Wednesday, April 27, 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 Tesla, Inc. (TSLA), Medtronic plc (MDT), and IBM Corp. (IBM). 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
Tesla
have outperformed the Zacks Automotive – Domestic industry over the past year (+30.6% vs. -9.7%). Despite severe chip shortages, Tesla put up an impressive Q1 show, beating both top-and bottom-line expectations, thanks to stellar deliveries of Models 3 and Y.
The Zacks analyst believes that the deliveries will see an annualized growth of around 50% over the next three years. Ex-government credits, Tesla’s gross margins reached 30% in Q1. This indicates that the supply-chain issues hitting the company are being passed along to the consumer.
Additionally, Tesla’s energy generation and storage revenues outlook is promising. While low Q2 deliveries from the Shanghai gigafactory could be a short-term headwind, we expect Tesla to deliver outsized returns in the long run on the back of production ramp-up and introduction of new models.
(You can
read the full research report on Tesla here >>>
)
Shares of
Medtronic
have outperformed the Zacks Medical – Products industry over the year-to-date basis (+4.4% vs. -14.6%). The company has registered organic growth in the Cardiovascular, Neuroscience and Diabetes segments. The company claims share gains in 60% of its businesses.
However, the sluggish top-line results reflect the unfavorable market impact of COVID-19 and health system labor shortages. CRDN sales decreased in the mid-single digits, given the impact of COVID-19 on PCI procedures. Also, there have been low double-digit organic declines in RGR with sales of ventilators declining in the high-fifties as demand returns to pre-pandemic levels.
(You can
read the full research report on Medtronic here >>>
)
Shares of
IBM
have outperformed the Zacks Computer – Integrated Systems industry over the past year (+4.4% vs. -5.2%). The Zacks analyst believes that the company is poised to benefit from strong demand for hybrid cloud and AI, driving growth in Software and Consulting.
Synergies from the Red Hat buyout are bolstering its competitive position in the hybrid cloud market. It is likely to gain from the robust adoption and broad-based availability of IBM Blockchain World Wire a blockchain-driven global payments network aimed at accelerating and optimizing cross-border payments.
However, stiff competition in the cloud computing market like Amazon Web Services and Microsoft Azure remains an overhang. Higher debt levels amid extensive restructuring activities pose a concern. High integration risk from continuous acquisition spree is another headwind.
(You can
read the full research report on IBM here >>>
)
Other noteworthy reports we are featuring today include Lowe’s Companies, Inc. (LOW), Lockheed Martin Corp. (LMT), and Intuitive Surgical, Inc. (ISRG).
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
Tesla (TSLA) Rides High on Robust Deliveries and Margins
Medtronic (MDT) Grows Internationally Despite Forex Woes
IBM to Benefit From Strong Demand for Hybrid Cloud and AI
Featured Reports
Lowe’s (LOW) Digital & Pro Businesses Appear Encouraging
Per the Zacks analyst, Lowe’s is committed toward enhancing the Pro offerings, investing in omni-channel capabilities & expanding the company’s market share. In the fourth quarter, pro sales rose 23%.
Order Growth Boosts Lockheed (LMT), Tiff With Turkey Ails
Per the Zacks analyst, steady order flow continues to boost Lockheed’s revenue growth. Yet, the U.S. government’s tiff with Turkey over its involvement in Russia’s S-400 may hurt F-35 program.
da Vinci Aids Intuitive Surgical (ISRG) Amid Margin Pressure
Per the Zacks analyst, strength in Intuitive Surgical’s robot-based da Vinci surgical system, backed by procedural growth, boosts company’s growth prospects. But contraction in margins raise concern.
Diverse Production Mix Aids Canadian Natural (CNQ)
The Zacks analyst believes that Canadian Natural’s diverse production mix of synthetic oil, heavy crude oil, natural gas and light crude oil facilitates long-term value and reduces risk profile.
Solid Gaming Portfolio Aids Activision’s (ATVI) Prospects
Per the Zacks analyst, Activision’s top line is expected to benefit from a burgeoning user base on the back of a sturdy gaming portfolio and e-sports endeavors.
Dow (DOW) Gains on Cost Actions, Project Investment
According to the Zacks analyst, Dow is well placed to benefit from cost synergy savings and productivity initiatives and its investment in high-return growth projects.n
Passenger Revenues Lift American Airlines (AAL), Costs Hurt
The Zacks analyst is impressed with buoyant air-travel demand, which is aiding passenger revenues. High fuel costs are, however concerning.
New Upgrades
Kinder Morgan (KMI) to Benefit From Rising Demand for RNG
The Zacks analyst is upbeat about Kinder Morgan’s huge growth potential in the RNG business as the North American RNG demand is expected to significantly rise in the next two decades.
EQT Corp. (EQT) Banks on Gas-Rich Marcellus Shale Play
The Zacks analyst likes EQT Corporation since the leading independent natural gas production company has a strong footprint in the prolific Marcellus shale play.
Solid Underwriting, Capital Deployment Aid RLI Corp (RLI)
Per the Zacks analyst, RLI’s solid portfolio, business expansion, rate rise, expanded distribution and operational strength drives profitability, in turn supports dividend hikes, special dividends.
New Downgrades
AT&T (T) Plagued by Huge Debt, Dwindling Legacy Services
Per the Zacks analyst, AT&T is struggling with a steady decline in legacy telephony Internet and wireline services and appears to be under pressure to meet its financial obligations with a huge debt.
Rising Material Cost Hurts IPG Photonics’ (IPGP) Prospects
Per the Zacks analyst, IPG Photonics is suffering from inflationary pressure on input costs. Increasing lead time for certain components is a significant headwind.
Margin Pressure, Elevated Costs Hurt Hilltop Holdings (HTH)
Per the Zacks analyst, despite the expected rate hikes, Hilltop Holdings might continue to witness pressure on margins in the near term due to relatively lower rates. Higher costs might hurt profits.
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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