Monday, May 22, 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 Oracle Corporation (ORCL), NIKE, Inc. (NKE) and Starbucks Corporation (SBUX). 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 >>>
Oracle shares have outperformed the Zacks Computer - Software industry over the past year (+49.5% vs. +22.8%). The company is benefiting from the ongoing momentum across its cloud business, driven by the strong uptake of Oracle Cloud Infrastructure services and Autonomous Database offerings.
Solid adoption of cloud-based applications, comprising NetSuite Enterprise Resource Planning (ERP), Fusion ERP and Fusion Human Capital Management (HCM), bodes well. Solid demand for the Oracle Dedicated Region Cloud@Customer is anticipated to drive the top line. Partnerships with Accenture and Microsoft is helping Oracle win new clientele.
However, higher spending on product enhancements, especially toward the cloud platform, amid increasing competition in the cloud domain is likely to limit margin expansion. The Zacks analyst expects fiscal 2023 non-GAAP operating expenses to jump 14.1% over fiscal 2022.
(You can read the full research report on Oracle here >>>)
Shares of NIKE have gained +6.8% over the past year against the Zacks Shoes and Retail Apparel industry’s gain of +9.7%. The company’s results gained from the Consumer Direct Acceleration strategy, compelling product innovation and solid online show.
The company witnessed double-digit revenue growth across North America, EMEA and APLA. For fiscal 2023, it expects revenue growth in the high-single digits, up from the prior mentioned mid-single-digit growth and in line with our estimate of 8.6% growth.
However, NIKE witnessed decline in gross margin due to higher markdowns, increased freight and logistics costs, elevated input costs and currency headwinds. Also, elevated SG&A expenses are concerning.
(You can read the full research report on NIKE here >>>)
Starbucks shares have outperformed the Zacks Retail - Restaurants industry over the past year (+46.8% vs. +34.7%). The company’s growth is attributable to comps growth in all its operational segments along with impressive revenue recovery from China after COVID-19.
Starbucks focus on product innovation and store growth added to the uptrend. For fiscal 2023, the company expects consolidated revenues and global comparable store sales to be in the range of 10-12% and the high end of 7-9%, respectively, year over year.
Earnings estimates for fiscal 2023 increased to $3.44 per share from $3.42 in the past 30 days. However, increased expenses and inflation are concerns.
(You can read the full research report on Starbucks here >>>)
Other noteworthy reports we are featuring today include Caterpillar Inc. (CAT), Equinor ASA (EQNR) and ABB Ltd (ABB).
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
Oracle (ORCL) Rides on Cloud Suite Adoption & Partnerships
Improved Traffic & Digital Trends Aid NIKE (NKE) Direct
Solid Comps Growth Aids Starbucks (SBUX), High Inflation Ail
Caterpillar (CAT) to Gain on Strong Demand in End Markets
Per the Zacks analyst, solid backlog, improving end-market demand and focus on making strategic investments in expanded offerings, services and digital initiatives will drive Caterpillar's results.
Equinor (EQNR) to Benefit From Rising Clean Energy Demand
The Zacks analyst is impressed by Equinor's massive investments in renewable projects, comprising solar and wind energy. With this, the company can capitalize on the rising clean energy demand.
Robust Customer Activity Aids ABB Amid Currency Woes
The Zacks analyst is encouraged by ABB's growth on the back of robust customer activity and pricing actions. However, foreign currency headwinds are affecting the company's top line.
Solid Storage, Data Center Demand Aids Iron Mountain (IRM)
Per the Zacks analyst, Iron Mountain to benefit from strong cash flows in the storage and records management business and its focus on data center business. However, stiff competition is a key woe.
Infrastructure Investments, Clean Assets Aid NiSource (NI)
Per the Zacks analyst NiSource' planned investment of $15 billion through 2027, will further strengthen its infrastructure, & adding more clean assets in generation portfolio will drive its performance.
Digital Transformation, Buyouts Aid DXC Technology (DXC)
Per the Zacks analyst, DXC Technology is benefiting from ongoing digital transformations and adoption of its solutions. Also, strategic acquisitions like Virtual Clarity and Bluleader are a positive.
Nuplazid Boosts Acadia (ACAD), Competition remains a woe
Per the Zacks Analyst, the approval of trofinetide will bring incremental revenues to Acadia, reducing the burden on Nuplazid. However, stiff competition and pipeline setbacks could hurt the stock.
Business Recovery Aids Zimmer Biomet (ZBH), EMEA Sales Grow
The Zacks analyst is impressed with Zimmer Biomet's strong procedure recovery globally. EMEA is growing ahead of expectations, driven by robust sales across both developed and emerging markets.
Strong Segmental Results Drive Unum Group (UNM)
Per the Zacks analyst, Unum Group's discipline sales trends, strong persistency, favorable benefits experience in segments and solid capital position poise the insurer well for growth.
Viasat's (VSAT) Margins Likely to be Buoyed by Inmarsat Buyout
Per the Zacks analyst, the acquisition of Inmarsat is expected to strengthen Viasat's portfolio with enhanced service offerings, drive innovation and expedite commercial expansion.
Knight-Swift (KNX) Grapples With Challenging Freight Market
Per the Zacks analyst, softness in freight demand hurt Knight-Swift's first-quarter 2023 results. Management lowered the 2023 earnings per share guidance mainly due to freight weakness.
Rising Costs & Expenses Ail Red Robin's (RRGB) Performance
Per the Zacks Analyst, rising costs and expenses, inflationary pressure and raised wage have been hurting Red Robin. High debt and limited focus on franchising are added concerns.
ADTRAN (ADTN) Plagued by Margin Woes, Sino-US Trade War
Per the Zacks analyst, ADTRAN's margins are likely to be dented by high operating and R&D costs, foreign exchange volatility, supply chain disruptions and latent Sino-U.S. geopolitical tensions.
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