Monday, March 20, 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 Alphabet Inc. (GOOGL), Tesla, Inc. (TSLA) and Amgen Inc. (AMGN). 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 >>>
Shares of Alphabet were in line with the Zacks Internet - Services industry over the past six months (+2.3% vs. +2.4%). The company's fourth quarter results were driven by its strength in the cloud business. Solid momentum across Other Bets segment was a positive. Its robust cloud division remains the key catalyst. Expanding data centers will continue to bolster its presence in the cloud space.
Also, strong focus on AI techniques and the home automation space should aid business growth. The company’s growing efforts to gain a foothold in the healthcare industry are other positives. Its deepening focus on its wearables category remains a tailwind. Alphabet’s expanding presence in the autonomous driving space is contributing well.
However, sluggishness in the company’s advertisement business remains a major headwind. Declining YouTube and Network advertising revenues are concerns.
(You can read the full research report on Alphabet here >>>)
Shares of Tesla have declined -41.3% over the past year against the Zacks Automotive - Domestic industry’s decline of -46.3%. The company is facing inflation and economic concerns, which could pose near-term challenges, The Zacks analyst expects Tesla to deliver outsized returns in the long run on the back of output ramp-up and the introduction of new models.
Nevertheless, though Tesla witnessed a massive sell-off last year, its shares have seen a sharp rebound of late. The company's long-term prospects remain solid. The electric vehicle (EV) king is set to benefit from the soaring popularity of its Models 3 and Y. We expect deliveries to see an annualized growth of around 33% in 2023.
Production ramp-ups at gigafactory 4 (in Berlin) and 5 (in Austin) and the introduction of new models, including Semi and Cybertruck, are set to support long-term deliveries growth. Additionally, Tesla’s energy generation and storage revenues outlook is promising. Falling debt levels is another positive.
(You can read the full research report on Tesla here >>>)
Amgen’s shares have outperformed the Zacks Medical - Biomedical and Genetics industry over the past six months (+2.4% vs. +0.4%). The company beat Q4 estimates for earnings and sales. Amgen is rapidly advancing its robust pipeline. The acquisition of ChemoCentryx added a strategic new growth asset, Tavneos, to Amgen’s portfolio.
Amgen boasts a strong biosimilars portfolio with potential new products expected to drive long-term growth. While key drugs like Prolia, Repatha and Evenity are driving sales, increasing competition for its legacy products is hurting the same.
However, increased pricing headwinds and competitive pressure are hurting sales of many of Amgen’s products including some biosimilars. Increasing biosimilar competition for some legacy products and weakness in key brands like Otezla and Lumakras, create potential revenue headwinds.
(You can read the full research report on Amgen here >>>)
Other noteworthy reports we are featuring today include Fomento Económico Mexicano, S.A.B. de C.V. (FMX), FedEx Corp. (FDX) and Capital One Financial Corp. (COF).
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 Momentum in Cloud Business Benefits Alphabet (GOOGL)
Tesla (TSLA) Rides on Robust Demand for Models 3 &Y
Amgen (AMGN) Key Drugs Drive Sales Amid Biosimilar Woes
FedEx (FDX) Rides on Dividends & Buybacks Amid Volume Woes
The Zacks analyst is impressed with FedEx's efforts to reward its shareholders through dividends and buybacks. However, a decline in shipping demand is leading to volume-related concerns.
Cards, High Rates Aid Capital One (COF), Asset Quality Ails
Per the Zacks analyst, strength in credit card business, higher interest rates and loans, and strategic buyouts will support Capital One amid worsening asset quality and mounting operating expenses.
Organic Growth Aids AmerisourceBergen (ABC) Amid Competition
Per the Zacks analyst, AmerisourceBergen should benefit from continued solid organic revenue growth World Courier unit & Specialty distribution business amid cutthroat competition in the Medtech space
Pembina Pipeline (PBA) to Gain from Integrated Asset System
The Zacks analyst believes that Pembina Pipeline's integrated system of assets makes it active in almost every point in the midstream value chain but is worried about the company's high debt burden.
Portfolio Strength, Solid Demand Trends Buoy Juniper (JNPR)
Per the Zacks analyst, Juniper is likely to benefit from a strong momentum across its core industry verticals driven by healthy demand trends, accretive acquisitions and portfolio strength.
Construction Segment Aids EMCOR (EME), High Inflation Ails
Per the Zacks analyst accretive acquisitions and high contributions from the U.S. construction segments bode well for EMCOR. However supply chain risks due to Russia-Ukraine war and high inflation ail
Growing Revenues Aid Pediatrix Medical (MD), High Costs Hurt
Per the Zacks analyst, improved net acquisition activity is driving the revenues of the company. An elevated expense level puts strain on margins.
Continued Digital Investments to Drive FEMSA'S (FMX) Growth
Per the Zacks analyst, FEMSA (FMX) continues to gain from its solid online show via technology-driven initiatives. Strength in its OXXO digital wallet, OXXO Premia and loyalty program bode well.
Dr. Reddy's (RDY) Global Generics Business to Boost Future Sales
Per the Zacks analyst, Dr. Reddy's enjoy a strong foothold in the generics market with new product launches and pending filings. The company's strategic initiatives are expected to mitigate challenges
Inter Parfums' (IPAR) Sales Gain on Solid Brand Performance
Per the Zacks analyst, Inter Parfums' sales are benefiting from solid brand growth, which continued in the fourth quarter of 2022. Net sales of $311 million rose 47% year over year in the quarter.
Rising Operating Expenses and Capex to Ail Westport (WPRT)
Per the Zacks Analyst, rising operating expenses and capex requirements related to HPDI products and de-carbonization of hydrogen fuels are set to dent Westport's margin.
Higher Spending Amid Subscriber Decline Hurts Tegna (TGNA)
Per the Zacks analyst, declining subscriber growth is compelling Tegna to spend on higher programming fees and investments in growth initiatives thereby keeping margins under pressure.
Rising Rates, Seasonality of Business Ail MDU Resources (MDU)
Per the Zacks analyst, MDU Resources' margins can impacted by rising interest rates. Seasonality of business operations may significantly reduce demand and adversely impact its overall performance.
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