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Top Analyst Reports for Oracle, Bank of America & McDonald's

Thursday, May 16, 2024

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), Bank of America Corporation (BAC) and McDonald's Corporation (MCD), as well as two micro-cap stocks Miller Industries, Inc. (MLR) and Via Renewables, Inc. (VIA). 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 year-to-date period (+16.1% vs. +10.1%). The company is gaining from the ongoing momentum across its cloud business, driven by the strong uptake of Oracle Cloud Infrastructure and Autonomous Database offerings. The solid adoption of cloud-based applications, comprising NetSuite Enterprise Resource Planning (ERP) and Fusion ERP bodes well.

Oracle’s Gen 2 Cloud is delivering better performance at a lower cost due to high bandwidth and low-latency RDMA networks. ORCL’s continued investment in cloud infrastructure positions it well for sustained growth in the dynamic software industry. The company’s partnership with Microsoft and Nvidia is noteworthy. We expect fiscal 2024 net sales to grow 6.3% from 2023.

However, higher spending on product enhancements, especially toward the cloud platform amid increasing competition in the cloud domain, is likely to limit margin expansion.

(You can read the full research report on Oracle here >>>)

Shares of Bank of America have gained +16.3% over the year-to-date period against the Zacks Banks - Major Regional industry’s gain of +17.8%. The company’s first-quarter 2024 results were aided by strength in the investment banking (IB) business. While higher funding costs are a concern, the company’s net interest income (NII) will likely be positively impacted in the current high-rate environment.

The opening of financial centers and improved digital capabilities will support the top line. While the capital markets activity improved of late, the challenging macroeconomic environment might once again weigh on the IB business. Due to investments in franchise, overall costs will remain high.

(You can read the full research report on Bank of America here >>>)

McDonald's shares have underperformed the Zacks Retail - Restaurants industry over the year-to-date period (-7.1% vs. -2.4%). The company’s increased costs and expenses negatively impacted the first quarter’s bottom line. McDonald’s expectation of increased commodity and labor inflation is concerning for its prospects.

Nevertheless, the top and bottom lines increased year over year by 5% and 2%, respectively. The company’s results showcase increasing global comparable sales and systemwide sales to loyalty members.

The uptrend was backed by average check growth driven by strategic menu price increases, effective marketing campaigns, along with continued digital and delivery growth. Also, its focus on Accelerating the Arches strategy is encouraging.

(You can read the full research report on McDonald’s here >>>)

Shares of Miller Industries have outperformed the Zacks Automotive - Original Equipment industry over the past year (+76.7% vs. -10.4%). The company showcases strong growth, with Q1 2024 revenues hitting $349.9 million, up 24% year over year, driven by increased demand and chassis shipments. Gross profit rose 45.5% to $44.2 million, with margins expanding to 12.6% due to enhanced manufacturing and supply chain efficiencies.

The firm boosts shareholder value with a 5.6% dividend increase and a $25 million share repurchase plan, reflecting confidence in its financial stability and long-term strategy. Positioned as a leader in the growing global towing equipment market, Miller benefits from its broad product range and strong brand while continuing to innovate, like their patented LCG design in car carriers.

However, challenges include intense competition, volatile raw material costs, regulatory uncertainties, and reliance on specific market sectors, posing risks to profitability.

(You can read the full research report on Miller Industries here >>>)

Via Renewables’ shares have gained +24.8% over the past six months against the Zacks Alternative Energy - Other industry’s gain of +36.3%. The company demonstrates robust customer growth, adding 41,000 RCEs in first-quarter 2024, reaching 338,000. This, coupled with a recent acquisition of 12,500 RCEs, indicates effective growth strategies.

Financially, VIA rebounded with a first-quarter net income of $19.1 million, reversing a previous loss in the prior-year quarter on favorable hedge gains. VIA boosted its net cash from operations in the first quarter, signaling improved efficiency and capital management.

However, challenges persist with a decrease in adjusted EBITDA and retail gross margins, primarily in the electricity and natural gas segments. Rising G&A expenses and high competition, alongside customer acquisition costs, further pressure profitability. These factors, combined with credit risks in certain utility territories, may impact long-term financial health.

