Wholesale stocks that boast a positive ESP, and investors may want to take a look at Texas Roadhouse (TXRH - Free Report) as well.

Texas Roadhouse, which is readying to report earnings on August 6, 2026, sits at a Zacks Rank #3 (Hold) right now. Its Most Accurate Estimate is currently $1.87 a share, and TXRH is 83 days out from its next earnings report.

For Texas Roadhouse, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.84 is +1.74%.

ROST and TXRH's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.

Find Stocks to Buy or Sell Before They're ReportedUse the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>

Determining the right investment in the restaurant world often comes down to choosing between value and growth. Investors are currently weighing Bloomin' Brands (BLMN +8.77%) against Texas Roadhouse (TXRH +2.15%) to see which fits better.

While both companies operate in the casual dining space, their financial health and expansion strategies differ significantly. One relies on a multi-brand approach while the other focuses on a dominant, high-traffic core concept.

The case for Bloomin' BrandsBloomin' Brands operates a multi-concept strategy centered on its flagship brand, Outback Steakhouse, alongside Carrabba's Italian Grill, Bonefish Grill, and Fleming Prime Steakhouse. This variety allows the company to capture different consumer preferences within the retail stocks space. The company serves guests across more than 1,450 locations globally.

In FY 2025, the company reported revenue of nearly $4 billion, representing about an 11% decline from the prior year. Net income for the period was approximately $96 million, also a drop from 2024.

As of its December 2025 balance sheet, the debt-to-equity ratio was roughly 9.2x. This ratio measures total debt against shareholder equity, and a high figure suggests the company relies heavily on debt.

The case for Texas RoadhouseTexas Roadhouse focuses on a high-volume, dinner-only model (though lunch is offered on weekends) that prioritizes speed and guest turnover. The company manages a system of more than 820 restaurants, including its secondary concepts, Bubba’s 33 and Jaggers. By keeping its menu focused and its atmosphere energetic, the chain maintains high average unit volumes.

For FY 2025, the company generated revenue of approximately $5.9 billion, a notable 9.4% increase over the prior year. Net income reached $405.6 million, demonstrating the company’s strong ability to convert sales into profit.

Based on the December 2025 balance sheet, the company carries a debt-to-equity ratio of roughly 1.3x. This suggests a more conservative balance between debt and equity compared to many peers.

Risk profile comparisonBloomin' Brands faces significant pressure from intense competition in the casual dining sector from rivals like Darden Restaurants (DRI +3.54%) and Brinker International NYSE:EAT). The company is particularly sensitive to beef price volatility. Any disruption in this supply chain or a spike in costs could weigh heavily on its narrow net margin.

Texas Roadhouse is highly geographically concentrated, with approximately 21% of its corporate-owned locations in Texas and Florida. This makes the company vulnerable to regional economic downturns or natural disasters in those specific states. Additionally, the company faces rising commodity costs and must compete for labor in a tight market against other large operators like Darden Restaurants.

Valuation comparisonBloomin' Brands appears to be a deep-value play, trading at much lower multiples, whereas Texas Roadhouse trades at a significant premium due to its superior profitability.

MetricBloomin' BrandsTexas RoadhouseSector BenchmarkForward P/E8.6x26.0x29.5xP/S ratio0.2x1.9xSector benchmark uses the SPDR XLY sector ETF.
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

Which stock would I buy in 2026?In the current ‘K-shaped’ economic environment in the U.S., in which the wealthy continue to see their situation improve but the average consumer is feeling squeezed, affordable dining options are a good place to hunt for restaurant investments.

Texas Roadhouse’s locations are overwight to Texas and Florida, the latter state of which is particularly sensitive to consumer cutbacks in spending during tight economic times. While the U.S. economy continues to grow, consumers remain wary of increasing spending. The company reported labor and food cost inflation that outpaced the growth in foot traffic. That suggests some weakness for the chain.

Bloomin’ Brands, meanwhile, centers around its widely recognized Outback Steakhouse franchise. While the first quarter was weaker than anticipated, the brand trust scores around Outback have been rising, suggesting that management’s plan to reinvigorate the chain through location refurbishments and aggressive loyalty program offerings shows promise. Management is also focusing on paying down debt to put the business on a stronger financial footing for the long run. There’s no denying that the current year promises to be flat to up slightly for Bloomin’s same-store sales, but it appears there is a plan to get the chain going again.

Investing in Bloomin’ Brands isn’t a slam dunk — its low 8.6 times forward price-to-earnings ratio compared to the sector’s 29.5 P/E suggests a lot of skepticism on the stock. But with consumers continuing to signal that they are seeking out value, Bloomin’s value offerings and strong brand suggest this may be a good buy-low opportunity.

5 Stocks Using Buybacks to Drive Serious Upside Into 2026Abercrombie & Fitch NYSE: ANF reported record first-quarter fiscal 2026 net sales and maintained its full-year outlook, even as geopolitical pressure in the Middle East and parts of Europe weighed on results in the EMEA region.

Chief Executive Officer Fran Horowitz said the company delivered its 14th consecutive quarter of net sales growth, with first-quarter sales reaching $1.1 billion, up 2% from a year earlier. Operating margin was 8%, above the company’s plan, while diluted earnings per share came in at $1.47, also above the company’s expected range.

Get Abercrombie & Fitch alerts:

Why the American Eagle Stock Rally Isn't Just Speculation “One quarter in, the team continues to stay agile in a dynamic global environment,” Horowitz said. She added that 2026 is “shaping up to be another year of consistent progress” as the company maintained its outlook for net sales, operating margin and earnings per share.

EMEA Weakness Offsets Growth in Americas and APAC By region, first-quarter net sales rose 3% in the Americas and 24% in APAC, while EMEA sales declined 10%. Chief Financial Officer Robert Ball said EMEA demand was “directly impacted” as conflict in the Middle East ramped up, reducing total company net sales growth by more than 50 basis points relative to the company’s prior outlook.

Buffett’s $150B Bond Move: What It Really Means for InvestorsComparable sales declined 1% overall. Americas comparable sales rose 1%, APAC comparable sales increased 15%, and EMEA comparable sales fell 11%.

Horowitz said continued growth in the U.K. was more than offset by declines in the Middle East and other European markets. She said the company has responded by controlling receipts and adjusting promotions to match demand trends.

Ball said the company expects “more of the same” from the Middle East impact as it moves through the balance of the season. He said management is adjusting inventory and aligning promotions in the region while staying close to demand trends.

Abercrombie Brands Grow, Hollister Flat Against Prior-Year Record Abercrombie brands posted net sales growth of 3% on flat comparable sales. Horowitz said the business saw positive average unit retail, or AUR, supported by customer response to spring assortments, with fleece, denim and wovens performing well in the Americas and U.K.

Hollister brands were flat compared with last year’s first-quarter record, with comparable sales down 2%. Horowitz said Hollister grew in the Americas and APAC, but those gains were offset by Middle East and European demand pressure. She cited graphic tees, shorts, swim and other warm-weather categories as areas of strength as the brand transitioned into spring.

During the question-and-answer session, Horowitz said both brands remain healthy and that the company is not seeing changes in performance across customer cohorts. “They’re showing up,” she said of consumers. “We’re positioned well with two healthy brands.”

Executives also highlighted brand collaborations. Abercrombie recently partnered with Sperry on footwear and apparel, a launch Horowitz said exceeded internal expectations and generated higher-than-average conversion. Hollister partnered with Kappa on a collection tied to international football ahead of the World Cup.

Tariffs, Freight and Investments Shape Margin Outlook Operating income was $89 million in the quarter, compared with $102 million a year earlier. Ball said the 130-basis-point decline in operating margin was primarily due to 90 basis points of increased marketing investment and about 90 basis points of ERP implementation costs. These were partially offset by AUR and foreign currency benefits to gross margin.

Tariff pressure totaled 180 basis points year over year in the first quarter, but Ball said it was fully offset by favorable freight costs. Tariff expense was lower than anticipated due to the timing and level of tariff rates in the quarter.

For fiscal 2026, the company now assumes a 15% tariff on all global imports into the U.S. effective for the second half of the year, along with a 10% effective tariff rate for the second quarter. Ball said those assumptions translate to about 20 basis points of full-year gross margin pressure, improved from the 70 basis points assumed in March. He said the benefit is expected to be offset by elevated freight costs and continued investments in marketing and stores.

The company has applied for about $100 million in IEEPA tariff refunds but has not included any benefit from those applications in its outlook.

Full-Year Guidance Maintained Abercrombie & Fitch maintained its full-year outlook for net sales growth of 3% to 5% from fiscal 2025 sales of $5.27 billion. The company expects growth across brands, growth in the Americas, and EMEA sales slightly below 2025 levels given current trends in the Middle East and parts of Europe.

Management continues to expect full-year operating margin of 12% to 12.5%, a tax rate around 30%, and diluted earnings per share of $10.20 to $11. The company expects capital expenditures of about $225 million.

