Chicago, IL – April 7, 2025 – Zacks Equity Research shares The Hanover Insurance Group, Inc. THG as the Bull of the Day and MillerKnoll, Inc. MLKN as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Tesla, Inc. TSLA and Lucid Group, Inc. LCID.
Here is a synopsis of all four stocks.
Looking for a place to hide out in this uncertainty? The Hanover Insurance Group, Inc. is a Zacks #1 (Strong Buy) which had a record 2024 and is expected to see further growth in 2025.
The Hanover Insurance Group is the holding company for several property and casualty insurance companies. With a market cap of $6.2 billion, it is one of the largest insurance businesses in the United States.
It offers standard and specialized insurance protection for small and mid-sized businesses as well as for homes, autos, and other personal items.
On Feb 4, 2025, The Hanover Insurance Group reported its fourth quarter and full year 2024 results. It easily beat the Zacks Consensus Estimate for the quarter reporting $5.32, or $1.87 higher than the Zacks Consensus of $3.45.
This earnings surprise extended the company's amazing earnings surprise track record.
The Hanover Insurance Group has not missed on earnings during the last 5 years, which included the pandemic. That's impressive.
It was a record quarter, and full year.
"We posted full-year operating earnings of $13.34 per share, our highest ever, while we improved our ex-CAT combined ratio by 2.9 points, to 88.4%," said Jeffrey M. Farber, CFO.
The company is shareholder friendly. In the fourth quarter, Hanover resumed share buybacks. It repurchased about 170,000 shares for $26.7 million leaving it approximately $303 million under the existing share repurchase program.
Hanover's Board of Directors also raised the quarterly dividend by 5.9% to $0.90 per share. It has increased its dividend 20 years in a row. The dividend is now yielding 2.1%.
With market uncertainty roiling the stock market in 2025, investors might want to consider an insurance company. The analysts are bullish about Hanover for 2025 and 2026.
1 estimate has been revised higher in the last 30 days, and 4 in the last 60 days, for 2025. It has pushed the Zacks Consensus Estimate up to $14.47 from $14.12 over the last month. That's earnings growth of 8.5%.
They are equally bullish about 2026. 1 estimate has been revised higher in the last 30 days, and 4 higher in the last 60 days. The Zacks Consensus is calling for $16.05, which is another 10.9% earnings growth.
Up until the tariffs were announced, shares of Hanover had been rallying. They are still up 3.4% year-to-date which is outperforming the S&P 500.
Hanover is cheap. It trades with a forward price-to-earnings (P/E) ratio of just 11.9.
It will report first quarter 2025 earnings on Apr 30, 2025.
For investors looking for a cheap, growth stock, with a strong history of a dividend, The Hanover Insurance Group is a stock to keep on the short list.
MillerKnoll, Inc. is encouraged by its retail business but the office side is lagging. This Zacks Rank #5 (Strong Sell) guided lightly for its fiscal fourth quarter.
Headquartered in Zeeland, MI, MillerKnoll is a collective of furniture brands. Its tag line cites Florence Knoll saying, "Good design is good business."
Its brands include Herman Miller, Knoll, Colebrook Bosson Saunders, DatesWeiser, Design Within Reach, Edelman, Geiger, HAY, Holly Hunt, Knoll Textiles, Maharam, Muuto, NaughtOne, and Spinneybeck|FilzFelt.
MillerKnoll is now organized in three segments: North American Contract and International Contract which represent the office side of the business and Global Retail which is the consumer side of the business.
On Mar 26, 2025, MillerKnoll reported its fiscal third quarter 2025 results and met the Zacks Consensus of $0.44.
Net sales were up 0.4% to $876.2 million, driven by North America Contract and Global Retail.
During the quarter MillerKnoll saw a notable difference in demand in its retail businesses compared to most of its contract businesses. But it was retail businesses that out shined contract as overall demand in most geographies was sluggish in contract due to uncertainty related to tariff policy and other macroeconomic factors.
Conversely, in Global Retail, orders were up nearly 15%, with organic order up nearly 17%.
Retail demand in North America was strong with the adjusted Black Friday/Cyber Monday orders up 14% in the quarter.
Given the economic uncertainty around tariffs and global supply chains, it took steps to improve profitability. One of those was layoffs in the quarter.
As of Mar 1, 2025, MillerKnoll had cash on hand and availability on its revolving credit facility totaling $468.2 million. It also reduced its long-term debt by $60.7 million the third quarter.
It is also shareholder friendly. It repurchased approximately 0.8 million shares for $17.9 million in the third quarter. It also pays a dividend of $0.75 annually, which is currently yielding 4.3%.
For the fiscal fourth quarter 2025, MillerKnoll guided earnings in the range of $0.46 to $0.52. The Zacks Consensus was looking for $0.77.
The company did provide guidance on costs of tariffs, net of expected mitigation efforts, for the fourth quarter of $0.05 to $0.07. But it provided this guidance on Mar 26, 2025, which was the week before Apr 2, 2025, or Liberation Day, when President Trump revealed the US tariffs.
MillerKnoll said it would provide further updates on tariffs in future quarters.
The full year fiscal 2025 Zacks Consensus Estimate was cut on the light guidance. Zacks.com only has one estimate and it was cut in the last 30 days which moved the Zacks Consensus down to $1.86 from $2.12.
