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Top Analyst Reports for BHP Group, UPS, Adobe & Others

·6 min read

Thursday, September 22, 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 BHP Group Limited (BHP), United Parcel Service, Inc. (UPS) and Adobe Inc. (ADBE). 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 >>>

BHP Group shares have declined -7% over the past year against the Zacks Mining - Miscellaneous industry’s decline of -15.5% and the S&P 500 index's -16.1% decline. The outlook for BHP's commodities remains favorable, notwithstanding near-term macroeconomic headwinds, particularly the uncertain outlook for China.

The recent pullback in iron ore prices nothwithstanding, the Zacks analyst expects the commodity regain ground in the medium to long run on pent-up demand in the automotive sector, infrastructure and the housing market. Copper and nickel prices will also be fueled by demand for electric vehicles.  

BHP will benefit from its efforts to make operations more efficient through smart technology adoption across the entire value chain. Investment in growth projects with a particular focus on commodities like copper, nickel and potash will aid growth as well. The company’s iron ore production guidance for fiscal 2023 is 249-260 Mt. The midpoint of the range indicates a 1% increase from the prior-year tally.

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

UPS shares have handily outperformed rival FedEx over the past year (down -9.2% vs. -33.2%) despite faced with most of the same macroeconomic challenges.

Even though economies are reopening, the urge for online shopping refuses to relent among consumers. High shipping rates also bode well for UPS. Moreover, its strong free cash flow generating ability pleases us and supports UPS' shareholder-friendly activities.

In first-half 2022, UPS generated a free cash flow of $6,895 million compared with $6,804 million in first-half 2021. UPS paid out dividends worth $3,437 million in 2021, up 1.9% year over year. UPS aims to reward its shareholders with $8.2 billion in 2022, through dividends ($5.2 billion) and share buybacks ($3 billion).

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

Adobe shares have declined -55.2% over the past year against the Zacks Computer - Software industry’s decline of -27.5%, with the stock really losing ground following the weak(ish) quarterly report when it guided lower. The Figma acquisition has also weighed on the stock lately, as the market sees the purchase price to be on the high side.

Adobe's Creative Cloud, Document Cloud and Adobe Experience Cloud products drove the top-line growth in the quarterly report. Further, rising subscription revenues and solid momentum across the mobile apps remained major positives. Growth in emerging markets, robust online video creation demand and solid adoption of Acrobat are tailwinds.

Also, continued key customer wins of the company are contributing well. We remain optimistic about Adobe’s market position, compelling product lines, continued innovation, strategic acquisitions and solid adoption of cloud applications.

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

Other noteworthy reports we are featuring today include The Charles Schwab Corporation (SCHW), EOG Resources, Inc. (EOG), and América Móvil, S.A.B. de C.V. (AMX).

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

BHP Group (BHP) Bets on Operation Efficiency Amid High Costs

Dividends & Buybacks Boost UPS' Prospects Despite Cost Woes

Adobe (ADBE) Rides on Growing Adoption of Cloud Applications

Featured Reports

Strategic Acquisitions Aid Schwab (SCHW) Amid Cost Concerns
Per the Zacks analyst, while Schwab's inorganic growth initiatives and other revenue diversification efforts will aid profits, it might lead to higher costs, thus hurting the bottom line to an extent.

EOG Resources (EOG) Banks On Oil-Rich Delaware Basin Assets
The Zacks analyst believes that EOG Resources' 6,620 net undrilled premium locations in the Delaware basin will drive oil production growth. However, rising lease and well expenses are concerning.

America Movil (AMX) Benefits from Increasing Subscriber Base
Per the Zacks analyst, America Movil's performance is gaining from increased broadband client base. However, stiff competition and the firm's high leverage remain concerns.

New Product Development, Wide Market Reach 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.

Moderna's (MRNA) Dependence on COVID-19 Vaccine Sales A Woe
Though Moderna's COVID vaccine sales have significantly boosted its cash resources, the Zacks Analyst is concerned since the company's other pipeline candidates are years away from commercialization.

Robust Digital Sales Aid Walgreens (WBA) Amid High Costs
The Zack analyst is encouraged by Walgreens' (WBA) improved online growth momentum led by strong digital sales in the United States. Yet, mounting expenses weigh on the company's bottom line.

Solid Project Execution Aids Quanta (PWR) Amid Project Delays
Per the Zacks analyst, Quanta benefits from solid project execution strategy and three-pronged growth plan. Yet, project variability and elevated consumables costs due to supply-chain disruptions ail.

New Upgrades

Paylocity Holding (PCTY) Benefits From Growing Customer Base
Per the Zacks Analyst, Paylocity Holding is benefiting from its differentiated employee strategy, comprehensive product offerings and on-demand pay facility, that are helping it win new customers.

RBC Bearings (ROLL) Rides on Industrial Segment Strength
Per the Zacks analyst, strong performance of the Industrial segment owing to strength in semiconductor, mining, energy, and general industrial end markets, supports RBC Bearings' growth.

Triton (TRTN) Benefits From Dividends & Share Repurchases
The Zacks analyst likes the shareholder-friendly measures adopted by Triton. Gradual increase in trade volumes and container demand also bode well for the company.

New Downgrades

Soft Comps Performance to Hurt Children's Place (PLCE) Sales
Per the Zacks analyst, persistent of soft comps performance may hurt Children's Place sales. The company expects a low-double-digit decline in comps in both the third quarter as well as fiscal year.

Rising SG&A Expenses are a Concern for Wolverine (WWW)
Per the Zacks analyst, rise in SG&A costs is a concern for Wolverine. Adjusted SG&A expenses jumped 13% to $228.5 million due to higher variable costs in the second quarter of 2022.

Exposure to Cat Loss, Rising Costs Ail Cincinnati (CINF)
Per the Zacks analyst, Cincinnati Financial's exposure to catastrophe events induces underwriting volatility while rising costs weigh on margin, in turn both affecting profitability.


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
 
America Movil, S.A.B. de C.V. (AMX) : Free Stock Analysis Report
 
BHP Group Limited Sponsored ADR (BHP) : Free Stock Analysis Report
 
United Parcel Service, Inc. (UPS) : Free Stock Analysis Report
 
The Charles Schwab Corporation (SCHW) : Free Stock Analysis Report
 
EOG Resources, Inc. (EOG) : Free Stock Analysis Report
 
Adobe Inc. (ADBE) : Free Stock Analysis Report
 
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