Wednesday, January 4, 2023
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 NextEra Energy, Inc. (NEE), BlackRock, Inc. (BLK) and The TJX Companies, Inc. (TJX). 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 >>>
NextEra Energy’s
shares have outperformed the Zacks Utility – Electric Power industry over the past six months (+6.0% vs. +0.4%). The company is expanding operations through the efficient execution of organic projects and acquisitions. The company currently has many renewable projects in its backlog and their completion will ensure reduced emissions.
The merger of Gulf Power and FPL strengthens NextEra’s position in Florida. FPL’s customer base is expanding as Florida’s economy improves and its services become more reliable. NextEra has ample liquidity to meet its near-term debt obligations.
However, the nature of its business is subject to complex federal, state and other regulations. Risk in operating nuclear units, unfavorable weather conditions and an increase in supply costs adversely impact earnings.
(You can
read the full research report on NextEra Energy here >>>
)
Shares of
BlackRock
have outperformed the Zacks Financial – Investment Management industry over the past six months (+14.8% vs. +9.8%). The company continues to restructure the equity business, which, along with strategic acquisitions, will likely keep supporting revenue growth, and help expand market share and footprints globally.
Robust assets under management (AUM) balance will further support the company’s top line. Though our estimates for revenues reflect year-over-year declines in 2022 and 2023, these will increase in 2024 as the operating backdrop becomes more favorable. BLK’s capital deployments reflect a solid liquidity position.
However, elevated expenses (mainly owing to higher administration costs) are expected to hurt the company’s profits. Its high dependence on overseas revenues is worrisome. The rise in equity market volatility and a fall in asset prices make us apprehensive.
(You can
read the full research report on BlackRock here >>>
)
Shares of
TJX
have outperformed the Zacks Retail – Discount Stores industry over the past year (+5.2% vs. -12.2%). The company’s off-price business model, strategic store locations, impressive brands and fashion products and supply-chain management have been working well. The TJX Companies is benefiting from its solid store and e-commerce growth efforts.
TJX is registered an improved pretax profit margin in the third quarter of fiscal 2023. Management is optimistic about its capabilities to provide impressive brands and gifts to its stores and online during the holiday season.
However, the company has been grappling with increased freight costs. In addition, the company saw additional wage costs in the fiscal third quarter. Management is projecting nearly 130 basis points (bps) of incremental freight expense and 70 bps of wage costs for fiscal 2023.
(You can
read the full research report on TJX here >>>
)
Other noteworthy reports we are featuring today include Analog Devices, Inc. (ADI), Southern Copper Corp. (SCCO) and Parker-Hannifin Corp. (PH).
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
Steady Investment & Renewable Focus Aid NextEra Energy (NEE)
Buyouts, Active Equity Focus Aid BlackRock (BLK), Costs Ail
Online Growth to Fuel TJX Companies (TJX), High Costs a Woe
Featured Reports
Battery Management System Solutions Aid Analog Devices (ADI)
Per the Zacks analyst, Analog Devices is benefiting from a strong momentum in the electric vehicle space on the back of its robust Battery Management System solutions.
Cost Cuts Aid Southern Copper (SCCO), Lower Production Ail
The Zacks analyst appreciates Southern Copper’s focus on cost reduction and expansion actions. However lower production levels due to lower grades might impair results.
Parker-Hannifin (PH) Benefits from Buyouts Amid Cost Woes
Per the Zacks analyst, the company is benefiting from the acquisition of Meggitt plc, which has expanded its presence in the United Kingdom. However, escalating cost of sales is concerning.
Operating Prowess Aids Waste Connections (WCN), Liquidity Low
Per the Zacks analyst, Waste Connections’ low-overhead, highly efficient operational structure allows it to expand into geographically contiguous markets. Low liquidity remains a concern.
United Therapeutics’ (UTHR) PAH Portfolio Drives Growth
The Zacks Analyst believes that demand for United Therapeutics’ treprostinil medicines is strong. Its newly launched expanded indications for Orenitram and Tyvaso and pipeline have potential.
Solid Excess & Surplus Lines of Business Aids Kinsale (KNSL)
Per the Zacks analyst, Kinsale Capital is set to grow on its focus on the excess and surplus lines of business aiding high retention rates arising from renewals, improved margins and lower loss ratios
Strength in Sequel Aids PacBio (PACB) Amid Stiff Competition
The Zacks analyst is upbeat about PacBio’s flagship platform, the Sequel system, fortifying its footprint worldwide despite its operation in a highly competitive market.
New Upgrades
Casey’s (CASY) Digital & Other Growth Efforts Seem Encouraging
Per Zacks analyst, Casey’s digital engagements comprising mobile app and online ordering capabilities help create a seamless shopping experience. Its mobile app represents 66% of all digital revenues.
Murphy USA (MUSA) Gains from Proximity to Walmart Stores
The Zacks analyst likes the proximity of Murphy USA’s fuel stations to Walmart supercenters and the consistent traffic that these stores attract, thereby driving above-average fuel sales volume.
Bandwidth (BAND) Rides on Improved Networking Infrastructure
Per the Zacks analyst, Bandwidth is likely to benefit from its dynamic location routing technology that enables enterprises to meet critical requirements for enhanced 911 services in the United States
New Downgrades
Competition, Seasonality of Business Ail ONE Gas (OGS)
Per the Zacks analyst, ONE Gas’ (OGS) natural gas business is exposed to tough competition from other clean energy sources and seasonal fluctuation of demand also acts as a headwind.
Elevated Expenses Hurt Federated Hermes (FHI) Bottom Line
Per the Zacks analyst, increasing costs due to an expected rise in distribution expenses and new hires will likely hurt Federated Hermes’ profits to an extent. Rise in fee waivers are worrisome.
High Inflation & Acquisition Related Costs Ail MasTec (MTZ)
Per the Zacks analyst, acquisition integration costs, inflationary pressures, and a significant shift in 2022 operations to non-Oil & Gas segments hurt MasTec (MTZ).
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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