Tuesday, March 22, 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), Honeywell International Inc. (HON) and Becton, Dickinson and Company (BDX). 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
Berkshire Hathaway
have outperformed the Zacks Insurance – Property and Casualty industry over the past year (+40.9% vs. +24.1%). The Zacks analyst believes that 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, as the just announced Alleghany transaction shows. 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 can
read the full research report on Berkshire Hathaway here >>>
)
Honeywell International
shares have declined -7.5% over the past year against the Zacks Diversified Operations industry’s decline of -4.0%. The Zacks analyst believes that weakness across the personal protective equipment business will adversely impact its near-term results. Honeywell has been dealing with high costs and expenses and supply-chain challenges, which might affect its margins and profitability. Also, high debt levels might raise its financial obligations and hurt profitability.
However, Honeywell is expected to benefit from strength in the warehouse and workflow solutions, UOP and advanced materials businesses. It is likely to gain from acquisitions made over time. Also, its ability to generate strong cash flows add to its strength. The company’s commercial and operational excellence initiatives are likely to be favorable.
(You can
read the full research report on Honeywell International here >>>
)
Shares of
Becton, Dickinson
have outperformed the Zacks Medical – Dental Supplies industry over the past six-month period (+5.4% vs. -2.7%). The Zacks analyst believes that the company’s base revenue uptick and robust results by majority of its arms in first-quarter fiscal 2022 are impressive. Regulatory approvals and launches are encouraging. BD’s strategic deals augurs well. A raised outlook for full-fiscal year is also promising.
A strong solvency position is an added plus. BD’s fiscal first-quarter results were better than expected. Yet, year-over-year falls in both top and bottom lines are disappointing. Fall in BD Life Science arm and both geographical areas are worrying. Lower COVID-only testing revenues are discouraging. Contraction of both margins does not bode well. BD’s operation in a highly consolidated medical technology industry is worrying.
(You can
read the full research report on Becton, Dickinson here >>>
)
Other noteworthy reports we are featuring today include NXP Semiconductors N.V. (NXPI), Fortinet, Inc. (FTNT) and Ecolab Inc. (ECL).
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
Solid Insurance Business Aid Berkshire (BRK.B), Cat Loss Ail
End-Market Strength & Buyouts to Benefit Honeywell (HON)
A Strong Product Portfolio, Regulatory Approvals Aid BD (BDX)
Featured Reports
Williams (WMB) to Benefit from Transco-Related Projects
The Zacks analyst believes that Williams’ existing and expansionary projects associated with the massive Transco gas transmission system are likely to boost the company’s growth prospects.
Service Corporation (SCI) Gains on Higher Funeral Services
Per the Zacks analyst, Service Corporation has been benefiting from elevated Cemetery and Funeral unit sales. Increased funeral services, burials and preneed revenues have been driving the company.
Liberty Global (LBTYA) Rides on Growing Mobile User Base
Per the Zacks analyst, Liberty Global is benefiting from an expanded mobile subscriber base. Strong growth prospect of Virgin Media O2 joint venture is a key catalyst.
RF Power & Communication Business Strength Aids NXP (NXPI)
Per the Zacks analyst, NXP is benefiting from solid momentum in RF power for base stations. Further, rising 5G network deployments are driving growth in its communication business.
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.
Organic Growth Aids T. Rowe Price (TROW), High Costs Ail
Per the Zacks analyst, T. Rowe Price’s organic growth efforts and strong AUM balance will support financials. However, rising costs and overdependence on investment advisory fees are concerning.
A Solid Product Suite Aids Ecolab (ECL) Amid Stiff Competition
The Zacks analyst is upbeat about Ecolab’s robust product portfolio despite its operation in a highly competitive market.
New Upgrades
Acquisitions, Strong Demand Aid Westlake (WLK)
Per the Zacks analyst, strong demand for polyethylene and polyvinyl chloride resin will drive the company’s top line. It should also gain from synergies of acquisitions.
Strong Freight Market & Fleet Growth Boost Air Lease (AL)
The Zacks analyst is optimistic about Air Lease’s steady growth in fleet, increase in cash collections and higher aircraft sales activity. Also, strong freight and cargo markets are tailwinds.
Jabil (JBL) Rides on Solid Demand, Operational Execution
Per the Zacks analyst, Jabil is well-positioned to benefit from the increasing demand in key end markets coupled with excellent operational execution and skillful management of supply chain dynamics.
New Downgrades
Rising Input Price, Expenses to Hurt Canadian Solar (CSIQ)
Per the Zacks analyst, rising polysilicon prices have pushing up input cost for Canadian Solar, which may hurt its earnings. Also, rising transportation costs continue to pose threat for this stock
Escalated Fuel Costs & Reduced Capacity Sting Delta (DAL)
The Zacks analyst is worried about the steep rise in oil price that forces Delta to raise its projection for Q122 fuel price per gallon. The cut in the capacity growth forecast is concerning too.
Dismal RevPAR Likely to Hurt Hyatt (H) Performance
Per the Zacks analyst, dismal RevPAR owing to coronavirus-related travel restrictions likely to hurt results. During fourth-quarter 2021, the company’s system-wide RevPAR was 74% of 2019 levels.
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