For the second quarter, the company expects net sales to rise 2% to 4% from $1.2 billion a year earlier. It forecast operating margin of about 10%, including roughly $20 million, or about 120 basis points, of unfavorable tariff impact net of mitigation efforts. Second-quarter diluted earnings per share are expected to range from $1.80 to $2.

Ball said the company expects to deliver about 130 new store experiences this year, including 50 new stores and 80 remodels and right-sizes. It expects to close about 20 stores, making it a net store opener for the year.

ERP Upgrade Complete, Share Repurchases Continue The company completed the implementation of its upgraded merchandising ERP system in March. Ball said the company proactively limited certain third-party orders during the implementation, reducing top-line growth by about 100 basis points in the first quarter. Normal operations resumed in April.

Horowitz said the ERP upgrade should support long-term channel and category expansion and help the company onboard global partners, channels and geographies. She also said the company is testing ways to use artificial intelligence across areas including customer care, forecasting, inventory and customer experience.

Abercrombie & Fitch ended the quarter with $594 million in cash and cash equivalents, about $1 billion in liquidity and $25 million in marketable securities. Inventory at cost declined 2%, while inventory units were up low single digits.

The company repurchased $105 million of shares during the quarter, equal to 3% of shares outstanding at the beginning of the year. It ended the quarter with $745 million remaining under its current share repurchase authorization and continues to expect about $450 million in share repurchases for fiscal 2026.

About Abercrombie & Fitch NYSE: ANFAbercrombie & Fitch Co NYSE: ANF is an American specialty retailer that designs, markets and sells casual apparel and accessories for men, women and children. Founded in 1892 by David T. Abercrombie and Ezra Fitch, the company evolved from an outdoor gear outfitter to a global lifestyle brand renowned for its relaxed, preppy aesthetic. Its product assortment includes tops, bottoms, outerwear, intimates, swimwear, fragrances and personal care items.

The company operates under multiple brand names, including Abercrombie & Fitch, Abercrombie Kids, Hollister and Gilly Hicks, each targeting distinct consumer segments from teens to young adults.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

Should You Invest $1,000 in Abercrombie & Fitch Right Now?Before you consider Abercrombie & Fitch, you'll want to hear this.

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Abercrombie & Fitch Co. (NYSE:ANF) shares jumped 11.1% to trade at $83.20 this morning, the retailer brushing off a profit decline with stronger-than-expected earnings. Abercrombie did admit that the Middle East conflict hindered consumer demand and issued a weak current-quarter outlook, likely keeping gains in check.

Today's pop triggered a breakout past the $80 level which kept a tight lid on early-May gains. The equity is down 33% for 2026, but still poised to mark its sixth win out of the last seven. There's potential for more upside though, per ANF's 14-Day Relative Strength Index (RSI), last spotted at 36 and near "oversold" territory.

Plus, the equity has outperformed options traders' volatility expectations over the last 12 months, per its Schaeffer's Volatility Scorecard (SVS) of 92 out of 100.

The retailer is gaining attention in the options pits, with 5,000 calls and 3,000 puts across the tape so far, which is seven times the amount typically seen at this point. Drawing the most attention is the weekly 5/29 75-strike put, with openings at the weekly 6/5 90-strike call. 

Abercrombie & Fitch ANF saw a notable increase of 13% in its stock price following a strong Q1 earnings report that exceeded expectations. The company also reaffirmed its full-year outlook, easing investor worries about slowing momentum and geopolitical challenges in the EMEA region. Although the Q2 earnings per share (EPS) guidance was somewhat conservative, the overall sentiment from the report was more positive than anticipated given ongoing regional disruptions and decreasing comparable sales trends.

Q1 revenue rose 1.5% year-over-year to a record $1.11 billion, aligning with forecasts, while earnings surpassed consensus estimates. This was largely due to effective merchandise margin management and careful expense control, which helped mitigate weaker traffic in certain international markets. Revenue from the Americas, ANF's largest market, grew by 3%. Both Abercrombie and Hollister experienced robust store and digital traffic, indicating that the core U.S. consumer remains resilient amid broader discretionary spending challenges. EMEA sales fell by 10%, as strong performance in the UK was overshadowed by declines in the Middle East and other European markets due to escalating regional conflicts. Management is responding by carefully managing inventory and adjusting promotions to protect margins and inventory health. Meanwhile, APAC revenue surged by 24%, though it still constitutes a small portion of total sales, having a limited effect on overall growth. Comparable sales (comps) dipped by 1%, reflecting a continued slight slowdown from previous quarters. Hollister's comps decreased by 2%, trailing behind Abercrombie, which had been the primary growth driver in recent times, possibly indicating a moderation in demand for teen apparel. The company also pointed out long-term growth prospects in new categories like Abercrombie Baby & Toddler, along with plans to expand franchise, wholesale, and licensing partnerships. While Abercrombie & Fitch's results were not without flaws, they were better than expected, especially amid concerns regarding slowing comps and increased pressure in EMEA. A significant positive was the management's reaffirmation of full-year guidance, contrasting with the cautious outlooks from other apparel brands such as American Eagle Outfitters AEO and Gap GAP . Investors were also reassured by ANF's commitment to maintaining pricing discipline, avoiding aggressive promotions despite weaker international demand. However, the decline in comps warrants close observation, particularly as Hollister has lost some momentum after previously driving growth. ANF continues to outperform many mall-based apparel competitors, but maintaining premium valuation multiples may depend on demonstrating top-line growth once geopolitical issues and consumer spending pressures stabilize.

This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].

Abercrombie & Fitch (NYSE:ANF) shares rose about 12% after the company reported first-quarter results that beat profit expectations, while revenue slightly missed and comparable sales declined.

For the quarter ended May 2, the company posted adjusted earnings of $1.47 per share, above analyst expectations of $1.28.

Net sales rose 2% year over year to $1.11 billion, narrowly missing consensus estimates of $1.12 billion.

Comparable sales fell 1%, compared with expectations for flat performance.

The company’s 14th consecutive quarter of revenue growth was driven by a 3% increase in the Americas and a 24% jump in APAC, while EMEA declined 10%.

Abercrombie brand sales rose 3%, while Hollister was flat.

Looking ahead, the company maintained its full-year outlook, expecting net sales growth of 3% to 5% and net income per diluted share of $10.20 to $11. It also reiterated plans for approximately $450 million in share repurchases for the year.

For the second quarter, Abercrombie & Fitch forecast net sales growth of 2% to 4% and earnings per share of $1.80 to $2, alongside at least $150 million in buybacks.

“With our customer at the center of everything we do and a strong foundation in place, we remain on offense across product and marketing and are confident in our path to deliver full-year net sales growth across brands, double-digit operating margins, strong cash flow and earnings per share growth to create long-term value for shareholders,” Abercrombie CEO Fran Horowitz said in a statement.

Jefferies analysts wrote that the total company results came in better than feared, with comparable sales performance slightly ahead of expectations and Abercrombie-branded comps notably more resilient than anticipated, coming in flat versus expectations for a decline. The firm believes that this suggests underlying brand strength is holding up better than the Street had modeled, even as overall comps remained negative.

On regional performance, Jefferies highlighted continued strength in the Americas and APAC offset by a sharper downturn in EMEA, which it attributed to a tougher geopolitical and demand backdrop. It flagged EMEA as a key ongoing pressure point for the growth mix.

On margins, Jefferies noted that both operating margin and EPS exceeded the company’s prior outlook, despite softer revenue and concerns around promotions.

The firm said the result points to continued discipline on costs and a favorable brand mix effect supporting profitability.

Shares of Abercrombie & Fitch ANF rose sharply on Wednesday after the retailer reported better-than-expected fiscal first-quarter earnings, helping ease investor concerns despite weaker comparable sales and softer second-quarter guidance.

Abercrombie stock climbed more than 12% in the trading session.

The rally came after shares had fallen roughly 41% this year following disappointing holiday sales and a weaker fiscal-year outlook earlier in 2026.

The company reported adjusted earnings of $1.47 per share for the quarter ended May 2, ahead of analyst estimates of $1.28 per share, according to FactSet.

However, profit declined from $1.59 per share reported during the same period last year.

Net sales rose 1.5% year over year to $1.11 billion, slightly below Wall Street expectations of $1.12 billion.

Comparable sales declined 1% during the quarter, reflecting flat sales at the Abercrombie brand and a 2% decline at Hollister.

Analysts had expected comparable sales growth of 0.3%.

Company executives said demand trends varied significantly across geographic regions during the quarter.

Chief Executive Fran Horowitz said the company continued seeing strength across the Americas and Asia-Pacific markets, while demand weakened across Europe, the Middle East, and Africa amid escalating geopolitical tensions.

“We are proactively managing inventory and marketing to support the region,” Horowitz said, adding that Abercrombie is also continuing to invest in stores to strengthen its brands and customer experiences.

