Monday, March 6, 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 TotalEnergies SE (TTE), América Móvil, S.A.B. de C.V. (AMX) and Palo Alto Networks, Inc. (PANW). 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 >>>
TotalEnergies shares have modestly outperformed the Zacks Oil and Gas - Refining and Marketing industry over the past year (+28.6% vs. +25.7%). The company continues to gain from startups, well-spread LNG assets and an expanding upstream portfolio that has exposure to fast-growing hydrocarbon-producing regions.
TotalEnergies streamlines its portfolio through acquisitions, partnerships, and divestitures. It is making regular investments to expand the renewable operation and aims to achieve net-zero emissions by 2050.
However, company’s production is impacted by the natural decline of oil and natural gas fields. TotalEnergies remains exposed to acquisition-related risks as these assets contribute a sizable volume to production. It operates in some politically troubled regions, and the ongoing conflict between Russia and Ukraine might affect profitability.
(You can read the full research report on TotalEnergies here >>>)
Shares of América Móvil have outperformed the Zacks Wireless Non-US industry over the past year (+16.3% vs. -2.8%). The company’s performance is gaining from increasing broadband client base and wireless subscriber additions, especially in Brazil, Austria and Colombia. Focused 5G efforts and the deployment of state-of-the-art technologies are tailwinds.
América Móvil’s efforts to increase shareholder value, lower debt and comprehensive financing costs by selling off cellular towers to Sitios Latinoamerica bode well. However, Q4 performance was affected due to the deconsolidation of Claro Chile coupled with unfavorable foreign currency movement and weakness in service and equipment revenues.
Also, fixed-line platform performance continues to suffer owing to lower Pay TV services and softness in corporate networks and broadband revenues. AT&T’s entry into the Mexican telecom industry and leveraged balance sheet are concerns.
(You can read the full research report on America Movil here >>>)
Palo Alto Networks shares have outperformed the Zacks Security industry over the past year (+7.8% vs. +3.0%). The company has been benefiting from continuous deal wins and increasing adoption of the company’s next-generation security platforms, attributable to the rise in remote work environment and need for stronger security.
Growing traction in Prisma and Cortex offerings are acting as a tailwind. Palo Alto continues to acquire new customers and increase wallet share with existing customers. According to the Zacks analyst estimate Palo Alto’s revenues will grow at a CAGR of 21.1% through fiscal 2023-2025.
Nonetheless, the company’s higher sales incentives related to Next-Generation Security products are likely to continue negatively impacting its bottom-line results. Forex headwinds and higher marketing and sales expenses are likely to continue hurting its profitability. Moreover, high acquisition related expenses are denting the margins.
(You can read the full research report on Palo Alto Networks here >>>)
Other noteworthy reports we are featuring today include Old Dominion Freight Line (ODFL), Manulife Financial Corporation (MFC) and Laboratory Corporation of America Holdings (LH).
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
Expanding LNG & Clean Energy Assets Aid TotalEnergies (TTE)
America Movil (AMX) Benefits from Increasing Subscriber Base
Palo Alto (PANW) Rides on Shift to Subscription Services
Old Dominion (ODFL) Rides on Dividends & Buyback, Expenses Ail
The Zacks analyst likes the shareholder-friendly measures adopted by Old Dominion. However, rising operating expenses are concerning as they are likely to keep the bottom line under pressure.
Manulife Financial (MFC) to Grow on Solid Asia Business
Per the Zacks analyst, Manulife is set to grow on solid Asia and Wealth and Asset Management business and a strong capital position. Yet, high leverage and poor times interest earned concerns.
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.
United Therapeutics (UTHR) Dependence on PAH Drugs A Concern
United Therapeutics is a leader in treating pulmonary arterial hypertension (PAH) and markets four drugs. However, the company's overdependence on PAH concerns the Zacks Analyst.
Cousins Properties (CUZ) Rides on High-Quality Office Assets
Per the Zacks Analyst, Cousins Properties is well-poised to benefit from its portfolio of class A office properties in the high-growth Sun Belt markets. However, rising interest rates are a key woe.
Rise in Digital Subscribers to Lift NY Times' (NYT) Revenues
Per the Zacks analyst, The New York Times Company benefits from increase in digital subscribers. Management anticipates digital-only subscription revenues to rise 13-16% in first-quarter 2023.
Murphy USA (MUSA) Gains from Proximity to Walmart Stores
The Zacks analyst likes the proximity of Murphy USA's fuel stations to Walmart supercenters and the consistent traffic that these stores attract, thereby driving above-average fuel sales volume.
Low Demand & Cost Inflation Weigh on Stanley Black (SWK)
The Zacks analyst is concerned about weakness in the company's operations due to a low demand environment, and high raw material costs, thanks to rising inflation.
High Expenses, Leverage Concern Intercontinental Exchange (ICE)
Per the Zacks analyst, Intercontinental Exchange's increase in general, administrative, depreciation, amortization induces higher expenses that weigh on margin. Increased debt raises financial risk.
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