For Immediate Release
Chicago, IL – October 22, 2026 – Zacks Equity Research shares Penguin Solutions PENG as the Bull of the Day and Manpower Group MAN as the Bear of the Day. In addition, Zacks Equity Research provides analysis on BYD Company Ltd. BYDDY, XPeng Inc. XPEV and NIO Inc. NIO.
Here is a synopsis of all five stocks.
Bull of the Day:
Penguin Solutions is a Zack Rank #1 (Strong Buy) that designs, builds, deploys and manages high-performance AI infrastructure for enterprises and NeoCloud providers.
Penguin has pulled back after the stock surged after a solid earnings report. Sector news has the stock under pressure, but this could be the right time for investors to enter following a breakout fiscal fourth quarter.
About the Company
Penguin operates three segments: Advanced Computing, Integrated Memory and Optimized LED. Its AI Factory Platform pairs hardware with Clusterware software and long-term managed services, giving customers a single partner from design through 24/7 operations.
The company is valued at $3 billion and has a Forward PE of 12. The stock has Zacks Style Scores of “C” in Value, “F” in Growth, and “A” in Momentum.
Earnings Take Flight
PENG reported fiscal Q4 EPS of $1.00 on October 6, more than double the $0.43 posted a year ago. Revenue jumped 68% to $567 million from $338 million. Adjusted EBITDA more than doubled to $93 million.
Management said performance accelerated sharply in the second half of fiscal 2026 after the launch of its AI Factory Platform and a sharper focus on data center demand. Gross margin dipped to 28.8% from 30.9% as hardware mix rose, but operating leverage more than made up for it.
Raised Guidance
The real story was the outlook as Penguin raised its fiscal 2027 view well above the preliminary 30% growth forecast it gave last quarter. The company now sees net sales of about $2.43 billion at the midpoint, up 40% plus or minus 10 points.
EPS is guided to $4.45, up 55% at the midpoint, as profits grow faster than sales.The upgrade was led by Advanced Computing, now expected to grow 40%, sharply above the prior mid-teens view.
Management credited stronger than expected bookings over the past 90 days and an accelerating NeoCloud pipeline, with most highlighted projects already in deployment, operations or procurement. Integrated Memory is expected to grow 50%, with backlog now exceeding record quarterly revenue and extending at least four quarters. Both volume and pricing are rising.
Estimates Are Soaring
Analysts moved quickly, raising estimates.
The fiscal 2027 Zacks Consensus Estimate jumped from $3.40 to $4.70 over the past 30 days, a 38% increase that now sits above the top of management’s midpoint. The current quarter estimate climbed 39% to $1.06, while next quarter rose 27% to $1.08.
Every revision over the past 60 days has been higher.
Looking further out, the fiscal 2028 consensus of $5.43 points to another 16% growth on top of this year’s jump.
Penguin Solutions, Inc. price-consensus-eps-surprise-chart | Penguin Solutions, Inc. Quote
Goldman Sachs and Stifel both reiterated Buy ratings and lifted price targets to $85 from $75. Even the lone bear at Barclays raised its target to $60 from $40.
The Technical Take
After earnings the stock shot higher, going from $60 to $80. But negative new in the neocloud space, specifically CoreWeave, pushed the whole sector lower. This caused PENG to give up all of the post earnings gains.
The stock filled the gap and fell below the 50-day and found some footing. This is a very volatile name so let’s look at those moving averages:
21-day: $62
50-day: $56.50
200-day: $43
A move back over the 21-day MA would signal short-term bullishness has come back. The next level would be Fibonacci resistance at $70, which would have to break to push to all-time highs.
In Summary
PENG just delivered its strongest quarter in years, raised guidance well beyond its own preliminary view and sparked a wave of upward estimate revisions. With NeoCloud bookings accelerating, a memory backlog stretching a year out and the stock pulling back off its highs, investors get a second chance at an AI infrastructure name with real momentum.
Bear of the Day:
Manpower Group, a Zacks Rank #5 (Strong Sell), is one of the world’s largest workforce solutions companies.
The stock fell roughly 15% after its third quarter report on October 15, and investors might want to stay cautious as analysts continue to cut estimates.
About the Company
ManpowerGroup operates through its Manpower staffing brand, Experis IT staffing and Talent Solutions, which includes recruitment outsourcing, managed services and Right Management outplacement. Its results track hiring activity closely, making it a bellwether for labor demand in the U.S. and Europe.
The company is valued at $2 billion and has a forward PE of 12. The stock has Zacks Style Scores of “B” in Value, “D” in Growth, and “A” in Momentum.
A Rally Built on Hope and Earnings Disappointment
MAN entered October up more than 45% in 2026 as investors bet on a turnaround in global staffing demand. Management fed that narrative, calling 2026 an inflection point for the business. The third quarter showed the recovery is real, but not as fast as the stock had priced in, and shares fell roughly 15% on the report.
Adjusted EPS came in at $1.01, matching the consensus estimate. Revenue rose 4% to $4.84 billion but missed the $4.91 billion estimate. Gross margin slipped to 15.9% from 16.1% in the prior quarter.