The retailer maintained its full-year outlook, projecting net sales growth of 3% to 5% and annual earnings between $10.20 and $11 per share.

Wall Street currently expects earnings of approximately $10.68 per share alongside sales growth of about 3.8%.

Second-quarter guidance, however, disappointed investors and analysts.

Abercrombie forecast second-quarter earnings between $1.80 and $2 per share, well below analyst expectations of $2.54 per share.

The company also guided for second-quarter sales growth of 2% to 4%, roughly in line with expectations.

Margin concerns remain a key focusDespite the earnings beat, analysts continued highlighting concerns around profitability trends and margin sustainability.

William Blair maintained a Market Perform rating following the report.

“The story to us remains on the margin line, where we continue to see signs of fragility,” analyst Dylan Carden wrote. “We maintain that the largest risk here is worsening profitability.”

The company also updated investors on the expected impact of tariffs and freight costs.

Chief Financial Officer Robert Ball said first-quarter tariff-related expenses came in lower than expected due to the timing and level of tariff rates during the quarter.

Ball said updated assumptions now imply approximately 20 basis points of gross margin pressure for the full year, an improvement from the 70 basis points projected in the company’s March outlook.

“However, we expect that relief to be offset by elevated freight costs and continued investments in marketing and stores,” Ball said during the earnings call.

Abercrombie maintained its full-year operating margin outlook in a range of 12% to 12.5%.

William Blair noted that while the first-quarter sales miss was modest and market reaction appeared “better-than-feared,” they remained cautious regarding management’s expectations for stronger sales and margin performance during the second half of the year.

The firm said they would remain cautious on the back-half outlook “given the similar set-up to last year, when management continued to walk down profitability expectations throughout the year.”

Key Takeaways ANF posted record Q1 FY26 sales of $1.11B, up 1.5%, marking 14 straight growth quarters.APAC sales jumped 24% and comps 15%, while EMEA fell 10% as the Middle East conflict hit demand.Operating income fell 18.5% as costs rose; ANF kept FY26 targets and repurchased $105M of shares. Abercrombie & Fitch Co. (ANF - Free Report) posted first-quarter fiscal 2026 results, wherein the top line lagged the Zacks Consensus Estimate while the bottom line surpassed the same. Meanwhile, the company’s sales increased year over year, earnings fell. Abercrombie’s earnings per share (EPS) of $1.47 in the fiscal first quarter fell 7.5% from the year-ago quarter. However, the bottom line beat the Zacks Consensus Estimate of $1.26 per share.

Net sales rose 2% year over year to $1.11 billion but came below the Zacks Consensus Estimate of $1.12 billion. The quarter marked 14th straight quarter of sales growth. Results were driven by higher sales in the Americas and a sharp acceleration in APAC, partially offset by weaker demand in EMEA. Comparable sales dipped 1% on a constant-currency basis, reflecting a softer regional mix despite continued growth in key markets.

Americas net sales increased 3% year over year to $899.9 million, supported by 1% comparable-sales growth.  APAC was the standout in growth rate, with net sales up 24% to $46.5 million and comparable sales up 15%. In contrast, EMEA net sales declined 10% to $167.4 million and comparable sales fell 11%, which management tied to softer demand as the Middle East conflict ramped up, particularly impacting the Hollister brands in the region. Our model expects revenues growth of 3.3% in Americas and 3.9% in EMEA but down 7.6% in APAC.

ANF's shares have increased more than 10% following the company's quarterly results. This Zacks Rank #4 (Sell) stock has lost 14.7% in the past three months compared with the industry's 9.1% drop.

Abercrombie Brands’ PerformanceBy brand, Abercrombie net sales rose 3% to $564.7 million, while Hollister net sales were essentially flat at $549.1 million. Our model predicted sales growth of 2.1% for the Abercrombie brand and 4% for Hollister.

The brand split underscores that the company’s growth in the quarter was concentrated in Abercrombie, while Hollister held revenues steady but faced pressure in comparable sales. Comparable sales were flat for Abercrombie and down 2% for Hollister.

ANF’s Margins & ExpensesSelling expenses increased 7.8% to $431.2 million and rose 230 basis points (bps) to 38.7% of net sales, while general and administrative expense increased 4.5% to $182.8 million and moved up 50 bps year over year to 16.4% of sales.

Operating income of $88.8 million declined 18.5% from adjusted operating income of $109 million, and adjusted operating margin contracted 180 bps to 8%.

Abercrombie’s Cash Flow Backed Buybacks and FlexibilityANF ended the quarter with $594.1 million in cash and cash equivalents and maintained total liquidity of approximately $1 billion, including borrowing available under its ABL facility. Inventory was $532.7 million, down 1.7% from the prior-year quarter.

Operating cash flow was $44.3 million compared with a use of $4 million a year ago, while capital spending totaled $61.3 million. The company repurchased 1.2 million shares for about $105 million during the quarter and had $745 million remaining under its March 2025 authorization, reinforcing management’s emphasis on returning capital alongside continued investment in stores and brand-building.

Abercrombie’s Q2 & FY26 OutlookManagement maintained its fiscal 2026 outlook for net sales growth of 3-5% and operating margin of 12-12.5%, with net income per share expected in the range of $10.20-$11.00. The company continues to plan roughly $450 million in share repurchases, and capital expenditures of around $225 million versus $200-$250 million expected earlier. It expects an effective tax rate of about 30%.

For fiscal 2026, Abercrombie plans 30 net store openings, together with 80 remodels and rightsizes, and 20 closures.

For the second quarter of fiscal 2026, ANF expects net sales growth of 2-4% and an operating margin of around 10%, with net income per share projected at $1.80-$2.00. The outlook also embeds a year-over-year tariff headwind of about 120 basis points in the quarter, while the fiscal-year tariff impact was reduced to an unfavorability of around 20 basis points. The company noted it has applied for approximately $100 million of tariff refunds under IEEPA. It expects share repurchases of at least $150 million in the fiscal second quarter.

Key Retail Stock PicksKohl's Corporation (KSS - Free Report) , which is a department store chain, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

KSS delivered a trailing four-quarter earnings surprise of 72.3%, on average. The Zacks Consensus Estimate for KSS’ current financial-year sales indicates a drop of 1% from the year-ago number.

Levi Strauss & Co. (LEVI - Free Report) , which is a designer and marketer of jeans, casual wear and related accessories, currently carries a Zacks Rank of 2.

LEVI delivered a trailing four-quarter earnings surprise of 21.4%, on average. The Zacks Consensus Estimate for Levi Strauss’ current financial-year sales indicates growth of 5.2% from the year-ago number.

Fossil Group, Inc. (FOSL - Free Report) , which is a designer and marketer of fashion accessories, currently carries a Zacks Rank of 2.

The Zacks Consensus Estimate for FOSL’s current financial-year earnings is expected to rise 87.6% from the corresponding year-ago reported figure. FOSL delivered an earnings surprise of 86.4% in the last reported quarter.

On May 27, 2026, Abercrombie & Fitch Co ANF shares rose 8.9% today, bringing the current price to $81.42. This price is within a 52-week range of $65.45 to $133.11. The recent increase comes after a challenging year where shares experienced a year-to-date decline of 35.3%.

GF Value™ verdict: Current price of $81.42 is 25.2% below GF Value™ of $108.88.GF Score™ of 85/100 indicates a strong overall assessment.No insider transactions in the last 3 months suggest a neutral signal from company insiders. Is ANF Overvalued or Undervalued? With the current price of $81.42 compared to the GF Value™ estimate of $108.88, Abercrombie & Fitch Co appears to be undervalued by approximately 25.2%. This margin of safety suggests that the stock may offer a potential opportunity for investors looking for value. The GF Valuation label indicates that the stock is modestly undervalued, signifying that there is room for price appreciation based on the intrinsic value calculation.

GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates. While the undervaluation presents a potential upside, investors should remain cautious as market conditions can change and affect stock performance.

How Does ANF's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 7.7x 13.0x Forward P/E 7.6x N/A The current P/E (TTM) of 7.7x is significantly below its 5-year median P/E of 13.0x, indicating that the stock is trading at a discount compared to its historical valuation levels. This analysis aligns with the GF Value™ verdict, reinforcing the notion that ANF is undervalued based on its past performance metrics.

What Does ANF's GF Score™ Tell Us? Metric Rating GF Score™ 85 Financial Strength 8/10 Profitability 8/10 Growth 8/10 Valuation 4/10 Momentum 7/10 The GF Score™ of 85/100 highlights Abercrombie & Fitch Co's strong financial health and profitability, with particularly strong ratings in Financial Strength, Profitability, and Growth, each scoring 8/10. However, the Valuation rank of 4/10 suggests that the stock's current pricing may not fully reflect its potential given its strong operational metrics. This contrast between high operational scores and lower valuation indicates that while the company is performing well, its market price may not align with its underlying strength.

