Thursday, May 26, 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), The Procter & Gamble Company (PG), and Bristol-Myers Squibb Company (BMY). 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 (+4.4% vs. -24.6%) though the stock has been under pressure lately on market worries that Elon Musk’s Twitter purchase will distract him from giving his full attention to his ‘day job’. That said, despite severe chip shortage, the company has 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 deliveries to 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. However, 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
Procter & Gamble
have outperformed the Zacks Soap and Cleaning Materials industry over the past year (+10.1% vs. -2.0%). The company reported earnings surprise for more than three years, revenues beat estimates for the eighth straight time in the quarter. Results were driven by improved productivity amid cost headwinds, along with the rising demand for cleaning products. Gains from cost productivity also aided results. Management lifted its fiscal 2022 view. It witnessed SG&A expense leverage, owing to savings from overhead and marketing expenses, and cost leverage gains due to higher sales and real estate.
However, The Zacks analyst believes unfavorable mix, commodity cost inflation, increase in freight costs, product and packaging investments and other impacts hurt margins. It expects higher commodity and freight costs to persist in fiscal 2022.
(You can
read the full research report on Procter & Gamble here >>>
)
Shares of
Bristol-Myers Squibb
have outperformed the Zacks Medical – Biomedical and Genetics industry over the past year (+21.3% vs. -37.8%). The company’s performance in the first quarter of 2022 was decent with earnings and sales beating estimates. The approval of new drugs adds a new stream of revenues, which should boost growth in the coming quarters. The pipeline progress has been impressive and strategic collaborations will further expand the portfolio.
Eliquis is the leading oral anticoagulant drug and continues to experience growth in its market share. The label expansion of Opdivo into indications of lung cancer, renal cancer and gastric cancer boosted sales. However, One of the top revenue generators Revlimid is facing generics soon, which will adversely impact sales. Lowering of guidance by the company was also disappointing.
(You can
read the full research report on Bristol-Myers Squibb here >>>
)
Other noteworthy reports we are featuring today include Wells Fargo & Company (WFC), American Express Company (AXP), and Intuit Inc. (INTU).
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
Tesla (TSLA) Rides on Robust Deliveries & Margins
High Demand & Productivity Plan Drives P&G’s (PG) Growth
Eliquis, Opdivo Fuel Bristol-Myers (BMY), Revlimid Faces Heat
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.
Robust Revenues & Cash Flows Aid American Express (AXP)
Per the Zacks analyst, rebounding economic recovery and increased consumer spending are likely to contribute to the top line. Also, robust cash flows have enabled investments in the business.
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.
Marsh & McLennan (MMC) Strategic Buyouts Aid, Expenses High
Per the Zacks analyst, a number of acquisitions help Marsh & McLennan expand geographically, and diversify its portfolio. Yet, escalating expenses continue to weigh down margins.
New Customers to Drive TELUS (TU) Amid High Leverage
Per the Zacks analyst, Telus’ rising customer base is augmenting its fiber footprint, thereby boosting its top line. However, stiff competition and the firm’s high leverage remain concerns .
Waste Connections (WCN) Benefits From Acquisitions, Debt Ails
Waste Connections’ (WCN) top line benefits from favorable impact of acquisition revenues. The Zacks analyst is, however, worried about its debt-laden balance sheet.
Pharmaceutical Distribution Unit Aids AmerisourceBergen (ABC)
Per the Zacks analyst, robust Pharmaceutical Distribution business, driven by higher volume and expanding customer base, continues to aid AmerisourceBergen. But higher operating expenses is a woe.
New Upgrades
Suncor (SU) to Benefit from Strong Liquidity Position
The Zacks analyst likes Suncor’s strong financial position. The company has debt maturities of a mere C$1.8 billion during 2021-2022 and sits on more than C$4 billion in total liquidity.
Pool Corp (POOL) Rides on Capacity Creation Initiatives
Per the Zacks analyst, Pool Corp is likely to have benefitted from solid demand, healthy contractor backlogs and capacity-creation initiatives. Also, focus on expansions through acquisitions bode well
Whiting (WLL) to Gain from Improving Well Economics
The Zacks analyst likes Whiting Petroleum’s improvement in well economics as the company continues to achieve significant reductions in its spud-to-total-depth time and well costs.
New Downgrades
International Exposure & Old Facilities Ail NRG Energy (NRG)
Per the Zacks analyst, NRG Energy’s international operations expose it to political and economic risks and some of its old facilities create a competitive disadvantage against its peers.
Cost Woes & Shrinking Vehicle Production Ail Autoliv (ALV)
The Zacks Analyst is concerned that reduced light vehicle production will clip Autoliv’s sales. Commodity cost inflation, increasing R&D costs coupled with adverse forex may clip the firm’s margins.
Chip Woes, High Commodity & R&D Costs Hurt Adient (ADNT)
The Zacks Analyst is concerned that ongoing chip crisis and high cost inflation will be pain points for Adient, likely denting margins. Soaring engineering costs and capex look to trim cash flows.
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