Monday, June 13, 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 Berkshire Hathaway Inc. (BRK.B), AbbVie Inc. (ABBV), and TotalEnergies SE (TTE). 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 >>>
Berkshire Hathaway
shares have outperformed the Zacks Insurance – Property and Casualty industry over the past year (+1.1% vs. -3.3%). The company is one of the largest property and casualty insurance companies measured by premium volume. Berkshire’s inorganic growth story remains impressive with strategic acquisitions. A strong cash position supports earnings-accretive bolt-on buyouts and indicates the company’s financial flexibility. Continued insurance business growth fuels increase in float, drive earnings and generates maximum return on equity.
The non-insurance businesses are delivering improved results with increased revenues over the past few years. A sturdy capital level provides further impetus. However, exposure to catastrophe loss induces earnings volatility and also affects the property and casualty underwriting results of Berkshire. Huge capital expenditure remains a headwind for the company.
(You an
read the full research report on Berkshire Hathaway here >>>
)
AbbVie
shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+27.6% vs. +15.8%). The Zacks analyst believes that the company has successfully expanded the labels of its cancer drugs, Imbruvica and Venclexta. It has several new drugs in its portfolio, which have the potential to drive revenues once Humira loses U.S. exclusivity in 2023. Skyrizi and Rinvoq are going strong bolstered by approval in new indications. It has an impressive late-stage pipeline and several early/mid-stage candidates that have blockbuster potential.
Allergan’s acquisition has diversified AbbVie’s revenue base into new therapeutic areas, enhancing its long-term growth potential. However, there are concerns about long-term sales growth once Humira generics enter the U.S. market. Increasing competition from newer therapies is hurting Imbruvica’s sales. AbbVie’s shares have outperformed the industry this year so far.
(You an
read the full research report on AbbVie here >>>
)
TotalEnergies
shares have gained +44.3% over the past year against the Zacks Oil and Gas – Refining and Marketing industry’s gain of +19.0%. The Zacks analyst believes that the company is gaining from new startups, increase in commodity prices, well-spread LNG assets and an expanding upstream portfolio that has exposure to fast-growing hydrocarbon producing regions. TTE streamlines its portfolio through acquisitions, partnerships and divestitures. TTE is making regular investments to expand renewable operation and aims to achieve net-zero emission by 2050.
TTE has enough liquidity to meet debt obligations. However, TTE’s profitability is likely to have been impacted by natural decline in the oil and natural gas fields. TTE remains exposed to acquisition-related risks as these assets contribute a sizable volume to production. TTE has operations in some politically-troubled regions and the ongoing Russia and Ukraine conflict might affect profitability.
(You an
read the full research report on TotalEnergies here >>>
)
Other noteworthy reports we are featuring today include Linde plc (LIN), NextEra Energy, Inc. (NEE), and AT&T Inc. (T).
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
Berkshire (BRK.B) Continues to Gain From Insurance Business
AbbVie’s (ABBV) Pipeline & New Drugs Key to Long-Term Growth
Expanding LNG & Clean Energy Assets Aid TotalEnergies (TTE)
Featured Reports
Linde’s (LIN) Contracts With Minimum Volume Requirements Aid
Linde has long-term contracts with on-site customers backed by minimum purchase requirements, thereby securing stable cashflows. However, rising cost of sales concerns the Zacks analyst.
Steady Investment & Renewable Focus Aid NextEra Energy (NEE)
Per the Zacks analyst, NextEra’s planned capital investment to enhance clean electricity generation and strengthen its infrastructure will boost its profitability.
AT&T (T) to Gain from Increasing Subscriber Base & 5G Boom
Per the Zacks analyst, AT&T’s performance is gaining from growing subscriber base. Continued investments to deliver 5G capabilities for new use cases for its subscriber base bodes well.
Freight Demand Aids Canadian National (CNI), Low Volumes Ail
Per the Zacks analyst, Canadian National’s top line is benefiting from strong freight demand and high freight rates. However, supply chain disruptions are hurting the company’s volumes.
Network Software Business Aids Roper (ROP), High Debt Hurts
Per the Zacks analyst, strength across Roper’s network software and medical product businesses will lend momentum to the company. However, the company’s high debt level remains concerning.
Investment in Brands Portfolio to Power Brown-Forman (BF.B)
Per the Zacks analyst, Brown-Forman focuses on investing in the diversification of brand portfolio. Brand investments include expanding the Jack Daniel’s the fast-growing spirits.
Solid Comps & Expansion Efforts Aid Restaurant Brands (QSR)
Per the Zacks analyst, Restaurant Brands’ solid expansion efforts, various sales building strategies and robust comps is likely to benefit Restaurant Brands.
New Upgrades
PetroChina (PTR) to Benefit from Natural Gas Business
The Zacks analyst believes that PetroChina’s natural gas business offers lucrative growth prospects in the coming years as China moves from coal to the cleaner fuel for environmental reasons.n
Innovations Aid Integra (IART), Global Busienss Broadens
Per the Zacks analyst, Integra’s innovations and strategic market expansion efforts globally, are helping it offset the impact of the high inflation and supply disruptions.
Oasis (OAS) to Gain from Combination with Whiting Petroleum
The Zacks analyst likes Oasis Petroleum’s impending ‘merger of equals’ with Whiting Petroleum that is expected to create a leading Williston Basin operator with top tier assets.
New Downgrades
Interest Rates Hike, Regulations Ail PPL Corporation (PPL)
Per the Zacks analyst PPL Corp.’s project cost will increase with the rise in interest rates, adherence to the stringent regulation will increase expenses and impact financial performance.
Russia, Currency Headwinds to Hurt Autodesk’s (ADSK) Sales
Per the Zacks analyst, the halt of business in Russia along with unfavorable currency exchange rates are anticipated to negatively impact Autodesk’s revenues in the near-term.
Dependence on Fee Income to Hamper BNY Mellon (BK) Profits
Per the Zacks analyst, BNY Mellon’s higher dependence on fee-based revenues is worrisome on given the current bearish markets, slowdown in capital market activities and recessionary fears.
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