What Are Insiders Doing with ANF Stock? There have been no insider transactions reported in the last 3 months for Abercrombie & Fitch Co. This lack of activity can suggest a neutral sentiment among insiders regarding the stock's future performance. In general, consistent insider buying can indicate confidence in the company’s prospects, while selling may suggest the opposite. The absence of transactions leaves the current sentiment ambiguous.

What This Means for Investors Based on the GF Value™ assessment, Abercrombie & Fitch Co is currently undervalued, presenting a potential opportunity for investors seeking value in the retail sector. However, it is important to consider the broader market context and individual investment strategies before making decisions.

For the complete analysis, visit the Abercrombie & Fitch Co ANF stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.

Frequently Asked Questions What is ANF's GF Score™?

ANF has a GF Score™ of 85/100, indicating a strong overall assessment based on several key financial metrics.

Is ANF overvalued or undervalued?

ANF is currently undervalued with a GF Value™ of $108.88 compared to its current price of $81.42, suggesting a potential upside.

What is ANF's P/E ratio?

ANF's P/E (TTM) ratio is 7.7x, which is significantly lower than its 5-year median P/E of 13.0x, indicating that the stock is trading at a discount relative to its historical valuation.

This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].

Have you evaluated the performance of Abercrombie & Fitch's (ANF - Free Report) international operations for the quarter ending April 2026? Given the extensive global presence of this teen clothing retailer, analyzing the patterns in international revenues is crucial for understanding its financial strength and potential for growth.

In the modern, closely-knit global economic landscape, the capacity of a business to access foreign markets is often a key determinant of its financial well-being and growth path. Investors now place great importance on grasping the extent of a company's dependence on international markets, as it sheds light on the firm's earnings stability, its skill in leveraging various economic cycles and its broad growth potential.

International market involvement serves as insurance against economic downturns at home and enables engagement with economies that are growing more quickly. Still, this move toward diversification is not without its challenges, as it involves navigating through the fluctuations of currencies, geopolitical threats, and the distinctive nature of various markets.

While delving into ANF's performance for the past quarter, we observed some fascinating trends in the revenue from its foreign segments that are commonly modeled and observed by analysts on Wall Street.

The company's total revenue for the quarter amounted to $1.11 billion, marking an increase of 1.5% from the year-ago quarter. We will next turn our attention to dissecting ANF's international revenue to get a clearer picture of how significant its operations are outside its main base.

Unveiling Trends in ANF's International RevenuesEurope, Middle East and Africa accounted for 15% of the company's total revenue during the quarter, translating to $167.37 million. Revenues from this region represented a surprise of -12.93%, with Wall Street analysts collectively expecting $192.22 million. When compared to the preceding quarter and the same quarter in the previous year, Europe, Middle East and Africa contributed $241.38 million (14.5%) and $185.04 million (16.9%) to the total revenue, respectively.

Asia Pacific generated $46.5 million in revenues for the company in the last quarter, constituting 4.2% of the total. This represented a surprise of +34.33% compared to the $34.62 million projected by Wall Street analysts. Comparatively, in the previous quarter, Asia Pacific accounted for $44.48 million (2.7%), and in the year-ago quarter, it contributed $37.47 million (3.4%) to the total revenue.

Prospective Revenues in International MarketsIt is projected by analysts on Wall Street that Abercrombie will post revenues of $1.25 billion for the ongoing fiscal quarter, an increase of 3.2% from the year-ago quarter. The expected contributions from Europe, Middle East and Africa and Asia Pacific to this revenue are 16.7%, and 3%, translating into $208.25 million, and $37.88 million, respectively.

Analysts expect the company to report a total annual revenue of $5.47 billion for the full year, marking an increase of 3.9% compared to last year. The expected revenue contributions from Europe, Middle East and Africa and Asia Pacific are projected to be 15.6% ($854.69 million), and 2.9% ($159.61 million) of the total revenue, in that order.

In ConclusionRelying on international markets for revenues, Abercrombie faces both prospects and perils. Thus, tracking the company's international revenue trends is essential for accurately projecting its future trajectory.

In an era of growing international interdependencies and escalating geopolitical disputes, Wall Street analysts are vigilant in tracking these trends for businesses with a global reach, in order to refine their predictions of earnings. It should be noted, however, that a multitude of other elements, such as a company's domestic position, also play a significant role in shaping the earnings forecasts.

At Zacks, we place significant importance on a company's evolving earnings outlook. This is based on empirical evidence demonstrating its strong influence on a stock's short-term price movements. Invariably, there exists a positive relationship -- an upward revision in earnings estimates is typically mirrored by a rise in the stock price.

With an impressive externally audited track record, our proprietary stock rating tool - the Zacks Rank - harnesses the power of earnings estimate revisions and serves as an effective indicator of a stock's near-term price performance.

At the moment, Abercrombie has a Zacks Rank #3 (Hold), signifying that its performance may align with the overall market trend in the upcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .

A Look at Abercrombie & Fitch's Recent Stock Price PerformanceOver the past month, the stock has seen a decline of 8.7% in its value, whereas the Zacks S&P 500 composite has posted an increase of 6.3%. The Zacks Retail-Wholesale sector, Abercrombie's industry group, has descended 1.8% over the identical span. In the past three months, there's been a decline of 9.2% in the company's stock price, against a rise of 10.5% in the S&P 500 index. The broader sector has increased by 3.6% during this interval.

New store is the pinnacle expression of the brand, highlighting its New York heritage, while offering an expanded assortment of apparel and lifestyle product for today’s customer June 05, 2026 08:00 ET  | Source: Abercrombie & Fitch Management Co.

NEW ALBANY, Ohio, June 05, 2026 (GLOBE NEWSWIRE) -- Today, Abercrombie & Fitch (“Abercrombie”), a division of Abercrombie & Fitch Co. (NYSE: ANF), announced the opening of its new SoHo store in New York City. Located at 520 Broadway between Spring and Broome Streets, the store reflects the brand’s 134-year-old history in New York, from its original South Street storefront in the 1890s to its past iconic Madison Avenue location, to its Fifth Avenue store today. The store also debuts Abercrombie & Fitch’s first “Heritage Meets Modern” design concept, blending archival storytelling and updated designs in a way that honors the brand’s heritage, while further establishing the retailer as an effortless and elevated American lifestyle brand.

“We are proud to open our doors in the heart of one of New York City’s most iconic shopping destinations, in a place that has been central to Abercrombie & Fitch’s history for more than a century,” said Abercrombie & Fitch Co. Managing Director, Americas, Melissa Worth. “New York has always been woven into our brand’s story, and we truly feel that this new store is the best expression of Abercrombie to date, blending our rich history with a modern design that we hope inspires every customer who walks through our doors.”

Spanning three floors, the store offers an expanded shopping experience featuring a broad assortment of men’s and women’s product, from Abercrombie’s signature denim and Office Approved collections to exclusive New York City and USA merchandise available only in select locations. The brand is also thrilled to spotlight a first-ever accessories section, inclusive of footwear, sunglasses, bags and more, offered to reflect how customers live and shop today.

“Today’s customer leads a multifaceted life, and we wanted our products to reflect that,” said Abercrombie & Fitch Co. Chief Product Officer, Corey Robinson. “With a curated assortment that extends beyond apparel, we’re able to meet our customers wherever life takes them, outfitting them from head to toe with pieces that bring confidence, versatility and comfort for every occasion.”

Curated archive displays throughout the entrance and stairway showcase apparel and memorabilia that connect the brand’s New York heritage to its modern-day evolution, including a 1911 “Saranac” cord suit and a rare “Rainbow Pond” jacket made exclusively for Abercrombie & Fitch by Willis & Geiger in the late 1960s. Heritage-inspired furnishings throughout the space also reflect the brand’s longstanding connection to sporting, travel and discovery, with additional custom millwork, mosaic tiling and fitting rooms with customizable lighting throughout.

The second floor also includes a dedicated activation space inspired by a classic New York hotel bar.

The new Abercrombie & Fitch store opens to the public on Friday, June 5, and will be open daily from 10:00 AM to 9:00 PM. As part of the opening weekend celebration, the brand is partnering with local SoHo creative studio, Abbode, for custom embroidery onsite. Later this month, Hollister, a division of Abercrombie & Fitch Co., will open a store at 547 Broadway in the former Abercrombie SoHo location, further expanding the retailer’s presence in the neighborhood.

About Abercrombie & Fitch
Abercrombie & Fitch is an effortless, elevated American lifestyle brand, blending heritage and modern style through quality apparel, accessories and fragrance crafted for all of life’s moments. Abercrombie & Fitch is the namesake brand of Abercrombie & Fitch Co. and is sold in more than 300 stores worldwide (including abercrombie kids) and on abercrombie.com globally.

