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Top Analyst Reports for Coca-Cola, Petrbras & Shopify

Friday, June 9, 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 The Coca-Cola Company (KO), Petróleo Brasileiro S.A. - Petrobras (PBR) and Shopify Inc. (SHOP). 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 Coca-Cola have gained +1.3% over the past year against the Zacks Beverages - Soft drinks industry’s gain of +15.8%. The company returned to bottom line surprise trend after in line results in the prior quarter. Earnings and sales also improved year over year and surpassed our estimate in the quarter.

KO’s results benefited from the continued momentum in its business. Sales gained from revenue growth across its operating segments, aided by an improved price/mix and a rise in concentrate sales. It is poised to gain from innovations and accelerating digital investments.

It provided an upbeat guidance for 2023. However, Pressures from higher supply chain costs, higher marketing spends and currency headwinds are concerning.

(You can read the full research report on Coca-Cola here >>>)

Petroleo Brasileiro shares have outperformed the Zacks Oil and Gas - Integrated - Emerging Markets industry over the past year (+17.8% vs. +11.6%). This Brazil's state-run oil and natural gas giant Petrobras is riding high on the back of its impressive portfolio, particularly in the country’s pre-salt reservoirs.

It is the operator in most of these exploration areas and holds interests in them ranging from 20% to 100%. This puts Petrobras in an enviable position to maintain an impressive production growth profile for years to come. Meanwhile, the company’s ambitious divestment plans appear to be working well as far as deleveraging is concerned.

Having said all of this, the fact that Rio de Janeiro-based Petrobras is still reeling under huge debt burden cannot be overlooked. The firm is also having to deal with years of mismanagement and corruption, while investors remain wary of the risk of political interference. As such, Petrobras warrants a cautious stance at the moment.

(You can read the full research report on Petroleo Brasileiro here >>>)

Shares of Shopify have outperformed the Zacks Internet - Services industry over the past year (+76.7% vs. +10.5%). The company is benefiting from strong growth in the merchant base. It has been focused on winning merchants regularly, based on product offerings including Shop Pay and Shop Pay Installments.

Solid adoption of new merchant-friendly applications holds promise. Partnerships with YouTube, Twitter, Facebook, Instagram, and Google are expected to expand its merchant base. The divestiture of the logistics business to Flexport will boost profitability.

However, the absence of pandemic-triggered acceleration of e-commerce hurts top-line growth. Further, higher investments in product development, an unfavorable mix, are likely to limit margin expansion in the near term. Raging inflation and cautious consumer spending are expected to hurt top-line growth in the near term.

(You can read the full research report on Shopify here >>>)

Other noteworthy reports we are featuring today include Tesla, Inc. (TSLA), EOG Resources, Inc. (EOG) and Waste Management, Inc. (WM).

Director of Research

Sheraz Mian

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

Coca-Cola's (KO) Digital Investments to Aid the Top Line

Pre-Salt Reserves Aid Petrobras (PBR), Debt Burden Hurts

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Product Rollouts & Growing Merchant Base Aid Shopify (SHOP)

Featured Reports

EOG Resources (EOG) Banks on Prolific Delaware & Eagle Ford
The Zacks analyst likes EOG Resources since the company has significant acreages in oil shale plays like Delaware and Eagle Ford. But, rising exploration expenses are concerning.

Focused Differentiation Aids Waste Management (WM), Debt High
Per the Zacks analyst, differentiation through capitalization of extensive assets ensures long-term profitable growth for Waste Management. A debt-heavy balance sheet remains a concern.

Biogen's (BIIB) Upcoming Product Launches May Revive Growth
The Zacks analyst says that potential new product launches like lecanemab, zuranolone and additional biosimilars can help revive growth at Biogen, which is facing multiple challenges at present.

Manulife Financial (MFC) Banks on Buyout, Expenses A Concern
Per the Zacks analyst, acquisitions have helped Manulife to increase scale to its core business lines and strengthen its presence in markets. However, higher expenses weigh on margins.

Science Applications (SAIC) Rides on Contract Wins, Buyouts
Per the Zacks analyst, Science Applications is benefiting from new contracts supporting IT modernization. Moreover, strategic buyouts like Koverse and Halfaker and Associates bode well for growth.

Integra's (IART) Codman Arm Gains Strength on Product Launch
The Zacks analyst is positive about the fact that despite the macroeconomic slowdown, Integra's Codman Specialty Surgical line is expanding across neurosurgery franchises banking on innovation.

Air Traffic Aid Spirit Aerosystems (SPR) Amid Weak Solvency
Per the Zacks analyst, improving domestic air traffic tend to provide a boost to Spirit Aerosystems' commercial business. Yet, its weak solvency position remains a bottleneck

New Upgrades

Tesla (TSLA) Rides High on Robust Model 3/Y Deliveries
Per the Zacks analyst, strong demand for models 3 and Y and production ramp-up at gigafactory 4 and 5 sets the stage for solid delivery growth for Tesla, thereby boosting revenues.

NVR Banks on Strong Business Model & Acquisition Strategy
Per the Zacks analyst, strong business model is aiding NVR. Also, lot acquisition strategy helps it to avoid financial risks associated with direct land ownership and land development.

Xerox (XRX) Benefits From Cost and Productivity Initiatives
Per the Zacks Analyst, Xerox's bottom line is benefiting from 'Project Own It," an enterprise-wide initiative aimed at increasing productivity and operational efficiency, and reducing costs.

New Downgrades

Reduced Chemical Software Spending To Hurt Aspen (AZPN)
Per the Zacks analyst, Aspen's performance is affected due to uncertain macroeconomic environment and cautious software spending in the chemical industry. Stiff competition is a headwind.

Medifast (MED) Gross Margin Hurt by Input Cost Inflation
Per the Zacks analyst, input cost inflation is concerning Medifast. In first quarter, gross margin fell 180 basis points due to raw ingredients, shipping and labor cost inflation, and lower revenues.

Costs, Commercial Loan Exposure Hurt Valley National (VLY)
Per the Zacks analyst, steadily rising expenses on the back of strategic acquisitions are expected to hurt Valley National's bottom-line. Huge exposure in commercial loan portfolio is another concern.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

CocaCola Company (The) (KO) : Free Stock Analysis Report

Petroleo Brasileiro S.A.- Petrobras (PBR) : Free Stock Analysis Report

Waste Management, Inc. (WM) : Free Stock Analysis Report

EOG Resources, Inc. (EOG) : Free Stock Analysis Report

Tesla, Inc. (TSLA) : Free Stock Analysis Report

Shopify Inc. (SHOP) : Free Stock Analysis Report

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Zacks Investment Research