Monday, February 28, 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 salesforce.com, inc. (CRM), General Motors Co. (GM), and Block, Inc. (SQ). 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
salesforce
have underperformed the Zacks Computer – Software industry over the past year (-4.3% vs. +15.3%). However, the Zacks analyst believes that the company will continue to benefit from a robust demand environment as customers undergo 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 the enterprise team collaboration solution space and better compete with Microsoft’s Teams product.
Stiff competition is a concern. Also, unfavorable currency fluctuations along with increasing investments in international expansions and data centers are an overhang on near-term profitability.
(You can
read the full research report on salesforce here >>>
)
Shares of
General Motors
have underperformed the Zacks Automotive – Domestic industry over the past two year period (+51.0% vs. +167.2%), although the company’s hot-selling brands in America like Chevrolet Silverado, GMC Sierra and Equinox are driving its top line.
The Zacks analyst believes that the legacy automaker’s big push toward electric vehicles (EVs) are set to boost prospects further. The company plans to roll out 30 fresh EV models by 2025-end. Key launches including the GMC Hummer EV and Cadillac Lyriq crossover EV offer growth visibility. Its Ultium platform is set to rev up its electrification capabilities; the platform seeks to enable the firm’s achieve leadership in software and services.
General Motors’ dominant position in the self-driving landscape via Cruise also augurs well. Encouragingly, the company envisions automotive FCF of $7-$9 billion in 2022, implying a significant jump from $2.5 billion recorded in 2021.
(You can
read the full research report on General Motors here >>>
)
Shares of
Block
have outperformed the Zacks Internet – Software industry over the past two-year period (+48.5% vs. -16.0%). The Zacks analyst believes that the company is gaining from strong Cash App engagement and its expanding customer base.
Further, rising bitcoin revenues owing to robust Cash App are contributing well to the top-line. Additionally, the company’s strengthening momentum across sellers and online channels, and growing card-not-present GPV are expected to remain tailwinds. Moreover, robust online products, such as Square Online Store, Invoices, Virtual Terminal and eCommerce API are expected to accelerate GPV growth in the near term.
However, uncertainties related to the COVID-19 pandemic remain concerns. Higher investments and increasing product development expenses might hurt margins. Rising competition and foreign exchange headwinds are other matters with which the company deals.
(You can
read the full research report on Block here >>>
)
Other noteworthy reports we are featuring today include Schlumberger Ltd. (SLB), IDEXX Laboratories, Inc. (IDXX) and PG&E Corp. (PCG).
Mark Vickery
Senior Editor
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
Salesforce (CRM) Rides on Partnership Wins & Acquisitions
EV Offerings to Drive General Motors (GM) Amid Cost Woes
Block (SQ) Banks on Solid Cash App Adoption, Bitcoin Growth
Featured Reports
Solid Investments Aid PG&E Corp (PCG) Amid Rising Costs
Per the Zacks analyst, consistent investments boost PG&E Corp’s infrastructure and customer reliability. Yet, the stock is incurring incremental operating costs due to the pandemic.
Ability to Process Wide Crude Mix Aids HollyFrontier (HFC)
The Zacks analyst likes HollyFrontier’s high complexity index, or the capability to process a wide mix of crude, but is worried over the company’s turnaround activities.
Improving Lease Demand Backs Air Lease (AL) Amid Cost Woes
While Air Lease is benefiting from improved lease demand, supported by strong freight and cargo markets, and improved air-travel demand, the Zacks analyst is concerned about the company’s high costs.
Solvency Level Aids, High Costs Hurt United Health (UHS)
Per the Zacks analyst, its strong balance sheet enables business investments which should drive long term growth. However, escalating expenses remain a concern for the company.
Inorganic Initiatives to Aid Franklin (BEN) Amid Cost Woes
Per the Zacks analyst, Franklin’s focus on diversification as well as expansion via acquisitions is encouraging. Yet, higher expenses on technological advancements will likely hurt bottom-line growth.
Robust International Growth Aids IDEXX (IDXX) Amid Forex Woe
The Zacks analyst is impressed with IDEXX Laboratories’ international revenues growth in the fourth quarter on double-digit gain in CAG and Water businesses. Foreign exchange woes remain a concern.
Masco (MAS) Solid Housing Demand Aid Amid Intense Inflation
Per the Zacks analyst, Masco is benefiting from robust U.S. housing market fundamentals and repair & remodeling activities. Yet, supply chain constraints and inflation remain potent headwinds.
New Upgrades
Strong Industrial Markets to Drive Applied Industrial (AIT)
Per the Zacks analyst, strong traction of Applied Industrial’s businesses, fueled by solid demand across industrial machinery, mining, chemicals and technology end markets should drive its revenues.
Schlumberger (SLB) Banks on International Oilfield Services
The Zacks analyst appreciates Schlumberger since the company is expecting handsome growth in oilfield services in international and North American markets.
World Wrestling (WWE) New Content Creation to Lift Revenues
Per the Zacks analyst World Wrestling’s focus on content creation, driving subscriber count, raising content rights fees and monetization of video content across digital and DTC platforms bodes well.
New Downgrades
Ligand’s (LGND) Overdependence on Partners Raises Concern
Per the Zacks analyst, Ligand is highly dependent on its partners for revenues that pays royalties on sales of drugs developed using the company’s Captisol technology.
Supply Woes, Increasing Costs Hurt Universal Display (OLED)
Per the Zacks analyst, Universal Display continues to deal with the pandemic-triggered supply chain challenges along with increasing input material costs, which directly weigh on its bottom line.
Stiff Competition & High Leverage to Hurt Telefonica (TEF)
The Zacks analyst is concerned about Telefonica’s (TEF) exposure to stiff competition in domestic and Latin American markets. Highly leveraged balance sheet is also a major headwind for the firm.
Just Released: Zacks Top 10 Stocks for 2022
In addition to the investment ideas discussed above, would you like to know about our 10 top buy-and-hold tickers for the entirety of 2022?
Last year’s 2021
Zacks Top 10 Stocks
portfolio returned gains as high as +147.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys
Access Zacks Top 10 Stocks for 2022 today >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
