Friday, July 22, 2022
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 Visa Inc. (V), Abbott Laboratories (ABT) and Salesforce, Inc. (CRM). 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 >>>
Visa
shares are down -2% in the year-to-date period, outperforming Mastercard’s -5.2% decline and the S&P 500 index’s -22.7% drop. Driving this positive outperformance is the company’s favorable long-term growth outlook, which reflects a combination of attractive buyouts and alliances and investments in technology.
A shift in payments to the digital mode is a boon. The coronavirus vaccine rollouts and the gradual revival of consumer confidence will keep driving spending, expanding business volumes in turn. Backed by its strong cash position, it remains committed to boost its shareholder value. Its balance sheet strength is commendable.
However, high operating expenses stress the margins. Ramped-up client incentives will dent the top line. Its declining cash volume from the Asia Pacific bothers. Its volumes will likely suffer due to the Russia-Ukraine situation.
(You can
read the full research report on Visa here >>>
)
Abbott
shares have declined -10.1% over the past year against the Zacks Medical sector’s decline of -17.5% and the S&P 500 index’s -16.9% pullback.
While Abbott is faced with the negative repercussions of a voluntary recall of certain powder formulae produced at one of its U.S. plants, it remins well positioned for
robust organic sales growth across core operating segments, barring Nutrition.
The Diabetes Care business should continue to benefit from the growing sales of sensor-based continuous glucose monitoring system, FreeStyle Libre. The zacks analyst is particularly upbeat about the receipt of FDA clearance for the company’s FreeStyle Libre 3 system in May 2022. Over the past year,
(You can
read the full research report on Abbott here >>>
)
Salesforce
shares have enjoyed a nice bounce back in recent days, but the stock is still down -28.5% in the year-to-date period vs. -38.8% for the Zacks Tech sector and -22.7% for the S&P 500 index. The biggest worry weighing on the stock is uncertainty about technology spending that remains a headwind for the entire software group in the current uncertain macro backdrop. Also weighing on near-term profitability are
unfavorable currency fluctuations and increasing investments in international expansions and data centers.
However, the company is benefiting from a robust demand environment as customers are undergoing a major digital transformation. The rapid adoption of its cloud-based solutions is driving demand for its products. Salesforce’s sustained focus on introducing more aligned products as per customer needs is driving its top-line.
Continued deal wins in the international market is another growth driver. Furthermore, the recent acquisition of Slack would position the company to be a leader in enterprise team collaboration solution space and better compete with Microsoft’s Teams product
(You can
read the full research report on Salesforce here >>>
)
Other noteworthy reports we are featuring today include Wells Fargo & Company (WFC), Intuit Inc. (INTU), and Centene Corporation (CNC).
Sheraz Mian
Director of Research
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
Visa (V) Banks on Renewed Agreements, Rising Costs Hurt
Organic Sales Gain, Rise in Fiscal View Aid Abbott (ABT)
Digital Transformation and Acquisitions Aid Salesforce (CRM)
Featured Reports
Cost Control Aids Wells Fargo (WFC) Amid Declining Revenues
Per the Zacks analyst, Wells Fargo’s cost-saving measures like branch closures and headcount reduction will help offset falling revenue trends due to business divestures and volatile fee income.
Intuit (INTU) Rides on Product Refresh, Higher Subscriptions
Per the Zacks analyst, Intuit is benefiting from frequent product refreshes, which help it to gain customers. Moreover, increase in subscriptions is driving stable revenue growth for the company.
Centene (CNC) Rides on Growing Revenues Amid Rising Costs
Per the Zacks analyst, solid Medicaid business, several contract wins and acquisitions continue to drive the company’s revenues. However, elevated expenses remain a concern.
General Mills (GIS) Gains From Focus on Accelerate Strategy
Per the Zacks analyst, General Mills is gaining from its Accelerate strategy, as part of which it is competing efficiently via brand building, investing in saving initiatives and reshaping portfolio.
Cost Management & Regulated investment Aid Exelon (EXC)
Per the Zacks analyst Exelon’s cost management initiatives will have positive impact on margins and its planned $29B investments through 2025 will strengthen its operation.
Biogen’s (BIIB) Upcoming Product Launches May Revive Growth
The Zacks analyst says that potential new product launches like lecanemab, zuranolone and additional biosimilars can help revive growth at Biogen, which is facing multiple challenges at present.
Nokia (NOK) Rides on Healthy Demand Trends, 5G Traction
Per the Zacks analyst, Nokia is poised to benefit from the increasing demand for next-generation connectivity as it aims to accelerate product roadmaps and cost competitiveness through 5G investments.
New Upgrades
Technology, DARTs, High Rates Aid Interactive Brokers (IBKR)
Per the Zacks analyst, Interactive Brokers’ focus on developing of proprietary software have resulted in higher revenues and daily average revenue trades (DARTs). Rising rates will aid the top line.
Reliable Assets, Free Cash Flow Plan Aid CNX Resources (CNX)
Per the Zacks analyst CNX Resources’ Marcellus and Utica shales assets will continue to boost production and long-term plan to generate $3.3 billion free cash flow will help to fortify balance sheet.
Higher Gas Processing Capacities to Aid Crestwood (CEQP)
The Zacks analyst likes Crestwood since the master limited partnership has entered into highly synergetic transactions that will boost its natural gas processing capabilities in Delaware.
New Downgrades
Low Commodity Prices & High Expenses to Hurt Wheaton (WPM)
The Zacks Analyst is concerned that decline in the commodity prices as well as higher expenses related to mine exploration, development and acquisitions will impact Wheaton’s results.
Elevated Costs to Hurt DICK’S Sporting’s (DKS) Gross Margin
Per the Zacks analyst, DICK’S Sporting witnesses soft gross margin trend on elevated supply chain costs, rising occupancy costs and the current geopolitical issues. This is likely to persist in 2022.
Inflationary Pressures Hurt BJ’s Restaurants (BJRI) Prospects
Per the Zacks analyst, BJ’s Restaurants has been witnessing elevated costs owing to higher inflation in food and labor costs. Also, decline in traffic from pre-pandemic levels is a concern.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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