(You can read the full research report on Via Renewables here >>>)

Other noteworthy reports we are featuring today include Eaton Corporation plc (ETN), Honeywell International Inc. (HON) and Sanofi (SNY).

Director of Research

Sheraz Mian

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) Gains from Cloud Suite Adoption & Partnerships

High Rates Aid Bank of America (BAC) Amid Market Volatility


McDonald's (MCD) Banks on Solid Comps Growth Amid High Costs

Featured Reports

Wide Market Reach, New Product Development Aid Eaton (ETN)
Per the Zacks analyst Eaton's operations in 175 countries across the world and development of new products through ongoing R&D investments will continue to drive demand and boost profitability.

Strength in Aerospace Unit Aids Honeywell (HON), Costs Hurt
Per the Zacks analyst, Honeywell will benefit from strength in Aerospace segment, led by strong commercial aftermarket and commercial aviation demand. However, high costs remain concerning.

Dupixent to Remain Sanofi's (SNY) Key Top-Line Driver
The Zacks analyst expects Dupixent to remain Sanofi's key top-line driver for Sanofi as it enjoys strong demand trends. However, 2024 profits are expected to decline due to higher R&D costs and taxes.

Better Pricing, New Business Growth Drive Chubb Limited (CB)
Per the Zacks analyst, Chubb is set to grow on better pricing, new business growth & high renewal rates. Yet, exposure to cat loss induces underwriting volatility while rising costs pressurize margin.

Colgate's (CL) Innovation & Pricing Initiatives Bode Well
Per the Zacks analyst, Colgate has been gaining from continued strong pricing and the benefits of other productivity initiatives. The company's innovation strategy also bodes well.

Strong Product Portfolio Aids DexCom (DXCM) Fight Competition
Per the Zacks analyst, DexCom strong product portfolio targeting the large and growing diabetes market is helping the company fight intensifying competition with entry new competing products.

Suncor (SU) Buoyed by Integrated Business Model
The Zacks analyst believes that Suncor's integrated business model positions it well for strong cash flow generation. However, the company's high oil price sensitivity is a concern.

New Upgrades

Aptiv (APTV) Benefits From Hohle & Wind River Acquisitions
Per the Zacks analyst, the Hohle acquisition boosts Aptiv's Signal and Power Solutions segment. Wind River expands the company's position in the automotive software solutions market.

Onto Innovation (ONTO) Benefits From Solid Product Portfolio
Per the Zacks analyst, Onto Innovation's performance benefits from increasing demand for the Dragonfly inspection system. Rising demand for advanced packaging of AI compute devices bodes well.

NexSys PCS System Continues to Thrive Haemonetics (HAE)
The Zacks analyst is impressed with Haemonetics' NexSys PCS with Persona which is enabling customers to safely meet end-market demand and lower their cost per liter.

New Downgrades

Werner (WERN) Continues to Grapple With Weak Freight Market
The Zacks Analyst believes that as a result of the weakness in the freight market, management gave a bearish 2024 guidance regarding the Truckload Transportation Services segment.

Avnet (AVT) Hurt by Declining Demand, High Inventory Levels
Per the Zacks analyst, softened demand in a tight IT spending environment, along with high inventory levels at customers, is likely to hurt Avnet's financial performance in the near term.

Dismal Comps Performance Hurt Papa John's (PZZA) Prospects
Per the Zacks analyst, Papa John's comps is affected by challenging macroeconomic conditions, lower transactions and a decline in organic delivery. Also, conflict in the Middle East is a concern.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Bank of America Corporation (BAC) : Free Stock Analysis Report

Sanofi (SNY) : Free Stock Analysis Report

Honeywell International Inc. (HON) : Free Stock Analysis Report

Eaton Corporation, PLC (ETN) : Free Stock Analysis Report

McDonald's Corporation (MCD) : Free Stock Analysis Report

Oracle Corporation (ORCL) : Free Stock Analysis Report

Via Renewables, Inc. (VIA) : Free Stock Analysis Report

Miller Industries, Inc. (MLR) : Free Stock Analysis Report

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Zacks Investment Research