Friday, December 1, 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 Meta Platforms, Inc. (META), JPMorgan Chase & Co. (JPM) and Salesforce, Inc. (CRM). 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 outperformed the Zacks Internet - Software industry over the year-to-date period (+171.9% vs. +57.1%). The company is benefiting from steady user growth across all regions, particularly Asia Pacific. Increased engagement for its offerings like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver.
Meta Platforms is leveraging AI to recommend Reels content, which is driving traffic on Instagram and Facebook. Its innovative portfolio, which includes Threads, Reels and Llama 2, is likely to aid prospects.
However, challenging macroeconomic conditions remain a headwind for Meta’s advertising revenues, along with targeting and measurement headwinds due to Apple’s iOS changes. Slow monetization of Reels, along with mounting operating losses at Reality Labs, are concerns.
(You can read the full research report on Meta Platforms here >>>)
Shares of JPMorgan Chase have outperformed the Zacks Banks - Major Regional industry over the year-to-date period (+19.9% vs. +4.1%). The company is witnessing high interest rates, buyouts, global expansion efforts and decent loan demand will aid net interest income (NII), though rising funding costs will weigh on it.
Despite visibility of some green shoots in the investment banking (IB) business, IB fees are less likely to improve soon. This, along with the volatile nature of the capital markets business and high mortgage rates, will likely hamper fee income growth. Aided by solid earnings strength and balance sheet, it will be able to sustain capital distributions.
(You can read the full research report on JPMorgan Chase here >>>)
Sares of Salesforce have outperformed the Zacks Computer - Software industry over the year-to-date period (+90.0% vs. +57.9%). The company is benefiting from a robust demand environment as customers are undergoing a major digital transformation. The company’s sustained focus on aligning products with customer needs is driving the top line.
Continued deal wins in the international market are another growth driver. The acquisition of Slack has positioned the company as a leader in enterprise team collaboration and improved its competitive standing versus Microsoft Teams. Salesforce’s strategy of continuously expanding generative AI offerings will help the company tap the growing opportunities in the space.
However, stiff competition and unfavorable currency fluctuations are concerns. Also, the challenging macroeconomic environment and geopolitical issues could hurt its growth prospects.
(You can read the full research report on Salesforce here >>>)
Other noteworthy reports we are featuring today include Medtronic plc (MDT), The PNC Financial Services Group, Inc. (PNC) and TC Energy Corporation (TRP).
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
User Growth, Instagram Strength Aids Meta Platforms (META)
Strategic Buyouts, Higher Rates, Loans Aid JPMorgan (JPM)
Digital Transformation and Acquisitions Aid Salesforce (CRM)
Medtronic (MDT) Gains in Market Share, Global Growth Robust
The Zacks analyst is impressed that despite macro-economic issues, Medtronic is reporting market share gains across core businesses. Non-U.S. developed and emerging markets expansions remain strong.
Solid Balance Sheet Aids PNC Financial (PNC), High Costs Ail
Per the Zacks Analyst, a solid balance sheet position and strategic acquisitions support PNC Financial. However, a decline in NII, rising costs and commercial loan concentration are concerning.
TC Energy's (TRP) C$34B Growth Projects to Boost Earnings
The Zacks analyst believes that TC Energy's C$34 billion of growth projects should support its earnings and dividend payouts but is worried over the massive debt of C$52.7 billion.
Biogen's (BIIB) New Drugs Leqembi & Others Can Revive Growth
The Zacks analyst believes Biogen's new products like Leqembi for Alzheimer's disease, Skyclarys for Friedreich's ataxia and Zurzuvae for depression can help revive growth
End-Market Demand Aids United Rentals (URI), Volatility Hurt
Per the Zacks analyst, United Rentals benefits from strong demand in its end markets and strength in core rental business. However, volatile oil & natural gas prices and intense competition hurt.
Discover Financial (DFS) Aided by Rising Interest Income
Per the Zacks Analyst, growth in net interest income and non-interest income has contributed to Discover Financial's top line. Its robust capital position remains a key catalyst.
Pricing Actions Aid National Steel (SID) Amid Higher Costs
Per the Zacks Analyst, National Steel's results will benefit from its pricing actions and focus on investment. However, elevated raw material costs will continue to impact margins.
Investments & Customer Additions Aid Southwest Gas (SWX)
Per the Zacks analyst, Southwest Gas' strategic investment plans will support system improvements and pipe replacement programs. Consistent customer additions will further boost its results.
American Eagle's (AEO) Aerie Brand Performs Outstandingly
Per the Zacks analyst, American Eagle's Aerie brand has been exhibiting strength for a while now. During third-quarter fiscal 2024, revenues advanced 12% year over year for the Aerie brand.
Xerox (XRX) is Gaining from Cost and Productivity Initiatives
Per the Zacks Analyst, Xerox's cost control and productivity improvement initiative called "Project Own It," is fetching results to the company in form of strong margins.
Sluggish Smartphone Market Hurts Skyworks' (SWKS) Prospects
Per Zacks analyst, Skyworks is struggling due a weak smartphone market and stiff competition from the likes of Qorvo.
Forex Volatility, Stiff Competition Continues to Ail BD (BDX)
The Zacks analyst is worried about BD's operation in a tough competitive space and a volatile foreign exchange market.
Reduced Customer Demand & Stiff Competition Ail Sonos (SONO)
Per the Zacks analyst, Sonos' performance is affected due to reduced customer demand in Europe and the APAC region amid volatile macroeconomic conditions. Also, stiff competition is a major concern.
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