Media Contacts
[email protected]

Photos accompanying this announcement are available at:

https://www.globenewswire.com/NewsRoom/AttachmentNg/53572a94-158c-4773-901d-19b3db6239f6

https://www.globenewswire.com/NewsRoom/AttachmentNg/17212ebe-eaf9-432e-9ed0-08c57da324f4

https://www.globenewswire.com/NewsRoom/AttachmentNg/55e4b634-d05b-457f-b0f2-bcf654204c91

Immunic Inc (NASDAQ:IMUX, FRA:10VA) has announced the appointment of veteran biopharmaceutical executive Jon Congleton to its board of directors, as the...

European airlines face a sharp and accelerating contraction in Middle East seat capacity, with UBS warning that the structural risks to the sector may outlast any diplomatic resolution to regional tensions.

Analysts at UBS, the Swiss investment bank, said capacity on routes to and from the Middle East fell again in the most recent week, extending a deterioration that has gathered pace since early March.

Schedule data compiled by aviation analytics firm Cirium shows Middle East capacity is now tracking around 22% below comparable year-earlier levels in March, with the contraction deepening to approximately 39% in April.

The figures represent a material worsening from UBS's previous monitoring round and underline the degree to which geopolitical uncertainty is forcing airlines to pull back from one of the world's key long-haul markets.

The Middle East route network carries particular commercial weight for major European carriers, including International Consolidated Airlines Group SA (LSE:IAG), the owner of British Airways and Iberia, Lufthansa and Air France-KLM, all of which rely on the region both as a destination market and as a connecting hub for onward traffic to Asia.

Capacity pressures are not confined to the Middle East, however.

UBS revised its second-quarter long-haul capacity growth estimate for European airlines down to approximately 3%, from a prior forecast of 5%, while short-haul guidance was left unchanged at around 5%.

Third-quarter capacity estimates were nudged modestly higher for both segments, at approximately 5.6% for long haul and 4.6% for short haul.

The UBS team flagged an additional risk that investors may be underweighting: potential shortages of jet kerosene, the aviation fuel, could drive prices higher even if Middle East hostilities ease.

That dynamic, the analysts argued, could place further downward pressure on capacity as airlines adjust their networks in response to elevated operating costs rather than security concerns alone.

China-Europe and US-Europe routes continue to show positive capacity growth, offering a partial offset, but the Middle East remains the dominant near-term drag on the European aviation demand outlook.

UBS has received compensation from companies covered in its research within the past 12 months. Investors should be aware the firm may have a conflict of interest that could affect the objectivity of this report.

C3 Metals Inc (TSX-V:CCCM, OTC:CUAUF) has announced new drilling results from its Khaleesi copper project in southern Peru, including a 148-metre interval of copper mineralization at depth and higher-grade zones closer to surface.

The company said drill hole KHZ5825-003 intersected 148.05 metres grading 0.42% copper equivalent (0.34% copper) from approximately 275 metres downhole within magnetite-skarn mineralization. This interval included a 114.05-metre section grading 0.48% copper equivalent.

In a separate hole, KHZ5790-001 returned 43.8 metres grading 0.59% copper equivalent from about 40 metres depth. Within that zone, two higher-grade intervals were identified: 3.8 metres grading 1.80% copper equivalent and 1.4 metres grading 5.56% copper equivalent.

According to the company, eight of the 11 newly reported drill holes intersected elevated copper mineralization. The mineralization is primarily hosted in magnetite and garnet-diopside skarns, with additional occurrences in a multiphase intrusive complex.

Exploration at Khaleesi is focused on a contact zone between limestone and the Andahuaylas-Yauri batholith, which extends across the property. The company said drilling is helping define a curved, north-trending magnetite skarn body that remains open at depth and to the north, and may be offset to the south.

C3 Metals noted that at least six intrusive rock types have been identified to date. Based on earlier geochronology work, these intrusions are interpreted to predate the main mineralizing event and may have acted as pathways for mineralizing fluids.

A key objective of the current drill program is to identify a “causative intrusion” linked to mineralization dated at approximately 35.8 million years.

The company described the system as geologically complex, citing the multiphase intrusions, irregular contact zones, and limited surface exposure due to glacial cover.

“The first phase 12-hole, 6,300m program was designed to test a 1,000m by 500m area to a vertical depth of approximately 400m. The goal was to confirm a hydrothermal system of scale,” C3 Metals CEO Dan Symons said in a statement.

“With copper mineralization intersected in all of the first 12 holes drilled at Khaleesi, we view the first phase program for this greenfield project as highly successful.”

Drilling is ongoing, with approximately 11,000 metres completed across 24 holes and two additional holes currently in progress. Assay results have now been reported for 17 holes, with further results expected. The company is also considering additional geophysical surveys, including drone magnetics, 3D induced polarization, and gravity surveys, to help define potential extensions of mineralization.

“The second phase of drilling is focused on vectoring towards the core or 'heat engine' of the system. With a strong treasury and up to 15,000m planned for the second phase drilling, we are well-positioned to continue systematic exploration and vectoring at Khaleesi,” Symons added.

“Separately, drilling is continuing on our porphyry copper and gold prospects in Jamaica."

Additionally, C3 Metals said its board has approved the grant of about 2.8 million stock options to directors, officers, employees, and consultants under its shareholder-approved incentive plan. Of these, about 731,000 options vest immediately, while the remaining approximately 2 million will vest over 12 months, subject to regulatory acceptance.

Each option allows the holder to purchase one common share at a price of C$1.10 and will expire in April 2031. Following the grant, C3 Metals will have about 8.625 million stock options outstanding, representing about 6.88% of its issued and outstanding shares.

FTSE 100 jumps 92 points to 10,396 Brent crude futures fall 2% UK economy contracts 0.1% in April  Housebuilders show strong recovery  1.44pm: Market scepticism recovering Oil prices are creeping up again. Brent crude, having fallen from $95 on Thursday night to almost $86 a barrel this morning, is now back up at almost $88. 

A report from Axios suggested that both sides have agreed the text, which has been cleared at high levels in Iran but may still lack approval from Supreme Leader Mojtaba Khamenei.

The two sides are said to have agreed the text of a proposed memorandum that would immediately reopen the Strait of Hormuz, extend the ceasefire by 60 days and provide limited sanctions relief in exchange for Iranian commitments on its nuclear programme. 

If signed, the agreement mediated by Qatar and Pakistan would be known as the Islamabad agreement.

"Markets are taking Trump’s latest declaration with a degree of caution", says market analyst Fawad Razaqzada at Forex.com.

Economist Kallum Pickering at Peel Hunt notes that President Trump has for the past two months "repeatedly signalled that a deal between the US and Iran to end the conflict and re-open the Strait of Hormuz is imminent".

"Each time, however, negotiations have broken down, or Iran has accused the US of making unjustified claims of a breakthrough."

After last night's announcement, "financial markets appear to be reacting as if a deal is underway"... though "let me emphasise, we have seen this before only for no breakthrough to emerge in the end".

Says Pickering: "If a deal is indeed reached, a big if, expect markets to raise expectations for growth in major economies as inflation worries ease, with expectations for further central bank rate hikes curtailed."

Razaqzada notes that while Trump's claim to have "ended the war with Iran" triggered an immediate risk-on reaction, with equities and bonds in demand as oil fell, "the follow-through remains surprisingly restrained for what would be a significant geopolitical breakthrough".

He adds that "there are still important hurdles to overcome", with Iranian officials have not publicly endorsed the reported framework, and questions remain over whether Tehran will seek additional concessions before signing any deal

1.07pm: US stocks to extend gains Wall Street is heading for a firmer open, with futures ticking higher as investors weigh President Donald Trump’s sudden shift on Iran and turn attention to a blockbuster market debut.

Dow Jones futures are up over 0.7%, while those for the S&P 500 and the Nasdaq futures are up nearer 0.6%, all extending the strong gains from last night.

That rally came after Trump said US military strikes on Iran were "cancelled" and suggested a peace deal could be close, as "discussions with the Islamic Republic of Iran have been brought to the highest level of Iranian leadership and approved". 

The Nasdaq jumped 2.5%, the Dow finished up 1.9% and the S&P gained 1.8% as risk appetite returned.

Today, geopolitics looks set to fade into the background, with all eyes are on the much-anticipated SpaceX IPO, for which many are holding their breath.

12.34pm: Fall in UK GDP 'won't alter BoE outlook', says Barclays   UK monthly GDP contracting 0.1% in April will not alter the Bank of England's thinking much, says economist Jack Meaning at Barclays.  

The monthly contraction was in line with other soft Q2 data, he points out, with PMI data weakening, particularly in services, as well as weaker spending signals from Barclays spend trends data.

"We continue to expect the impact of the Middle East conflict to feed into more subdued activity in the next few months," he adds, retain his expectation of 0.1% quarter-on-quarter growth in Q2.

"For the Bank of England, we think the data today will validate their expectation of Q2 growth of 0.1% q/q heading into the meeting next week (18 June), and won't alter their outlook for GDP growth.

"We now look to BoE​/​Ipsos inflation expectations data (12 June), the May inflation data (17 June) and April labour market release (18 June) for any surprises.

