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Top Stock Reports for Procter & Gamble, ServiceNow & Lockheed Martin

Tuesday, June 11, 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 The Procter & Gamble Company (PG), ServiceNow, Inc. (NOW) and Lockheed Martin Corporation (LMT), as well as a micro-cap stock Steel Partners Holdings L.P. (SPLP). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.

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 >>>

Today's Research Daily also features the monthly Equity Strategy report from our Chief Equity Strategist where he discusses the outlook the outlook for the Tech sector in general and the 'Magnificent 7' stocks.

You can find full June Equity Strategy report here >>> Strong Mega-Cap Profit Center in the S&P

Procter & Gamble shares have modestly outperformed the Zacks Soap and Cleaning Materials industry over the past year (+18.0% vs. +17.6%). The company has been gaining from robust pricing and a favorable mix, along with strength across segments. It has been focused on productivity and cost-saving plans to boost margins.

This led to bottom line beating the consensus mark for the seventh consecutive quarter in third-quarter fiscal 2024. Consequently, PG has provided an optimistic fiscal 2024 view.

However, the company has been witnessing supply-chain issues, higher SG&A costs, higher transportation costs and rising inflation. Its significant international presence exposes it to foreign currency risks, which acts as a headwind.

(You can read the full research report on Procter & Gamble here >>>)

Shares of ServiceNow have gained +0.4% over the year-to-date period against the Zacks Computers - IT Services industry’s gain of +5.1%. The company has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation. ServiceNow had 1933 total customers with more than $1 million in annual contract value at the end of the first quarter.

ServiceNow had eight deals greater than $5 million in net new ACV, and four deals of more than $10 million. It closed 59 deals greater than $1 million net new ACV. Number of customers contributing more than $20 million or more grew 50% year over year.

Generative AI deals continued to gain traction with record-breaking net new ACV for Pro Plus, making it the fastest-selling product in ServiceNow’s history. Nevertheless, ServiceNow is suffering from high inflation, stiff competition, and challenging macro-economic environment.

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

Lockheed Martin shares have outperformed the Zacks Aerospace - Defense industry over the past year (+4.5% vs. -10.1%). The company’s broad product offerings allow it to secure big defense contracts from the Pentagon and other U.S. allies, which in turn boosts its backlog count, which was a record $159.4 billion as of Mar 31, 2024.

Lockheed Martin remains the largest U.S. defense contractor with a steady order flow from its leveraged presence in the Army, Air Force, Navy and IT programs. The solid U.S. defense budgetary provisions should boost its business. The company’s products also witness a strong international demand.

However, Lockheed is facing performance issues concerning some of its products that may affect its results. Shortage of skilled labor may adversely impact Lockheed’s operating results. China’s sanctions imposed on Lockheed might also affect its business.

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

Shares of Steel Partners have underperformed the Zacks Diversified Operations industry over the year-to-date period (-8.5% vs. +0.9%). This microcap company with market capitalization of $747.01 million has a diversified portfolio across various sectors and the inclusion of Steel Connect, SPLP mitigates risks and boosts growth. As of Mar 31, 2024, SPLP had $273.9 million in cash, with debt reduced to $92.8 million. SPLP also reduced interest expenses by 76.7% in the first quarter.

Yet, the adjusted EBITDA margin declined from 14.2% to 12.3% in the first quarter of 2024 due to an underperformance in the Energy and Diversified Industrial segments. Energy revenues fell 33.7% and Diversified Industrial sales decreased 3.9%, impacting profitability. Also, fluctuations due to geopolitical tensions impact operational costs and investor confidence.

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

Other noteworthy reports we are featuring today include Regeneron Pharmaceuticals, Inc. (REGN), McKesson Corporation (MCK) and Suncor Energy Inc. (SU).

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

P&G's (PG) Productivity & Cost Savings Plan to Aid Margins


Growing Customer Base & Partnerships Aid ServiceNow (NOW)

Order Growth Boosts Lockheed (LMT), Tiff With Turkey Ails

Featured Reports

Dupixent Profits Fuels Regeneron (REGN), Eylea Decline A Woe
Per the Zacks analyst, stellar performance of Dupixent fuels Regeneron even as lead drug Eylea faces challenges. The company's progress with the oncology portfolio is also impressive.

Demand for Specialty Products Driving McKesson (MCK) Prospects
Per the Zacks analyst, McKesson's distribution segment will continue to benefit from higher volume of specialty products coupled with price rise. Rising demand for extended and primary care buoys well

Suncor (SU) Supported 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.

Extra Space Storage (EXR) Aided by Buyouts Amid High Rates
Per the Zacks analyst, its high brand value, geographically diversified portfolio and accretive buyouts are likely to aid Extra Space Storage's performance despite a high interest rate environment.

Zscaler (ZS) Benefits From Acquisitions & Product Refreshes
Per the Zacks analyst, Zscaler is benefiting from its strategic acquisitions like Canonic Security and ShiftRight. Moreover, frequent product refreshes are helping it in gaining new customers.

Strategic Acquisitions Aid Franklin (BEN) Amid Rising Costs
Per the Zacks analyst, Franklin will continue to benefit from opportunistic acquisitions and solid AUM balance. Yet, concentrated and volatile revenues and elevated expenses remain major challenges.

DocuSign (DOCU) Gains From eSignature Strength, Investments
The Zacks analyst is positive about DocuSign's top line as it is significantly benefiting from continued customer demand for eSignature. Investments in technical expertise are also reaping benefits.

New Upgrades

Growth Projects, Newcrest Buyout Aid Newmont (NEM)
Per the Zacks analyst, Newmont will gain from the progress of its key growth projects. The Newcrest acquisition has also created an industry-leading portfolio and will deliver significant synergies.

Robust Construction Activity & Acquisitions Aid EMCOR (EME)
Per the Zacks analyst, EMCOR is benefiting from increased project flows from high-tech manufacturing and network and communications market sectors. Also, focus on acquisitions bode well.

Growing Top Line, Solid Capital Position Aid Palomar (PLMR)
Per the Zacks analyst, Palomar's growing revenues driven by higher premiums and net investment income have led to significant growth. Moreover, robust capital position supports capital deployment.

New Downgrades

Weak Residential Kitchen Equipment Unit Hurt Middleby (MIDD)
Per the Zacks analyst, Middleby is experiencing softness in the Residential Kitchen Equipment segment due to lower demand for residential kitchen products. Forex woes are an added concern.

Ubiquiti (UI) Plagued by Soft Demand, Fierce Competition
Per the Zacks analyst, increasing competition in the wireless equipment market, combined with demand softness in the Service Provider Technology segment, will likely impede Ubiquiti's top line.

Built to Order Model Aids KB Home (KBH), High Costs Hurt
Per the Zacks analyst, KB Home is aiding from improving housing market conditions, low cancellation rate and Built to Order model. Yet, increasing costs and expenses along with labor inflation hurt.

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

Lockheed Martin Corporation (LMT) : Free Stock Analysis Report

Regeneron Pharmaceuticals, Inc. (REGN) : Free Stock Analysis Report

Procter & Gamble Company (The) (PG) : Free Stock Analysis Report

McKesson Corporation (MCK) : Free Stock Analysis Report

Suncor Energy Inc. (SU) : Free Stock Analysis Report

ServiceNow, Inc. (NOW) : Free Stock Analysis Report

Steel Partners Holdings LP (SPLP): Free Stock Analysis Report

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Zacks Investment Research