Monday, May 15, 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 Visa Inc. (V), Pfizer Inc. (PFE) and SAP SE (SAP). 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 >>>
Visa’s shares have outperformed the Zacks Financial Transaction Services industry over the past year (+17.9% vs. +7.7%). The company’s numerous buyouts and alliances paved the way for long-term growth and consistently help drive its sales. For fiscal 2023, our estimate for revenues indicates almost 10% year over year growth. Constant investments in technology are solidifying its position in the payments market.
Visa reported solid fiscal Q2 results on the back of higher cross-border volumes. A shift in payments to the digital mode is a boon for Visa. Steady domestic volumes and transactions rise will aid the company in boosting its top line in the coming years. A strong cash position enables it to boost shareholder value.
However, high operating expenses stress the company's margins. Ramped-up client incentives will dent the top line. The company's volumes will likely suffer due to the Russia-Ukraine conflict.
(You can read the full research report on Visa here >>>)
Shares of Pfizer have underperformed the Zacks Large Cap Pharmaceuticals industry over the past year (-23.5% vs. +14.7%). The company’s top line is expected to decline in 2023 due to potentially steep declines in revenues from its COVID-19 products, Comirnaty vaccine and Paxlovid oral pill, on lower demand.
Concerns remain about its long-term growth drivers beyond its COVID products due to competitive pressure. Nonetheless, Pfizer boasts a diversified portfolio of innovative drugs and vaccines, including Ibrance and Prevnar.
Pfizer is witnessing solid pipeline progress and expects to launch some key non-COVID products in 2023, which can drive long-term sales and profit growth. Its cash position is strong, which can be used to make acquisitions, increase dividends, buy back shares and reduce debt.
(You can read the full research report on Pfizer here >>>)
SAP’s shares have outperformed the Zacks Computer - Software industry over the past year (+40.2% vs. +19.1%). The company’s performance is benefiting from continued strength in its cloud business (especially the new Rise with SAP solution) across all regions. Momentum in SAP’s business technology platform particularly the S/4HANA solutions augurs well.
SAP’s restructuring plan is expected to better align its operating models and go-to-market approach with its accelerated cloud transformation. Frequent product launches like Grow with SAP and SAP Datasphere, and strategic acquisitions and collaborations bode well.
However, the company’s performance is affected due to continued softness in software license and support business segment, coupled with global macroeconomic weakness and geopolitical instability. Also, increasing research & development and sales & marketing expenses and stiff competition in the cloud space are concerns.
(You can read the full research report on SAP here >>>)
Other noteworthy reports we are featuring today include International Business Machines Corp. (IBM), The Boeing Co. (BA) and MSCI Inc. (MSCI).
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
Visa (V) Rides On Growing Cross Border Volume, Expenses High
Pfizer's (PFE) New Products Can Drive Long Term Sales Growth
SAP To Benefit From Continued Momentum in Cloud Business
IBM Remains Buoyed by Robust Hybrid Cloud, AI Demand Trends
Per the Zacks analyst, IBM is likely to benefit from solid demand trends for hybrid cloud and AI backed by better business mix, improving operating leverage and focus on core operations.
Military Business Aids Boeing (BA), 787 Program Issue Woes
Per the Zacks analyst, Boeing boasts a solid $2.8 trillion market opportunity for its defense unit. Yet, it has been incurring abnormal costs due to production quality issues for its 787 program
Solid Adoption of ESG Solution Aids MSCI's (MSCI) Progress
Per the Zacks analyst, MSCI is benefiting from strong demand for custom and factor index modules and the increasing adoption of the ESG solution into the investment process.
McCormick (MKC) Benefits From CCI Program Amid High Costs
Per the Zacks analyst, cost savings from McCormick's Comprehensive Continuous Improvement plan has been offering respite amid escalated cost inflation and increased other supply-chain expenses.
Paycom Software (PAYC) Benefits From Growing Customer Base
Per the Zacks Analyst, Paycom Software is benefiting from its differentiated employee strategy, measurement capabilities and comprehensive product offerings, that are helping it win new customers.
KBR Benefits From Strong Backlog, Competition Ail
Per the Zacks analyst, solid backlog level along with high contributions from STS segment aid KBR. However, stiff competition raises concern.
Transocean's (RIG) Backlog Offers Cash Flow Visibility
The Zacks analyst believes that Transocean's backlog of $8.5 billion reflects steady demand and cash flow visibility but is worried about the company's high debt burden.
Rockwell Automation (ROK) Benefits From Solid Backlog Levels
Per the Zacks analyst, Rockwell Automation is gaining from solid backlog levels reflecting strong demand. Pricing actions are also aiding growth.
Digital Prowess and Acquisitions Aid Interpublic Group (IPG)
Per the Zacks analyst, Interpublic has been enhancing its digital capabilities to maintain growth in the dynamic media sector. The company has a disciplined acquisition strategy.
Walmart Tie-Up & an Expanding Market Boost Green Dot (GDOT)
The Zacks analyst is positive about Green Dot's long-standing relationship with Walmart as a key driver of its operating revenues. Also, its expanding addressable market is a tailwind.
PRA Group (PRAA) Suffers From Escalating Costs, High Debts
Per the Zacks analyst, the company's high costs can put margins under pressure. Rising debts remain a concern as it leads to escalated interest expenses.
Stiff Competition, Forex Woes Continue to Ail Catalent (CTLT)
The Zacks analyst is worried about Catalent's operation in a highly competitive market. Unfavorable currency movement is an added issue.
High Costs, Rising Provisions Hurt Washington Federal (WAFD)
Per the Zacks analyst, higher expenses are likely to hamper Washington Federal's bottom-line growth. Further, deteriorating economic outlook will hurt the bank's credit quality in the near term.
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