"We think the bar for coming data to change the outcome of the June meeting is high, although it may, at the margin, affect the vote split and tone of individual paragraphs."

11.54am: Shell, BP and BAE weigh Weighing on the index today are falls for energy and defence groups, some heavyweights among only 16 London blue-chips that are in the red currently.

Oil giants BP and Shell are down 4.4% and 3.25%. Defence group BAE Systems is down 1.9%, followed by energy suppliers Centrica and SSE, down 1.9% and 1%. 

Next are Sage Group, Bunzl, National Grid, LSE and British American Tobacco. 

11.04am: SpaceX touching down SpaceX’s much anticipated IPO "has been a roaring success", says Kathleen Brooks at XTB, with huge demand for the shares.

The IPO has raised $75 billion, making it the largest ever, valuing the company at $1.77 trillion, the seventh largest firm on the US stock market.

Trading in New York's Nasdaq begins later, with the company worth more than JP Morgan, Meta, Eli Lilly, Berkshire Hathaway and Tesla, Brooks notes. 

It's free float of $75 billion is more on a par with the market caps of Airbnb, Ross Stores and General Motors, though. 

"Today comes the real test," says Brooks, as the shares trade on the open market for the first time.

"After Thursday’s stock market rally the scene is set for a strong start, but any sign of weakness on the main US tech exchange could send shivers across financial markets."

She notes reports that the allocation of shares to the retail market has been lower than originally reported at roughly 20% versus the mooted 30%.

"This is still far higher than the usual allocation to the retail trading community and suggests that institutional demand far outstripped supply.

"This signals that everyone wants a slice of SpaceX right now, which could lead to more shares coming to market, should the underwriters exercise their right to sell additional shares in the coming weeks."

10.30am: More market movers The FTSE 100 has pared some of the morning's gains, and is now 141 points up at 10,445.02. Here's a look at some of the other stocks making big moves today. 

Kier Group PLC (LSE:KIE) rose 3.8% after securing a £140 million contract extension with South West Water, part of Pennon Group PLC (LSE, OTC), running through to 2028. The deal extends a 20-year partnership and keeps Kier as sole contractor on the network services alliance. Read more

BSF Enterprise PLC (LSE:BSFA, OTC:BSFAF) plunged 42% after its first T-Rex Leather handbag failed to meet its reserve at a Paris auction. The €150,000 top bid fell short, leaving the item unsold. The company has now withdrawn it for private sale, but says interest in its bio-leather technology remains strong, with ongoing talks in the sportswear and automotive sectors. Read more

Virgin Wines UK PLC (AIM:VINO) fell 14% to 28.8p after warning of a swing to a £1.5 million pre-tax loss for 2026 despite modest revenue growth. Higher duties and weaker consumer confidence weighed on profits. The group still highlighted improving sales momentum and rising customer acquisition, alongside plans for a new £700,000 warehouse investment funded from cash reserves. Read more

MedPal AI plc (AIM:MPAL) surged 25% to a three-month high around 3.88p after UK approval of Novo Nordisk’s oral weight-loss drug boosted sentiment around its new clinic model. The company says the timing is ideal, with its New Health service launching just as demand for GLP-1 treatments expands. It expects oral options to widen uptake beyond injectables, supported by strong US prescription trends. Read more

Cizzle Biotechnology Holdings PLC (LSE:CIZ) shares jumped 10.9% to 3.05p after the company secured a US patent covering methods used to detect its CIZ1B lung cancer biomarker. The patent strengthens its position in a key market and supports plans with partner Cizzle Bio Inc to commercialise the test across North America and the Caribbean. Read more

9.20am: Footsie bounces higher The FTSE 100 has extended its gains as the morning progresses, now up 148 points at 10,451.84 for a gain of close to 1.5%.

BA-owner International Consolidated Airlines Group SA (LSE:IAG) is now leading the pack, with a 5.5% gain, while Rolls-Royce Holdings PLC (LSE:RR.) has edged into second place, up 4.5%. 

"Global equities are ending the week with a powerful relief rally as markets price a rising chance of a US-Iran diplomatic breakthrough," commented Tickmill Group's Patrick Munnelly. "President Trump said the US is nearing a deal with Tehran, raising hopes that a conflict which has driven volatility for more than three months could be moving toward resolution." 

Munnelly pointed out that oil is the clearest expression of the shift in risk premia. Brent has fallen another 2% to around $88.50/bbl after President Trump softened military threats and pointed to high-level talks with Iranian officials.

"A formal signing ceremony could reportedly take place as soon as this weekend in Europe, with JD Vance expected to attend," he added. "The market is moving from pricing escalation risk to pricing de-escalation relief. That does not remove geopolitical uncertainty, but it materially reduces the immediate threat of a sustained energy shock."

9am: Housebuilders perk up  UK housebuilders surged on Friday as investors warmed to the prospect of lower interest rates and easing tensions in the Middle East.

Persimmon PLC (LSE:PSN) rose 3.9%, Barratt Redrow PLC (LSE:BTRW) gained 3.7%,Taylor Wimpey PLC (LSE:TW.) added 2.9%, while Vistry Group PLC (LSE:VTY) led the sector with a 5.1% jump.

The gains came despite data showing the UK economy shrank by 0.1% in April. Instead of spooking markets, the weaker GDP reading fuelled expectations that the Bank of England may cut rates sooner rather than later to support growth. The BoE's rate-setting committee meets next week. 

Hopes of a peace agreement in the Middle East also lifted sentiment. Oil prices retreated on the prospect of fewer supply disruptions, easing inflation concerns and reducing pressure on policymakers to keep rates higher for longer.

Government bond prices rose, and yields fell as investors increasingly priced in rate cuts rather than hikes. For housebuilders, cheaper borrowing costs could mean more affordable mortgages and stronger demand, helping a sector that has struggled under the weight of higher interest rates.

8.15am: Footsie bounces at the open  The FTSE 100 jumped at the open, gaining 89 points to 10,392.88 in the first 15 minutes of trading on hopes that an end to the conflict in the Middle East is near.

Antofagasta PLC (LSE:ANTO) led the gainers, with a 5.3% gain as copper prices surged on the potential end to the war. Fresnillo PLC (LSE:FRES) was close behind, up 4.9%, while housebuilder Persimmon PLC (LSE:PSN) rose 4.5% after a report suggesting that recent buying activity had been brisk. International Consolidated Airlines Group SA (LSE:IAG) added 4.4% as oil prices fell below $90 a barrel.  

BP PLC (LSE:BP.) and Shell PLC (LSE:SHEL, NYSE:SHEL) have come under pressure due to the lower oil prices, down 3.3% and 2.4% respectively.

"The FTSE100 rode on the coattails of improved global investor sentiment, with a strong open which built on a resilient performance in the previous session," commented interactive investor's Richard Hunter. "The gains came despite the oil majors following the oil price south, with a broad rally which included the housebuilders after a report suggesting that recent buying activity had been brisk."

While markets staged a strong recovery on hopes that the Middle East conflict could finally be coming to an end, Hunter noted that for the US there is only one show in town today.

"The highly anticipated SpaceX IPO will debut today after what has been an unusual run-up," Hunter said. "The price of $135 per share was announced in advance, Elon Musk reportedly negotiated special deals with Wall Street advisors, and the percentage of shares available to retail investors is much higher than would normally be the case. The offering will raise $75 billion for the company, which will be valued at $1.75 trillion."

7.55am: Fickle markets  Markets look set for a positive end to the week after President Trump made a massive about-turn on his plan to "hit Iran hard." 

It's not the first time he's indicated a peace deal is at hand. According to a CNBC review of the president’s social media posts and public remarks, Trump has signalled or stated outright more than 30 times that a deal is nearly at hand. CNN puts it higher at 38 times since before April's ceasefire was announced. 

"The past 24 hours has seen a sharp reversal in the trajectory of the US–Iran conflict, as mounting hopes of a deal have seen Brent crude fall -1.62% overnight, leaving it on track for a 3-month low of $88.80/bbl. So that’s led to a huge rally across bonds and equities, as lower oil prices have eased fears about a prolonged stagflationary shock," commented Deutsche Bank's Jim Reid. 

"With oil prices coming down sharply, alongside hopes that the Strait of Hormuz will reopen, that’s seen investors price out the chance of rapid rate hikes this year. Indeed, as we go to press, markets are now pricing in just a 77% chance of a Fed rate hike by December, having been fully priced in earlier this week."

7.35am: Middle East conflict hits the economy The UK economy hit a small bump in April, with GDP slipping 0.1% after solid growth in February and March. The monthly decline was largely down to a 0.2% drop in the services sector, while construction edged higher and production was flat.

The bigger picture, though, remains more encouraging. The economy expanded by 0.7% over the three months to April, marking the fifth consecutive period of three-month growth. Services continued to do much of the heavy lifting, with information and communication performing particularly well, alongside retail and professional services. Construction also made a strong contribution.

