Top Stock Reports for Walmart, BHP & IBM

Wednesday, July 08, 2020

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 Walmart (WMT), BHP Group (BHP) and International Business Machines (IBM). 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 >>>

Walmart shares have only modestly lagged the Zacks Supermarkets industry over the past year (+12.5% vs. +13.8%), with the group benefiting from increased demand for essential items amid coronavirus.

Such trends drove the company in first-quarter fiscal 2021, wherein top and bottom lines rose year over year and beat the consensus mark, and U.S. comps grew for the 23rd straight time. Further, higher stay-at-home trends boosted e-commerce sales. Walmart has long been witnessing solid e-commerce sales, largely backed by grocery delivery.

Notably, it recently unveiled Express Delivery service to expedite deliveries amid coronavirus. The company is also undertaking other measures to support operations amid the pandemic, which however entail high costs and pose threats to the operating income. Also, the gross margin has been strained due to unfavorable mix and pricing. 

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

Shares of BHP Group have gained +67% over the past six months against the Zacks Mining - Miscellaneous industry’s rise of +18%. The Zacks analyst believes that its strong cash flow and focus on lowering debt will help it sail through these turbulent times. BHP Group is making operations more efficient on the back of smarter technology adoption across the entire value chain, which in turn will drive results.

BHP Group’s copper and iron ore production improved year over year in the nine-month period ended Mar 31, 2020, while petroleum, metallurgical coal, energy coal and nickel production declined. The company affirmed production and cost guidance for fiscal 2020 despite the pandemic.

The company will also benefit from the recent surge in iron and copper prices. The consensus estimate for earnings for the current fiscal year has thus undergone positive revisions lately. It has six major projects under development in petroleum, copper, iron ore and potash, which will drive growth in the long run.

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

IBM shares have lost -3.2% over the past three months against the S&P 500’s rise of +13.4%. This underperformance notwithstanding, the Zacks analyst believes that IBM is well placed in the hosted cloud, security and analytics domains.

Moreover, Red Hat acquisition has helped IBM to enhance containerized software capabilities and strengthen competitive position in the hybrid cloud market. Further, growing clout of Watson Health and growth in Payer, Provider, Imaging and Life Sciences verticals are noteworthy. Also, gains from z15 hold promise.

However, stiff competition in the cloud computing market remains a woe. Notably, adoption of cognitive applications and transaction processing platforms in March was affected by coronavirus outbreak, which is a major concern. For 2020, IBM has withdrawn guidance, citing uncertainty pertaining to coronavirus crisis. Also, a highly leveraged balance sheet, adds to the risks.

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

Other noteworthy reports we are featuring today include Costco Wholesale (COST), Citigroup (C) and Morgan Stanley (MS).

5 Stocks to Soar Past the Pandemic: In addition to the companies you learned about above, we invite you to learn about 5 cutting-edge stocks that could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of the decade.

See the 5 high-tech stocks now>>

Sheraz Mian

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

Walmart's (WMT) Top Line Gains From Coronavirus-Led Demand

Liquidity, High Iron Prices to Aid BHP Group (BHP)

Robust Adoption of Cloud Solutions Aids IBM Amid High Debt

Featured Reports

Decent Comps to Fuel Costco's (COST) Sales, Cost a Concern

Per the Zacks analyst, Costco's growth strategies, decent comps run and strong membership trends are likely to fuel sales.

Focus on Core Operations Aid Citigroup (C), Legal Woes Linger

Per the Zacks analyst, Citigroup is working hard on restructuring activities to focus on core operations aiding top-line growth.

Buyouts, Loans Support Morgan Stanley (MS) Amid Lower Rates

Per the Zacks analyst, inorganic growth strategy, focus on less capital-market dependent businesses and decent loan demand will support Morgan Stanley.

Bayer (BAYRY) Boasts Strong Portfolio Amidst Competition

Per the Zacks analyst, Bayer's pharmaceutical products launched over the last few quarters should continue to drive top line at the company.

Southern Company (SO) Buoyed by Regulated Customer Growth

The Zacks analyst believes that increase in Southern Company's regulated business customer base will support its revenue growth.

Permian Focus Aids Occidental (OXY) Amid Rising Debt Level

Per the Zacks analyst Occidental's acquisition of Anadarko expanded its operation in resource rich Permian Basin, but its long term debt level is a concern amid choppy commodity prices and demand.

Strong PCR Product Sales Aid Bio-Rad (BIO) amid Pandemic Woes

The Zacks analyst is impressed with uptick in Bio-Rad's core PCR and Droplet Digital PCR product revenues resulting from robust COVID-19 testing demand.

New Upgrades

Papa John's (PZZA) Rides on Digital & Franchising Initiatives

Per the Zacks analyst, Papa John's benefits from product innovations, strategic partnerships, international expansion and franchising efforts.

Viper Energy (VNOM) Banks on Eagle Ford & Permian Acreages

The Zacks analyst believes that Viper Energy will generate strong and steady royalty income from mineral interests in the Eagle Ford & Permian acreages.

Sally Beauty (SBH) Gains From Online Sales Amid COVID-19

Per the Zacks analyst, Sally Beauty (SBH) is gaining from solid online sales amid COVID-19. Notably, management expects triple-digit e-commerce growth across all segments in fiscal third-quarter.

New Downgrades

Higher DTC Losses & Debt Hinders Disney's (DIS) Progress

Per the Zacks analyst, coronavirus-led uncertainty, higher operating losses in Direct-to-Consumer (DTC) business and a debt-ridden balance sheet are expected to impede Disney's growth.

CDW's Growth Prospects to be Hurt by Lower IT Spending

Per the Zacks Analyst, CDW's growth prospects might be hurt by soft IT spending as organizations are pushing back their investments in big and expensive tech products amid the coronavirus crisis.

Consumer Activity Disruptions Amid COVID-19 Ails Yelp (YELP)

Per the Zacks analyst, coronavirus-led restrictions on public life are hurting restaurants and retail, which pay Yelp to provide their information online. This, in turn, is affecting Yelp's top line.

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Walmart Inc. (WMT) : Free Stock Analysis Report
 
Morgan Stanley (MS) : Free Stock Analysis Report
 
International Business Machines Corporation (IBM) : Free Stock Analysis Report
 
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
 
Citigroup Inc. (C) : Free Stock Analysis Report
 
BHP Group Limited (BHP) : Free Stock Analysis Report
 
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