This is an earnings decline of 10.6% as the company made $2.08 in fiscal 2024.
The analyst also cut the estimate for fiscal 2026 at the same time as the Zacks Consensus fell to $2.12 from $2.70. However, that's earnings growth of about 14%.
Shares of MillerKnoll have sold off over the last year, falling 35.4%, but the decline has accelerated in 2025 during the tariff sell-off.
It's down 22.5% year-to-date.
MillerKnoll is cheap, with a forward P/E of 9.3. But it looks like a value trap as the earnings are being cut.
However, MillerKnoll has the two distinct business segments, commercial and consumer, which provides it with diversity. Right now, Global Retail is outperforming but there is a lot of uncertainty out there.
Investors interested in MillerKnoll's great furniture brands might want to stay on the sidelines until there is some certainty about tariffs and the global economy. Keep it on your watch list.
President Trump’s tariffs have disrupted the electric vehicle (EV) market, with Tesla, Inc.’sshares facing bouts of volatility as Elon Musk’s criticism grows. On the other hand, Lucid Group, Inc. has taken advantage of Tesla’s slipups, making the stock seem like a good investment.
Let’s investigate further –
Tesla’s shares have plummeted 45% from their mid-December peak of $488.54, yet Musk holds the title of the wealthiest man on the planet. However, political backlash against him due to his involvement in Trump’s administration and embracing far-right politics in Europe has stained his EV brand’s reputation.
Consequently, Tesla reported a slump of 13% in vehicle sales in the January-March quarter, its worst quarter since 2022. Aging vehicle lineups and stiff competition from peers also contributed to the drop in vehicle sales. Despite a slew of incentives, including zero financing and considerable discounts, Tesla failed to lure potential buyers.
Vehicle sales in Europe took a beating, while its Cybertruck was recalled by the National Highway Traffic Safety Administration in the United States. Car buyers also restrained themselves from buying Tesla’s high-flying Model Y since an upgraded version is anticipated later this year.
Tesla’s woes, including the dearth of new vehicles and discouraging feelings about Elon, led to present Tesla owners and prospective buyers searching for alternate EV makers like Lucid. The company recently witnessed a dramatic surge in orders from Tesla owners, making up nearly half of the EV vehicle orders.
Being a smaller company than Tesla, a minuscule decline in demand for Tesla could greatly benefit Lucid. For instance, if Tesla loses only 1% of its 1.8 million vehicles sold in 2024, it indicates that 18,000 EV buyers are looking for alternatives, which Lucid can target, since it had sold a meager 10,000 vehicles last year.
Lucid aims to sell 20,000 vehicles in 2025, doubling from last year, a bold goal indeed. However, with Lucid mainly acquiring spare parts from the United States, the new wave of tariffs is unlikely to affect them, making the target look feasible.
With Lucid well-poised to scale up its business as car buyers lose faith in Tesla, it is judicious to hold onto the LCID stock for future gains. Brokers, too, are optimistic about Lucid’s growth potential as they raise LCID’s average short-term price target by 11.7% to $2.68 from the previous $2.40. The highest target is set at $5, an upside of 108.3%.
However, not everything is in favor of Lucid. Despite notching revenues of $807.8 million in 2024, the company reported a negative gross profit of $923.1 million. For the quarter ending on Dec. 31, Lucid posted a net loss of $636.9 million or a loss of 22 cents a share on revenues of $234.5 million.
Furthermore, Lucid’s net profit margin is negative 335.9%, whereas the Automotive - Domestic industries are 4.4%, indicating revenues generated from car sales are not enough to cover overhead expenses. The company must increase production to become profitable, and until and unless that happens, new entrants should restrain themselves from placing their bets on LCID stock.
In terms of production, Lucid must manufacture affordable EVs that cater to a wider market and not just rely on its $79,900 Gravity SUV that focuses mainly on niche customers. So far, so good, since Lucid’s first-quarter deliveries beat estimates and outpaced a year ago tally. For now, Lucid has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
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With Lucid well-poised to scale up its business as car buyers lose faith in Tesla, it is judicious to hold onto the LCID stock for future gains. Brokers, too, are optimistic about Lucid’s growth potential as they raise LCID’s average short-term price target by 11.7% to $2.68 from the previous $2.40. The highest target is set at $5, an upside of 108.3%.
However, not everything is in favor of Lucid. Despite notching revenues of $807.8 million in 2024, the company reported a negative gross profit of $923.1 million. For the quarter ending on Dec. 31, Lucid posted a net loss of $636.9 million or a loss of 22 cents a share on revenues of $234.5 million.
Furthermore, Lucid’s net profit margin is negative 335.9%, whereas the Automotive - Domestic industries are 4.4%, indicating revenues generated from car sales are not enough to cover overhead expenses. The company must increase production to become profitable, and until and unless that happens, new entrants should restrain themselves from placing their bets on LCID stock.
In terms of production, Lucid must manufacture affordable EVs that cater to a wider market and not just rely on its $79,900 Gravity SUV that focuses mainly on niche customers. So far, so good, since Lucid’s first-quarter deliveries beat estimates and outpaced a year ago tally. For now, Lucid has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
https://www.zacks.com
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index.Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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