There were some headwinds. Businesses across sectors said conflict in the Middle East affected trading conditions, with some reporting weaker demand and higher energy and fuel costs.

Even so, GDP was still 1.2% higher than a year earlier, suggesting the UK's growth story remains intact despite a softer start to the second quarter.

FTSE 100 pre-market open Stocks in London are expected to open higher after US President Donald Trump backtracked on a threat to "hit Iran hard" as he hinted at a major breakthrough in talks. 

The FTSE 100 has been called 81 points higher, after closing Thursday's session 49 points up at 10,304. Brent crude has fallen 2% to $88.58 a barrel, while US WTI futures are also lower. 

"What’s unbelievable is that after three months of this nonsense, markets still move on words that have little substance," commented Swissquote's Ipek Ozkardeskaya. "This morning, US crude is testing the $85pb level to the downside, its lowest level since the early days of the Iranian conflict. Yet there is no confirmation from Iranian media, and there is nothing to suggest that this time will be the charm."

Overnight, US stocks staged a powerful comeback, with investors piling back into risk assets after President Trump said he had cancelled planned military strikes against Iran and suggested a diplomatic agreement could be close at hand.

The tech-heavy Nasdaq led the advance, jumping 2.5% as traders reversed much of Wednesday's sharp sell-off. The Dow Jones Industrial Average surged 1.9%, and the S&P 500 climbed 1.8%.

As Friday trade draws to a close in Asia, Tokyo's Nikkei is up 2.9%, Hong Kong's Hang Seng is 1.7% higher, and Shanghai's SSE Composite has gained 1.2%. In Seoul, the Kospi has rallied 4.4% after earlier trading 8% higher as foreign investors shifted to net buying for the first time in 25 trading days. Sydney's ASX 200 closed 2% firmer. 

MasTec, Inc. (MTZ) Q1 2026 Earnings Call Transcript

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What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.

Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.

Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.

Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.

VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.

Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +23.7% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.

That's where the Style Scores come in.

To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.

The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.

For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: MasTec (MTZ - Free Report) MasTec, Inc. is a leading infrastructure construction company operating mainly throughout North America. The company engages in the engineering, building, installation, maintenance and upgrade of energy, communication, utility and other infrastructure.

MTZ is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.

Momentum investors should take note of this Construction stock. MTZ has a Momentum Style Score of A, and shares are up 15.4% over the past four weeks.

Eight analysts revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $0.32 to $8.84 per share. MTZ boasts an average earnings surprise of +15.4%.

With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, MTZ should be on investors' short list.

CORAL GABLES, Fla.--(BUSINESS WIRE)--MasTec, Inc. (NYSE: MTZ) will host an in-person, invitation-only, Investor Day in New York City today beginning at 8:45 a.m. ET, as previously announced. The event is expected to conclude at approximately 12:00 p.m. ET. Presentations will be made by members of MasTec's Senior and Operational Management Teams, providing an in-depth review of MasTec's business strategy, growth drivers and multi-year financial targets. The session will also include a question a.

MTZ boosts its 2026 adjusted EBITDA target to $1.5B after a standout Q1, with AI-linked data center and grid work lifting demand and margins.

MasTec delivered strong Q1 FY26 results, with revenue up 35.4% to $3.83B and adjusted EPS of $1.39, beating consensus. Sustained demand momentum across segments and a record backlog support continued double-digit topline growth in FY26. Continued focus on margin optimization along with a healthy topline growth outlook to drive earnings growth over the coming quarters.

Key Takeaways Quanta's backlog reached a record $48.5B as of Q1 2026 as AI-driven power demand accelerated.MasTec raised its 2026 guidance after backlog climbed 28% year over year to $20.3B as of Q1 2026.PWR targets transformer and fabrication expansion while MTZ boosts data center work. The United States infrastructure contracting companies are benefiting from surging investment in power grids, renewable energy, telecom and AI data center buildouts. Market players like Quanta Services, Inc. (PWR - Free Report) and MasTec, Inc. (MTZ - Free Report) , that compete in utility and energy infrastructure markets, are banking on these long-term tailwinds.

Quanta is a leading provider of electric power and utility infrastructure solutions, with a strong focus on transmission, distribution and large-scale energy projects. Meanwhile, MasTec engages in the engineering, building, installation, maintenance and upgrade of energy, communication, utility and other infrastructure.

Let’s closely compare the fundamentals of the two infrastructure stocks to determine which one is a better investment now.

The Case for Quanta StockQuanta’s mix across transmission and distribution, grid hardening, renewable integration and generation gives it multiple paths to participate as those plans become multi-year capital programs. Surging AI-related power demand and expanding utility investments are driving data center project opportunities, making data centers a central pillar of the company’s long-term growth strategy. PWR achieved a record total backlog of $48.5 billion as of March 31, 2026, providing a clear and durable runway for long-term growth. This record includes a 12-month backlog of $28.2 billion and remaining performance obligations of $26.2 billion. The Electric Power Infrastructure Services segment accounted for $40.1 billion of the total backlog.

Besides, Quanta’s ability to self-perform 80-85% of its work keeps more of the execution under its control and can reduce reliance on subcontractors on large programs. It is heavily investing in deepening its vertical supply chain to offset the ongoing global uncertainties and rising inflation. The company expects to invest $500-$700 million over the next several years in power transformer manufacturing facilities and related strategy, which is intended to double transformer manufacturing capacity. Besides, it is also planning to nearly double off-site manufacturing, fabrication and logistics facilities to about 6.7 million square feet.

At its March 2026 Investor Day, management outlined an opportunity to more than double adjusted EPS by 2030, with a 15-20% adjusted EPS growth target and a total addressable market estimate of $2.4 trillion through 2030, anchoring a longer-cycle demand backdrop for Quanta’s platform.

Moreover, the company aims to sustain its integration discipline while continuing to layer in capabilities that fit its self-perform model. In the first quarter of 2026, acquired businesses contributed about $460 million of Electric revenues and about $335 million of Underground and Infrastructure revenues, supporting growth beyond organic end-market demand. Management continues to describe an active pipeline of strategic opportunities and a target leverage profile of 1.5-2x, which frames future tuck-in activity alongside organic investment.

The Case for MasTec StockMasTec is also gaining from sustained demand across multiple infrastructure end markets. Communications growth is supported by rising data consumption, fiber deployment and multiyear broadband initiatives, including BEAD funding. Power Delivery demand is driven by grid modernization, system hardening and rising electricity needs, with data centers expected to materially increase power consumption. Clean Energy and Infrastructure is seeing growth across renewables, industrial projects and mission-critical facilities, including data centers. This diversification reduces reliance on any single market and supports more stable long-term growth.

Backlog reached a record $20.3 billion in the first quarter of 2026, increasing approximately 7% sequentially and 28% year over year, supported by a 1.4x book-to-bill ratio. Management highlighted that backlog does not fully capture ongoing negotiations and verbal awards, indicating additional upside potential. Management highlighted growing opportunities in fiber interconnectivity, transmission infrastructure and turnkey data center construction, positioning MasTec at the center of several multiyear infrastructure trends.

Owing to the robust market trends, MTZ raised its 2026 guidance, as it now expects revenues of approximately $17.5 billion (from $17 billion), adjusted EBITDA of $1.5 billion (from $1.45 billion) and EPS of $8.79 (from $8.40 per share), representing solid year-over-year growth across all metrics. This outlook reflects sustained demand, backlog conversion and improving operational execution, supporting continued earnings growth momentum.

In the first quarter of 2026, adjusted EBITDA increased 73% year over year, with margin expansion of 170 basis points. Power Delivery and Pipeline segments showed notable margin improvements, supported by better execution and project performance. MTZ expects continued margin expansion across segments in 2026, with full-year EBITDA guidance raised to approximately $1.5 billion and margins improving modestly. This reflects a better project mix, pricing improvements and operational discipline.

However, variability in project timing, dwindling cash flow, increasing inflation risks and global political unrest are proving to be near-term growth restrictions for the company. MasTec operates in markets influenced by government policy and regulatory approvals. Renewable energy investment remains tied to policy frameworks and potential changes to incentive structures could impact project activity in Clean Energy and Infrastructure. These factors introduce uncertainty into project pipelines despite favorable long-term demand trends.

Stock Performance & ValuationAs witnessed from the chart below, in the year-to-date period, Quanta’s share price performance is below MasTec's but significantly above the broader Construction sector.

Image Source: Zacks Investment Research

Considering valuation, over the last five years, Quanta has been trading above MasTec on a forward 12-month price-to-earnings (P/E) ratio basis.

Image Source: Zacks Investment Research

Overall, from these technical indicators, it can be deduced that PWR stock offers a slow growth trend but with a premium valuation, while MTZ stock offers a speeding growth trend with a discounted valuation.

