Friday, March 25, 2022
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), Abbott Laboratories (ABT) and The Charles Schwab Corporation (SCHW). 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
have outperformed the Zacks Internet – Services industry over the past year (+39.8% vs. +17.8%) on the back of
solid momentum across search, advertising, cloud and YouTube businesses
. Further, the growing proliferation of consumer online activities and rising advertiser spending remained tailwinds.
Alphabet’s robust cloud division continues to be the key catalyst. Moreover, expanding data centers will continue to bolster its presence in the cloud space. Further, major updates in its search segment are enhancing the search results. Moreover, Google’s mobile search is constantly gaining solid traction. Also, strong focus on AI techniques and the home automation space should aid business growth in the long term. Yet, its growing litigation issues remain concerns.
(You can
read the full research report on Alphabet here >>>
)
Abbott
shares have declined -2% over the past year against the Zacks Medical – Products industry’s decline of -7.3%. However, Abbott did post better-than-expected earnings and revenue numbers for the fourth quarter of 2021. Barring Neuromodulation (a 7.5% year-over-year decline), the company registered organic sales growth across all its operating segments.
The Zacks analyst believes that COVID-19 testing-related sales were driven by demand for BinaxNOW, Panbio and ID NOW rapid testing platforms. Within the Diabetes Care business, the company has been in the limelight for developments in its flagship, sensor-based continuous glucose monitoring system, FreeStyle Libre. Within Adult Nutrition, the company gained from the strong performance of Ensure and Glucerna brands.
However, the company’s projection indicates a fall in COVID testing revenues through the later part of 2022. Year-over-year drop in Neuromodulation sales was concerning.
(You can
read the full research report on Abbott here >>>
)
Shares of
Charles Schwab
have outperformed the Zacks Financial – Investment Bank industry over the past year (+39.3% vs. +7.6%). The Zacks analyst believes that strategic acquisitions have reinforced Schwab’s position as a leading brokerage player. The same will likely be accretive to earnings. Offering commission-free trading has led to a rise in client assets and brokerage accounts, thereby improving trading revenues.
Schwab’s efficient capital deployments reflect a solid balance sheet position, through which it will enhance shareholder value. However, despite expectations of a few rate hikes, relatively lower interest rates will likely keep hurting margins in the near term. Elevated operating expenses might hamper the company’s bottom-line growth to an extent.
(You can
read the full research report on Charles Schwab here >>>
)
Other noteworthy reports we are featuring today include Philip Morris International Inc. (PM), Canadian National Railway Company (CNI) and Air Products and Chemicals, Inc. (APD).
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
Alphabet (GOOGL) Benefits From Cloud & Search Initiatives
Abbott Thrives on COVID-19 Testing Amid Forex Woes
Buyouts, Trading Focus Aid Schwab (SCHW), Higher Costs A Woe
Featured Reports
Wide Customer Base, Renewable Focus Aid NRG Energy (NRG)
Per the Zacks analyst NRG Energy’s wide customer base provides surety to future earnings and its initiatives to trim emission will continue to boost its performance over the long-run.
Marathon (MPC) Gains from Sale of Speedway Retail Unit
The Zacks analyst likes Marathon’s sale of Speedway business, which provided a much-needed cash infusion and came with a supply agreement ensuring a steady revenue stream.
CrowdStrike (CRWD) Rides on Product Strength, Acquisitions
Per the Zacks analyst, CrowdStrike is gaining from solid contributions of its growth-oriented products, primarily Falcon platform. Moreover, strategic buyouts like Humio and Preempt are a positive.
Owens Corning (OC) Banks on Business Initiatives, Acquisition
Per the Zacks analyst, strategic initiatives like expansion via acquisitions, technology investments, commercial and operational execution, and cost controls are benefiting Owens Corning.
Phillip Morris (PM) Gains From Smoke-Free Product Category
Per the Zacks analyst, Philip Morris has been gaining from solid focus on the reduced-risk smokeless products category. In fourth quarter, sales from RRP’s increased 23.4% year over year.
Low Debt Aids Canadian National (CNI) Amid High Fuel Costs
The Zacks analyst is impressed with Canadian National’s low debt levels. However, rising fuel costs are hurting bottom-line growth.
Project Investments, Productivity to Aid Air Products (APD)
While Air Products faces headwinds from higher power and fuel costs, it should gain from investments in high-return industrial gas projects and productivity actions, per the Zacks analyst.
New Upgrades
Buyouts, Higher Fees & Commissions Aid Arthur J. Gallagher (AJG)
Per the Zacks analyst, a number of acquisitions have helped Arthur J. Gallagher to enhance its capabilities and drive growth. Also, improving fees and commissions should drive organic revenue growth.
Strong Demand & Increased Prices to Drive Sonoco (SON)
The Zacks analyst believes that Sonoco will benefit from strong demand in many of its key end market as well as strong price and cost recovery across most of its businesses.
High Demand & Online Strength Aids Nordstrom’s (JWN) Top Line
Per the Zacks analyst, Nordstrom has been gaining from solid demand for apparel and footwear as well as robust digital traffic in both Nordstrom and Nordstrom Rack. As a result, sales grew 23% in Q4.
New Downgrades
High Fuel Costs, Reduced Capacity Hurt Alaska Air (ALK)
The Zacks analyst is concerned about escalating fuel prices, which have the potential to hurt Alaska Air’s bottom line. Additionally, reduced capacity is pushing up the company’s unit costs.
Supply Chain Woes & Stiff Competition to Hurt Plexus (PLXS)
Per the Zacks analyst, pandemic induced supply chain troubles continue to be a major headwind for Plexus. Intensifying competition in the contract manufacturing space is an added concern.
Prothena’s (PRTA) Dependence on Collaboration Revenues A Woe
With no marketed drugs, Prothena is highly dependent on its pipeline candidates which are still several years from commercialization. The Zacks Analyst feels concerns for any development setback.
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