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Top Analyst Reports for Netflix, Canadian National Railway & Shopify

Thursday, February 2, 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 Netflix, Inc. (NFLX), Canadian National Railway Company (CNI) 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 >>>

For the third quarter in a row, Netflix shares were up big on the Q4 earnings release on January 19th, leaving the stock now down -15% over the past year against the Zacks Broadcast Radio and Television industry’s decline of -27.6% and -11.9% decline for the S&P 500 index. The company’s average revenues per membership declined as it continues to face stiff competition in the streaming space from the likes of Apple, Amazon prime video, HBO Max, Disney+, Peacock, Paramount+ and TikTok.

However, Netflix added 7.66 million paid subscribers globally in fourth-quarter 2022, higher than its estimate of gaining 4.5 million users. It is expected to continue dominating the streaming space, courtesy of its diversified content portfolio, which is attributable to heavy investments in the production and distribution of localized, foreign-language content. Netflix currently expects paid net additions to be greater in the second quarter of 2023 compared sequentially.

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

Shares of Canadian National Railway have held up a lot better than other railroad operators and the broader market in the recent market pullback. The shares are down -4.5% over the past year against the Zacks Transportation sector's -11.6% decline and the S&P 500 index's -11.8% decline. The company's exposure to macroeconomic slowdown resulting from tighter financial conditions notwithstanding, it enjoys a fair amount of stability in its operating results.

This stability is evident from Canadian National's track recrod of returning cash to shareholders through dividends and buybacks. In January, the company announced an 8% dividend hike. Canadian National is also active on the share buyback front.

Strong cash flow generating-ability supports Canadian National's shareholder-friendly activities. The company is benefiting from solid pricing. Despite the softening demand scenario, management expects adjusted 2023 earnings to increase in low single-digits y/y in the current year.

(You can read the full research report on Canadian National Railway here >>>)

Shares of Shopify have underperformed the Zacks Internet - Services industry over the past year (-37.9% vs. -28.7%). The company is witnessing the absence of pandemic-triggered acceleration of e-commerce is expected to hurt top-line growth in the remainder of 2022. Further, higher investments in product development, as well as fulfillment platforms and 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.

Nevertheless, Shopify 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.

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

Other noteworthy reports we are featuring today include Chubb Limited (CB), Phillips 66 (PSX) and Halliburton Company (HAL).

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

Weak Content Slate & Stiff Competition Hurts Netflix (NFLX)

Canadian National's (CNI) Dividends Support, Fuel Costs Hurt

Product Rollouts & Growing Merchant Base Aid Shopify (SHOP)

Featured Reports

Better Rate, Increased Exposure Aid Chubb (CB), Cat Loss Ail
Per the Zacks analyst, Chubb is set to grow on better rate environment, increasing exposures and market share, solid capital position and cash generation capabilities. Yet, exposure to cat loss ails.

Phillips 66 (PSX) to Gain From Higher Distillate Fuel Demand
Per the Zacks analyst, Phillips 66 is well-positioned to benefit from higher distillate fuel demand amid changes in the marine fuel sulfur limits. However, the firm's rising expenses are concerning.

Halliburton (HAL) to Benefit from North American Exposure
The Zacks analyst believes that Halliburton can take advantage of the tight fundamentals of the North American land drilling space through its market-leading pressure pumping operations.

Strength in CUE Products Drive Tractor Supply's (TSCO) Sales
Per the Zacks analyst, Tractor Supply has been witnessing solid demand for consumable, usable and edible (CUE) products. Consequently, Q4 sales rose 20.7% year over year and 70% on a three-year basis.

NVR Benefits From Strong Business Model & Lot Acquisition
Per the Zacks analyst, NVR banks on strong business model, and lot acquisition strategy that avoid financial requirements and risks associated with direct land ownership and land development.

Boston Properties (BXP) to Ride High on Quality Office Assets
Per the Zacks analyst, Boston Properties' premium assets to benefit from solid demand for high-quality office properties and life-science assets. Interest rate hikes, though, are a key concern.

Higher Costs & Weaker Demand Ail Eastman Chemical (EMN)
Per the Zacks analyst, higher input and energy costs will weigh on the company's margins. It also faces headwinds from softness in automotive, building & construction and consumer durables markets.n

New Upgrades

ZTO Express (ZTO) Benefits From Increase in Parcel Volumes
The Zacks Analyst believes that increase in parcel volumes aids ZTO Express' express delivery services unit.

LabCorp (LH) Gains from Innovation, LaunchPad Efforts Aid
The Zacks analyst is impressed with LabCorp's continued spree of new product launches in high-growth areas. The LaunchPad cost-saving initiatives are helping the company to gain operationally.

High Premiums, Solid Capital Stand Aid RenaissanceRe (RNR)
Per the Zacks analyst, its rising premiums are driven by continued rate increases and strong segmental contributions. Moreover, a robust capital position continues to be a key catalyst.

New Downgrades

Ligand's (LGND) Dependence on Captisol Technology A Woe
The Zacks Analyst is concerned about Ligand's overdependence on its collaboration partners for revenue. The company has been experiencing a decline in its Captisol sales for COVID-19 antiviral Veklury

Rate Hikes & Subsidiary Dependence Ail Southwest Gas (SWX)
Per the Zacks analyst Southwest Gas's performance will get impacted as rising interest rates will surge borrowing cost. Lower than expected performance from subsidiaries could impact SWX's prospects.

Supply Chain Woes & Stiff Competition to Hurt Itron (ITRI)
Per the Zacks analyst, Itron's performance is affected due to unexpected supplier decommitments and inadequate component deliveries. Stiff competition and leveraged balance sheet is an added concern.

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Halliburton Company (HAL) : Free Stock Analysis Report

Netflix, Inc. (NFLX) : Free Stock Analysis Report

Canadian National Railway Company (CNI) : Free Stock Analysis Report

Chubb Limited (CB) : Free Stock Analysis Report

Phillips 66 (PSX) : Free Stock Analysis Report

Shopify Inc. (SHOP) : Free Stock Analysis Report

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