The Americas grew 11.5% in constant currency, but Southern Europe managed just 2.1%, and revenue in France fell 2%. Permanent recruitment was softer than expected, notably in France. Right Management, one of the company’s highest margin businesses, saw its revenue decline deepen as layoff activity slowed, cutting into profitability.
Weak Guidance
ManpowerGroup guided fourth quarter EPS to $1.03 to $1.13, with the $1.08 midpoint below the $1.10 consensus. Revenue is expected to grow just 3% to 7% in constant currency.
Management blamed tougher comparisons, but U.S. growth is expected to slow to the mid-single digits from 9% in the third quarter. The guidance also assumes a steep 44% tax rate and a stable December manufacturing environment, leaving little room for error if year-end shutdowns run larger than usual.
Estimates Are Falling
Analysts have moved quickly in one direction. Over the past week, there were three downward revisions to the fourth quarter estimate and three to 2027, with no increases to either.
The biggest cut came to the first quarter of 2027, where the consensus fell 16% to $0.68 from $0.81. The 2027 Zacks Consensus Estimate dropped to $4.86 from $5.11, a 5% decline.
Even after that cut, the Street is still looking for 35% EPS growth next year, a high bar for a company guiding to mid-single digit revenue growth.
Cash and Leadership Questions
The company posted a $17 million free cash flow outflow in the third quarter, which management attributed to payment timing. It has also shelved share buybacks for now to focus on strengthening the balance sheet.
On top of that, ManpowerGroup is changing leaders mid-turnaround. Becky Frankowitz takes over as CEO on January 1, 2027, with Jonas Prising moving to Executive Chair. She plans to push the transformation “faster and deeper,” but new leadership adds execution risk at a delicate point.
The Technical Take
The stock fell to the 200-day MA and found buyers, but this move lower erased the summer optimism. The stock will likely play around that moving average for the foreseeable future and consolidate until the next catalyst.
However, if that $39 level were to break, we could fall to levels seen earlier in the year, around $30 a share.
In Summary
ManpowerGroup’s recovery is moving, but a revenue miss, a below-consensus guide and falling estimates show it is not moving fast enough to justify this year’s run. With profitable segments shrinking, buybacks on hold and a CEO change coming, investors may want to wait for clearer proof before stepping in.
Additional content:
China-EU Hybrid Import Deal Eases Trade Tensions, Risks Remain
China and the European Union (“EU”) have reached an agreement to limit hybrid vehicle imports into the bloc to ease trade tensions and address concerns over growing Chinese automotive exports. The agreement will cap annual hybrid vehicle imports at 350,000 units in the first year, with the quota potentially taking effect Dec. 1, 2026. The deal could offer some relief to European automakers facing intensifying competition from Chinese manufacturers, while requiring the latter to reassess their export strategies.
EU Sets Limits on Hybrid Vehicle Imports
EU Trade Commissioner Maroš Šefcovic and Chinese Commerce Minister Wang Wentao reached an understanding covering 16 areas, including hybrid vehicle exports, trade and investment, export controls and intellectual property rights, per Reuters.
Under the agreement, the EU will cap hybrid vehicle imports at 350,000 units in the first year. The quota will increase 6% annually from the second year and remain in place for four years. The restrictions will apply to hybrid vehicles imported from different countries to comply with the World Trade Organization's non-discrimination principle.
The agreement aims to prevent an immediate escalation in trade tensions between the two economic powers and reflects market relief that the two sides reached an understanding.
Trade Tensions Ease, Structural Differences Remain
The agreement provides a framework for managing automotive trade disputes, but broader disagreements over industrial subsidies, market access and trade imbalances remain unresolved. Concerns about China's manufacturing capacity and the competitive pressure on domestic producers is alarming, while Beijing is seeking to preserve access to important export markets.
China's position in the global rare earth supply chain also remains relevant to the broader trade relationship. Restrictions on rare earth exports could complicate European efforts to expand automotive and other advanced manufacturing industries.
The agreement therefore represents a step toward containing immediate trade friction rather than resolving the underlying differences between China and the EU. European automakers could gain some protection from rising hybrid imports, while Chinese manufacturers may need to adapt their production and export strategies. The longer-term impact will depend on how the quota is implemented and whether both sides can make progress on their broader trade disagreements.
Potential Impact on Chinese Automakers Expanding in Europe
The agreement could reshape how Chinese automakers approach the European market, particularly as they seek to expand overseas sales amid intensifying competition and trade uncertainty. While the hybrid import quota directly affects manufacturers exporting eligible vehicles to the EU, its impact will vary depending on each company's powertrain mix, production footprint and reliance on China-based exports.
BYD Company Ltd. could face greater pressure because their portfolios include plug-in hybrid electric vehicles (PHEVs), alongside battery electric vehicles (BEVs). The quota could constrain growth in China-built hybrid exports, potentially encouraging both companies to adjust their product mix, expand local production or strengthen European partnerships. In contrast, XPeng Inc. and NIO Inc. could face relatively limited direct exposure because their passenger vehicle portfolios are primarily focused on BEVs. However, broader trade restrictions and regulatory uncertainty could complicate their European expansion plans.
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