Friday, May 27, 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 Meta Platforms, Inc. (FB), Visa Inc. (V), and Verizon Communications Inc. (VZ). 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 >>>
Meta Platforms shares have declined -41.7% over the past year against the Zacks Internet - Software industry’s decline of -59.0% and the -4.4% decline in the broader S&P 500 index. Weighing on the stock are changes to Apple’s iOS as well as engagement-related headwinds. Apple’s iOS changes have made ad targeting difficult, which, in turn, has increased the cost of driving outcomes. Measuring these outcomes has also become difficult. Meta expects these factors to hurt advertising revenue growth throughout 2022. Meta’s second-quarter guidance reflects macroeconomic and forex concerns. Cost inflation and supply chain disruptions are expected to impact advertiser budgets.
However, Meta is benefiting from steady user growth across all regions, particularly Asia Pacific. Increased engagement for its products like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver.
(You can read the full research report on Meta Platform here >>>)
Visa shares have declined -7% over the past year against rival Mastercard's -1.7% decline and the Zacks Financial Transaction Services industry’s decline of -31.6%. The company's market leading position offers some measure of stability and visibility in the current uncertain environment, but it is nevertheless faced with a number of near-term challenges, including weak margins outlook a result of rising operating expenses, the negative impact of ramped-up client incentives on top-line growth, and exposure to the Russia-Ukraine situation.
However, numerous buyouts and alliances paved the way for long-term growth and consistently drove its revenues. The company's investments in technology are solidifying its position in the payments market. A shift in payments to the digital mode is a boon. The coronavirus vaccine rollouts and the gradual revival of consumer confidence will keep driving spending, expanding business volumes in turn. Backed by its strong cash position, it remains committed to boost its shareholder value. Its balance sheet strength is commendable.
(You can read the full research report on Visa here >>>)
Verizon Communications shares have declined -5.2% over the past year against the Zacks Wireless National industry’s decline of -5.3%. The company offered a muted outlook for 2022 due to the challenging macroeconomic environment. An intensely competitive market and hefty expenses on promotions and lucrative discounts to attract customers are likely to hurt its profitability. High auctioning expenses for the mid-band spectrum are expected to further compromise margins.
However, the company plans to accelerate the availability of its 5G Ultra Wideband network with C-Band deployment, covering 175 million people by the end of 2022. Its growth strategy includes 5G mobility, nationwide broadband and mobile edge compute and business solutions. Verizon is building the entire network infrastructure to provide the most amazing 5G experience to customers. It is offering various mix-and-match pricing in both wireless and home broadband plans which has led to solid customer additions.
(You can read the full research report on Verizon here >>>)
Other noteworthy reports we are featuring today include JPMorgan Chase & Co. (JPM), United Parcel Service, Inc. (UPS), and Canadian Natural Resources Limited (CNQ).
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 User Base, Instagram Strength Aid Meta Platforms (FB)
Visa (V) Rides on Improving Top Line & Solid Balance Sheet
Verizon (VZ) Rides on Wireless Subscriber Growth, 5G Traction
Higher Rates, Loans Aid JPMorgan (JPM), Fee Income a Concern
Per the Zacks analyst, higher interest rates, solid loan demand, strategic buyouts, opening new branches and digitization of operations aid JPMorgan amid fee income growth challenge and rising costs.
E-commerce, Dividends & Buybacks Boost UPS, Cost Woes Bother
The Zacks analyst is impressed with the company's efforts to reward its shareholders. E-commerce growth is a bonus. Escalated operating expenses are, however, limiting bottom-line growth.
Investment on Infrastructure & Clean Assets Aid Dominion (D)
Per the Zacks analyst, Dominion's planned investment of $37B through 2026 to enhance clean electricity generation and strengthen its infrastructure will boost its profitability.
KLA (KLAC) Benefits From Growing Foundry/Logic Investments
Per the Zacks analyst, KLA is gaining from increasing investments across multiple nodes. This is driving its growth in the Foundry/Logic market.
Dow (DOW) Gains on Cost Actions, Project Investment
According to the Zacks analyst, Dow is well placed to benefit from cost synergy savings and productivity initiatives and its investment in high-return growth projects.
Fastenal (FAST) Rides on Higher Market Demand, Costs High
Per the Zacks analyst, improved unit sales across most products to traditional manufacturing and construction customers have been aiding Fastenal. However,higher product and freight inflation are risk
Teva (TEVA) May Return to Growth Amid Opioid Litigation Woes
With improving operational efficiencies/fundamentals and significant debt reduction, the Zacks analyst says Teva may return to growth in couple of years. Opioid suits and DOJ inquiries are concerns.
Diverse Production Mix Aids Canadian Natural (CNQ)
The Zacks analyst believes that Canadian Natural's diverse production mix of synthetic oil, heavy crude oil, natural gas and light crude oil facilitates long-term value and reduces risk profile.
Capacity Expansion, Cost Reduction to Aid Albemarle (ALB)
Per the Zacks analyst, Albemarle should gain from its actions to boost its global lithium derivative capacity. Its cost-saving actions will also support margins.
An Expanded Portfolio Continues to Aid AMN Healthcare (AMN)
The Zacks analyst is upbeat about AMN Healthcare's expanded portfolio serving a diverse and growing healthcare talent-related needs. The recent Connetics USA buyout also buoys optimism.
Xerox (XRX) Hurt by Lower Demand for Paper Related Products
The Zacks analyst believes that decreasing demand for paper-related systems and products due to technological advancements will hurt Xerox.
Higher Freight Costs Hurt Abercrombie's (ANF) Gross Margins
Per the Zacks analyst, the volatile supply environment and higher freight costs have been weighing on Abercrombie's gross margin. It expects higher costs to be a headwind throughout fiscal 2022.
Margin Pressure, Elevated Costs Hurt Hilltop Holdings (HTH)
Per the Zacks analyst, despite the expected rate hikes, Hilltop Holdings might continue to witness pressure on margins in the near term due to relatively lower rates. Higher costs might hurt profits.
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
JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
Visa Inc. (V) : Free Stock Analysis Report
Verizon Communications Inc. (VZ) : Free Stock Analysis Report
United Parcel Service, Inc. (UPS) : Free Stock Analysis Report
Canadian Natural Resources Limited (CNQ) : Free Stock Analysis Report
Meta Platforms, Inc. (FB) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research