Monday, December 4, 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 Berkshire Hathaway Inc. (BRK.B), Mastercard Incorporated (MA) and ServiceNow, Inc. (NOW). 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 >>>
Berkshire Hathaway shares have outperformed the Zacks Insurance - Property and Casualty industry over the year-to-date period (+15.6% vs. +12.1%). The company is one of the largest property and casualty insurance companies with numerous diverse business activities. A strong cash position supports earnings-accretive bolt-on buyouts and is indicative of its financial flexibility.
Continued insurance business growth fuels increase in float, drive earnings and generates maximum return on equity. The non-insurance businesses have also been doing well in the last few years. The addition of Pilot Travel Centers (PTC) has strengthened its energy business. A sturdy capital level provides further impetus.
However, exposure to catastrophe loss induces earnings volatility and also affects the property and casualty underwriting results of Berkshire. Huge capital expenditure remains a headwind for the company.
(You can read the full research report on Berkshire Hathaway here >>>)
Shares of Mastercard have outperformed the Zacks Financial Transaction Services industry over the past year (+17.1% vs. +15.9%). The company has made numerous acquisitions are helping it to grow in addressable markets and drive new revenue streams.
The COVID-19 crisis accelerated the adoption of digital and contactless solutions, providing an opportunity for MA's business to expedite its shift to the digital mode. It is well-poised to gain from steady cash-generating abilities. A strong capital position allows it to pursue acquisitions and prudently deploy capital via share buybacks and dividend payments.
However, steep operating expenses might stress margins. High rebates and incentives may weigh on net revenues. Its dividend yield is still lower than the industry average. As such, the stock warrants a cautious stance.
(You can read the full research report on Mastercard here >>>)
Shares of ServiceNow have outperformed the Zacks Computers - IT Services industry over the year-to-date period (+77.9% vs. +33.6%). The company has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation.
ServiceNow had 1789 total customers with more than $1 million in annual contract value at the end of the third quarter. ServiceNow has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation. Security and risk had a terrific quarter with ten deals of more than $1 million. Employee workflows had a stellar quarter, with seven deals over $1 million and one deal over $10 million.
It is benefiting from strong demand for its generative AI-powered solutions with the launch of Vancouver. Nevertheless, ServiceNow is suffering from high inflation, stiff competition, and challenging macro-economic environment.
(You can read the full research report on ServiceNow here >>>)
Other noteworthy reports we are featuring today include Union Pacific Corporation (UNP), Applied Materials, Inc. (AMAT) and Stryker Corporation (SYK).
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 Insurance Business Aid Berkshire (BRK.B), Cat Loss Ail
Strong Cross-Border Volumes Aid Mastercard (MA), High Costs Hurt
Growing Customer Base & Partnerships Aid ServiceNow (NOW)
Cost Cuts Aid Union Pacific (UNP) Amid Weak Freight Revenues
The Zacks analyst likes the company's efforts to check costs. Union Pacific's initiatives to reward its shareholders are encouraging too. However, the sluggish freight scenario is worrisome.
Applied Materials (AMAT) Rides on Strength in AGS Segment
Per the Zacks analyst, solid adoption of 200-mm systems and strengthening subscription business are benefiting Applied Materials Applied Global Services (AGS) segment.
Diversified Product Portfolio Drives Stryker's (SYK) Prospects
Per the Zacks analyst, Stryker's diversified product portfolio, which include the robust Mako total knee platform, should support the growth of its global business.
Enbridge (ENB) Gains From Long-term Transportation Contracts
Enbridge generates stable fee-based revenues from its long-term oil and gas transportation contracts. Yet, its significant debt exposure concerns the Zacks analyst.
SOAR 2025 Moves Aid Martin Marietta (MLM), Economic Woes Ail
Per the Zacks analyst, Martin Marietta gains on strength in its SOAR (Strategic Operating Analysis & Review) 2025 initiatives. Yet, ongoing economic uncertainties and pricing fluctuations are concerns
Investments Aid AES Corp (AES) Amid the Rising Inflation
Per the Zacks Analyst, increased investments in renewables bolsters AES Corporation earnings growth prospects. Yet, the rising inflation resulting in increased expenses remains a bottleneck.
Burlington Stores' (BURL) 2.0 Initiative Appears Encouraging
Per the Zacks analyst, Burlington Stores has been progressing well on its 2.0 initiative, which is focused on marketing and merchandising efforts. Its store-expansion strategy also bodes well.
Pinterest (PINS) Rides on Surging User Base, Ad Monetization
Per the Zacks analyst, Pinterest will likely gain from greater conversion rate and improved monetization on the platform backed by continuous advancements in ad tools and enhanced personalization.
Insulet (PODD) Banks on Increasing Adoption of Omnipod 5
The Zacks analyst is optimistic about Insulet's (PODD) Omnipod 5 increasing adoption as it continues to be a driving force of strong U.S. and international growth.
Xifaxan Boosts Bausch (BHC), Efforts to Restructure Look Good
Per the Zacks analyst, Bausch maintains momentum on strong growth of Xifaxan. The company's efforts to restructure business by separating eye health business and reduce debt are encouraging.
Weak Biotechnology and Diagnostics Units Hurt Danaher (DHR)
Per the Zacks analyst, Danaher is experiencing weakness across its Biotechnology and Diagnostics Units due to decrease in the sale of COVID-related products. Forex woes are an added concern.
Keysight (KEYS) Plagued By Soft Demand, Inventory Corrections
Per the Zacks analyst, manufacturing capacity normalization, weakness in consumer electronics and constrained spending amid inventory correction will likely strain Keysight's net sales.
Lower Transactions Amid High Rates to Hurt CBRE Group (CBRE)
Per the Zacks analyst, persistent macroeconomic uncertainty and a high interest rate environment are likely to continue hurting CBRE Group's transaction-based businesses in the near term.
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