Comparing EPS Estimate Trends: PWR vs. MTZThe Zacks Consensus Estimate for PWR’s 2026 and 2027 earnings has trended upward in the past 30 days to $13.95 and $16.39 per share, respectively. The estimates for 2026 and 2027 imply year-over-year growth of 29.8% and 17.5%, respectively.

EPS Trend of PWR

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for MTZ’s 2026 and 2027 earnings has trended upward in the past 30 days to $8.86 per share and $11.77 per share, respectively. The revised estimated figures for 2026 and 2027 imply 35.3% and 32.8% year-over-year growth, respectively.

EPS Trend of MTZ

Image Source: Zacks Investment Research

Return on Equity (ROE) of PWR & MTZ StocksQuanta’s trailing 12-month ROE of 20.5% exceeds MasTec’s average, underscoring its efficiency in generating shareholder returns.

Image Source: Zacks Investment Research

Should You Invest in PWR Stock or MTZ Stock?Quanta and MasTec are both benefiting from the powerful multiyear infrastructure cycle tied to electrification, renewable energy, broadband expansion and AI-driven data center growth. However, the two companies currently present different investment profiles based on momentum, valuation and earnings visibility.

Quanta, which currently sports a Zacks Rank #1 (Strong Buy), continues to stand out through its unmatched scale in electric transmission, grid modernization and utility infrastructure. Management’s target of 15-20% adjusted EPS growth through 2030 further reinforces confidence in Quanta’s durable growth runway. In addition, rising earnings estimates and stronger ROE reflect execution consistency and shareholder efficiency.

MasTec, which currently carries a Zacks Rank #3 (Hold), is also executing well, supported by record backlog, improving margins and strong exposure to broadband, power delivery and renewable infrastructure. The company’s discounted valuation and stronger recent stock momentum may appeal to aggressive growth investors. However, variability in project timing, policy-sensitive renewable exposure and weaker cash-flow trends introduce higher near-term uncertainty.

Thus, compared with MTZ stock, PWR stock’s superior backlog scale, operational control and stronger profitability metric make it the better stock to buy now for investors seeking a more balanced combination of growth, visibility and execution strength. You can see the complete list of today’s Zacks #1 Rank stocks here.

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.

The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.

Zacks Premium includes access to the Zacks Style Scores as well.

What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.

Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.

The Style Scores are broken down into four categories:

Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.

Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.

Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.

VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

#1 (Strong Buy) stocks have produced an unmatched +23.7% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.

But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.

That's where the Style Scores come in.

To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.

As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.

A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: MasTec (MTZ - Free Report) MasTec, Inc. is a leading infrastructure construction company operating mainly throughout North America. The company engages in the engineering, building, installation, maintenance and upgrade of energy, communication, utility and other infrastructure.

MTZ is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.

Additionally, the company could be a top pick for growth investors. MTZ has a Growth Style Score of B, forecasting year-over-year earnings growth of 35.3% for the current fiscal year.

For fiscal 2026, nine analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.34 to $8.86 per share. MTZ boasts an average earnings surprise of +15.4%.

With a solid Zacks Rank and top-tier Growth and VGM Style Scores, MTZ should be on investors' short list.

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Key Takeaways MasTec posted a record $20.3B Q1 backlog, up 28% YoY, with a 1.4x book-to-bill.MTZ sees AI data centers boosting demand for power, fiber and turnkey construction across multiple segments.MasTec ended Q1 with ~$1.8B liquidity and $273.7M cash; expects 2026 operating cash flow of more than $1B. MasTec, Inc. (MTZ - Free Report) is benefiting from record backlog levels and strong demand across its Communications, Power Delivery, Clean Energy & Infrastructure and Pipeline segments. Growth is being driven by investments in AI-driven data center connectivity, grid modernization, power infrastructure, natural gas and LNG projects, and broadband expansion. The company is also leveraging its diversified service portfolio, turnkey project capabilities and recent acquisitions to strengthen its market position and capitalize on long-term infrastructure spending trends.

Shares of this global provider of infrastructure services have surged 74.1% year to date compared with the Zacks Building Products - Heavy Construction industry’s 40.7% growth. Its earnings per share (EPS) topped the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 15.4%.

Image Source: Zacks Investment Research

Notably, MasTec’s 2026 EPS estimates have been revised upward over the past 60 days to $8.86 from $8.56. Although project timing uncertainties and ongoing macro pressures remain headwinds, strong backlog growth and favorable infrastructure demand continue to drive growth.

MasTec stock currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Let’s delve into the major driving factors.

Factors Fueling Growth of MTZ StockStrong Backlog and Market Diversity: MasTec highlights its strong backlog and broad market diversity as core pillars driving its record-breaking performance and long-term financial optimism. The company achieved a historic total backlog of $20.3 billion at the end of the first quarter, representing a 28% year-over-year increase. This milestone was supported by a robust consolidated book-to-bill ratio of 1.4x, which accelerated even further to 1.6x within both the Power Delivery and the Clean Energy and Infrastructure segments. Management emphasized that this massive backlog incorporates improved pricing and contract terms negotiated over the past year. Because these higher-margin contracts are just beginning to cycle into production, their positive impact is expected to increasingly flow through the financial results during the remainder of 2026 and into 2027.

Data Center Opportunity Expansion: MasTec is increasingly benefiting from the rapid expansion of AI-driven data center development, which is creating substantial demand for power infrastructure, fiber connectivity and site development services. Management highlighted growing opportunities across data center interconnectivity, long-haul fiber networks, transmission infrastructure and turnkey construction. MasTec’s integrated capabilities across construction management, civil infrastructure, power delivery, telecommunications and maintenance position the company to capture a greater share of this expanding market. Demand for these services is rising as customers seek partners that can execute complex, mission-critical projects with speed, scale and certainty. Beyond data center construction itself, MasTec is positioned to benefit from the broader infrastructure ecosystem required to support these facilities, creating multiple avenues for sustained growth. As turnkey data center solutions continue to mature, management views this opportunity as a meaningful long-term growth driver for the company.

Acquisition: Recent acquisitions have strengthened MasTec’s momentum entering 2026, particularly within the Clean Energy and Infrastructure segment. While the segment continued to deliver strong organic growth of more than 30% year over year, acquired businesses provided an additional performance tailwind and helped support the segment’s 45% revenue growth and 56% EBITDA growth in the first quarter. These strategic transactions, which were executed in late 2025 across two different market segments, have integrated effectively enough to support the company’s ability to raise its full-year guidance and reduce historical levels of seasonality. These bolt-on acquisitions are also expanding MasTec’s self-perform capabilities, geographic reach and turnkey service offering, especially in high-growth areas such as data center development. As these businesses mature within MasTec’s broader operating platform, they are expected to remain an important driver of growth, execution capacity and margin improvement through 2026.

Strong Liquidity: MasTec maintained a solid liquidity position at the end of the first quarter of 2026, with total liquidity of approximately $1.8 billion and cash and cash equivalents of $273.7 million as of March 31, 2026. Net leverage stood at 1.8x, well within the company’s financial policy and supportive of its investment-grade profile. Management emphasized that MasTec’s strong balance sheet provides ample flexibility to pursue a disciplined, returns-focused capital allocation strategy. The company’s priority remains funding robust organic growth, including targeted investments in equipment and capacity to support strong customer demand. MasTec generated $98.9 million of operating cash flow in the quarter and maintained its full-year expectation for operating cash flow to exceed $1 billion, while increasing its 2026 net cash capital expenditure forecast to approximately $220 million to support higher revenue growth.

Other Key PicksOther top-ranked stocks from the Construction sector are:

Comfort Systems USA, Inc. (FIX - Free Report) flaunts a Zacks Rank #1 at present. The company delivered a trailing four-quarter earnings surprise of 39.3%, on average. FIX stock has surged 95.9% year to date.

The Zacks Consensus Estimate for Comfort Systems’ fiscal 2026 sales and earnings per share (EPS) indicates growth of 30.5% and 49.1%, respectively, from the prior-year levels.

 Sterling Infrastructure, Inc. (STRL - Free Report) sports a Zacks Rank of 1 at present. The company delivered a trailing four-quarter earnings surprise of 29.1%, on average. STRL stock has jumped 181.1% year to date.

The Zacks Consensus Estimate for Sterling’s 2026 sales and EPS indicates growth of 48% and 63.3%, respectively, from the prior-year levels.

Quanta Services, Inc. (PWR - Free Report) flaunts a Zacks Rank of 1 at present. The company delivered a trailing four-quarter earnings surprise of 10.3%, on average. PWR stock has climbed 68.6% year to date.

The Zacks Consensus Estimate for Quanta’s 2026 sales and EPS indicates growth of 21.5% and 29.8%, respectively, from the prior-year levels.

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Shares of MasTec, Inc. MTZ have gained 68.9% in the past six months, significantly outperforming the Zacks Building Products - Heavy Construction industry's 35.5% growth. The stock has further outperformed the broader Construction sector and the S&P 500 in the same period.