Monday, July 10, 2023
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Alibaba Group Holding Limited (BABA), Medtronic plc (MDT) and Schlumberger Limited (SLB). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
Shares of Alibaba have gained +2.8% over the year-to-date period against the Zacks Internet - Commerce industry’s gain of +31.9%. The company’s solid momentum across the international commerce retail businesses is driving its top-line growth. Strength in Trendyol, Lazada and AliExpress continues to contribute well.
Additionally, solid momentum across financial services, education and automobile industries remains a positive for the company’s cloud business. This apart, strength across the local consumer services and Cainiao logistics services, Alibaba Health and Freshippo is contributing well.
However, uncertainties associated with coronavirus pandemic remain major concerns, especially for Alibaba’s domestic businesses. Sluggish China commerce business is a concern. Additionally, softness in digital media business is a headwind. Rising expenses associated with new initiatives are overhangs.
(You can read the full research report on Alibaba here >>>)
Medtronic shares have outperformed the Zacks Medical - Products industry over the past six months (+8.7% vs. +1.5%). The company is strategically expanding its global presence to address the unmet demand for advanced medical technologies.
Within Cardiovascular, Medtronic is gaining market share, banking on product launches. Within MedSurg, Medtronic is scaling production of Hugo RAS. Innovations and market expansion efforts are helping it offset the impact of the inflation and supply disruptions.
However, Medtronic’s strong liquidity position should allow it to meet its near-term debt obligations. All these factors support our bullish stance on the stock.
(You can read the full research report on Medtronic here >>>)
Shares of Schlumberger have outperformed the Zacks Oil and Gas - Field Services industry over the past year (+62.8% vs. +44.3%). The company is a well-known name for providing diversified oilfield services and products to companies belonging to the energy sector. Being the leading provider of technology for complex oilfields, the firm is well-poised to take up new offshore projects in international markets.
SLB expects upstream spending across the globe to continue growing, which in turn could increase demand for well completion activities. With broad-based growth in overall activities, SLB expects to benefit from increased service pricing.
However, the cost of revenue continues to rise, affecting its income statement. Moreover, declining operating cashflows is a concern. Also, the aggressive capital budget remains a headwind for the company. SLB’s overall business is highly vulnerable to extreme commodity price volatility. As such, the stock warrants a cautious stance.
(You can read the full research report on Schlumberger here >>>)
Other noteworthy reports we are featuring today include Cisco Systems, Inc. (CSCO), Zoetis Inc. (ZTS) and Moody's Corporation (MCO).
Director of Research
Sheraz Mian
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today's Must Read
Strength in International Business Benefits Alibaba (BABA)
Medtronic (MDT) Gains in Market Share, Global Growth Robust
SLB (SLB) Continues to Bank on Its Well Completion Works
Featured Reports
America Movil (AMX) Benefits from Increasing Subscriber Base
Per the Zacks analyst, America Movil's performance is gaining from increasing broadband client base. Focused 5G efforts and the deployment of advanced technologies are other tailwinds
Diverse Production Mix to Aid Canadian Natural (CNQ)
The Zacks analyst sees Canadian Natural's diverse production mix facilitating long-term value and reducing risk profile but is worried about the company's debt maturities each year out till 2027.
United (UAL) Soars on Rosy Air Travel Demand Amid High Cost
Upbeat air-travel demand is driving United Airlines' top line. The Zacks analyst is, however, worried about escalated fuel costs that are limiting bottom-line growth.
Solid U.S Demand to Aid Commercial Metals (CMC), Europe Ails
Per the Zacks analyst, robust demand and order backlogs in North America is aiding Commercial Metals results. However, demand in Europe is down owing to market volatility.
Investment on Infrastructure & Clean Assets Aid Evergy (EVRG)
Per the Zacks analyst, Evergy's investment of $11.6B through 2027 to add clean sources to generate electricity, strengthen infrastructure to serve customers will boost its profitability.
Caplyta boosts Intra-Cellular (ITCI), Overdependence a Woe
Per the Zacks Analyst, the increased prescription trends of Caplyta are expected to drive revenues in the quarters ahead. However, a lean pipeline is proving to be a burden on Caplyta.
Acquisitions, Cost Cuts to Drive Greif's (GEF) Results
Per the Zacks analyst, Greif is poised to gain from its ongoing cost rationalization measures, strong and diverse product portfolio as well as recent acquisitions.
New Upgrades
TopBuild (BLD) Benefits From Buyout Synergies, Pricing Moves
Per the Zacks analyst, solid acquisitions and pricing actions are a vital part of TopBuild's growth strategy as they supplement organic growth and expand markets and product.
Mohawk (MHK) Banks on Solid Buyouts & Strategic Initiatives
Per the Zacks analyst, solid accretive acquisitions, strategic business initiatives and strong global presence aid Mohawk. Also, favorable pricing and product mix bode well for the company.
Treehouse Foods (THS) to Benefit From Strong Product Demand
Per the Zacks analyst, the impressive performance of Treehouse Foods' food and beverage business, fueled by strong demand across snacking and beverage categories, will continue to lend momentum to it.
New Downgrades
Flowers Foods (FLO) Remains Troubled by Increasing Costs
Per the Zacks analyst, Flowers Foods is seeing higher cost inflation. In first-quarter its materials, supplies, labor and other production costs rose by 170 basis points and the gross margin fell.
Allstate (ALL) Weak on Higher Cat Loss & Elevated Debt Load
Per the Zacks analyst, exposure to catastrophic events continues to dent underwriting profitability. Rising debts remain a concern as it leads to escalated interest expenses.
Rising Expenses to Hurt Prosperity Bancshares' (PB) Profits
Per the Zacks analyst, Prosperity Bancshares' efforts to invest in franchise will keep costs elevated, thus hurting profits. Uncertainty about the performance of the mortgage business is another woe.
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