Thursday, December 29, 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 ServiceNow, Inc. (NOW), Schlumberger Limited (SLB) and MetLife, Inc. (MET). 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
ServiceNow
have lagged the Zacks Tech sector (-40.7% vs. -39.1%) and the S&P 500 index (-40.7% vs. -22.3%) over the past year. Negative sentiment on the stock and other ‘growthy’ Tech stocks in the wake of the Fed’s extraordinary tightening cycle is the primary reason for its underperformance. The Zacks analyst has also flagged high inflation, unfavorable forex and challenging macro-economic environment, in addition to stiff competition, as some of the other headwinds.
However, ServiceNow did benefit from robust growth in subscription revenues as reflected by the strong third-quarter 2022 results. The company is riding on the increasing adoption of its workflows by enterprises undergoing digital transformation. Further, its expanding global presence, solid partner base and strategic buyouts are expected to bolster growth prospects. Strategic alliances with the likes of Microsoft remain tailwinds.
(You can
read the full research report on ServiceNow here >>>
)
Schlumberger
shares have outperformed the Zacks Oil and Gas – Field Services industry over the past year (+76.4% vs. +56.1%). The Zacks analyst believes that, Schlumberger, being the leading provider of technology for complex oilfields, is well-poised to take up new offshore projects in international markets. The significant increase in oil prices is aiding its overall business. Increased participation in growth of drilling and completion activities across the world brightened the company’s outlook.
Also, it boasts of becoming the first company in the energy service industry to add Scope 3 emissions ambition in the net-zero emission target. However, the company’s balance sheet has massive debt exposure compared with the composite stocks in the industry. Also, the aggressive capital spending budget remains a headwind for the company.
(You can
read the full research report on Schlumberger here >>>
)
Shares of
MetLife
have outperformed the Zacks Insurance – Multi line industry over the past year (+14.8% vs. -1.1%). The Zacks analyst believes that MetLife continues to be driven by growing premiums, an ongoing expense discipline and the benefits of its diverse set of market-leading businesses and capabilities.
Several accretive acquisitions led to business diversification and solidified inorganic growth for the company. It resorts to partnerships for strengthening its capabilities and global presence. Business streamlining has aligned MET with high-growth operations. Its strong balance sheet supports shareholder value-boosting efforts.
However, reduced variable investment income might raise concerns. The continued incidence of COVID-related mortality claims continues to bother the Group Benefits business. Constant pressure on the EMEA segment’s earnings is worrisome.
(You can
read the full research report on MetLife here >>>
)
Other noteworthy reports we are featuring today include Fortinet, Inc. (FTNT), Marriott International, Inc. (MAR) and Shopify Inc. (SHOP).
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
Growing Customer Base & Partnerships Aid ServiceNow (NOW)
Schlumberger (SLB) to Gain on Rising Oilfield Service Demand
Acquisitions & Cost-Cutting Initiatives Aid MetLife (MET)
Featured Reports
Marriott (MAR) Banks on Expansion Initiatives, RevPAR Dismal
Per the Zacks analyst, Marriott’s focus on expansion, digital innovation and the loyalty program bode well. However, constrained revenue per available room (RevPAR) in Greater China remains a concern.
Denali (DNLI) Pipeline Progress Impressive, Competition Stiff
Per the Zacks analyst, Denali’s pipeline progress is impressive and the strategic collaborations bode well. However, competition is stiff. Most of its candidates are years away from commercialization.
Investments Bolster ConEd (ED), Poor Financials to Hurt
Per the Zacks analyst, solid investments aid Consolidated Edison’s (ConEd) infrastructural development. Yet financial distress faced by its customers might hurt the stock’s future earnings
Air Lease (AL) Benefits From Fleet Growth Amid Rising Costs
The Zacks analyst is impressed with the fact that constant fleet growth is aiding Air Lease’s (AL) top line. However, rising operating expenses might weigh on its bottom line.
Water Infrastructure Unit Backs Xylem (XYL) Amid Forex Woes
The Zacks analyst is encouraged by strength in Xylem’s Water Infrastructure unit due to robust transport demand in Western Europe. However, foreign currency headwinds are weighing on sales.
Rising Rates Support BNY Mellon (BK), High Costs A Concern
Per the Zacks analyst, global footprint, rising interest rates and strong balance sheet are likely to keep aiding BNY Mellon amid higher expenses, the current bearish markets and recessionary fears.
Product Rollouts & Growing Merchant Base Aid Shopify (SHOP)
Per the Zacks analyst, Shopify is benefiting from products like Shopify Shipping, Shopify Payments and Shopify Capital solutions. New merchant friendly applications are also driving growth.
New Upgrades
Fortinet (FTNT) Rides on Product Strength, Marketing Efforts
Per the Zacks analyst, Fortinet is gaining from solid contributions of its growth-oriented products Security Fabric, cloud and SD-WAN. Increasing marketing efforts are also a positive.
New Products & Acquisitions Aid Blackbaud’s (BLKB) Performance
Per the Zacks analyst, Blackbaud’s performance is gaining from frequent product launches and increasing customer renewal rates. Synergies from recent acquisitions also bode well.
Owl Rock (ORCC) to Grow on Buyouts & Diversified Portfolio
Per the Zacks analyst, Owl Rock’s strategic buyouts will generate substantial additional credit resources. Also, its diversified portfolio will ensure growth even in tough times.
New Downgrades
Soft Comps Performance to Hurt Children’s Place (PLCE) Sales
Per the Zacks analyst, soft comparable retail sales performance may hurt Children’s Place sales. The company expects a low-teens percent decline in comparable retail sales in the fourth quarter.
Forex Woes, Stiff Rivalry Hurt Syneos Health’s (SYNH) Growth
The Zacks analyst is worried about unfavorable foreign currency translation impacting Syneos Health’s Clinical Solutions segment revenues. Stiff rivalry also remains a concern.
A Volatile Energy Market Impairs Integer Holdings (ITGR)
The Zacks analyst is worried about dependence of Integer Holdings’ product sales in a significantly fluctuating energy market. Stiff competition across all of its product lines is an added woe.
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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