Friday, May 5, 2023
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 Exxon Mobil Corporation (XOM), Costco Wholesale Corporation (COST), and Activision Blizzard, Inc. (ATVI). 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 >>>
Exxon Mobil shares have outperformed the Zacks Oil and Gas - Integrated - International industry over the past year (+15.6% vs. +3.5%) on the back of the company's bellwether status and an optimal integrated capital structure that has historically produced industry-leading returns make it a relatively lower-risk energy sector play.
The firm has made more than 30 discoveries in offshore Guyana since 2015. ExxonMobil also has a strong presence in the prolific Permian Basin, where it delivered record production in 2022. Also, a strong presence in chemicals and refining operations is noteworthy.
However, ExxonMobil has constantly been bearing the brunt of increasing costs, adversely affecting its income. Also, the company’s financials were weakened by years-long significant spending on low-return developments and the pandemic.
(You can read the full research report on Exxon Mobil here >>>)
Shares of Costco have declined -2.6% over the past year against the Zacks Retail - Discount Stores industry’s decline of -4.5%. The Zacks analyst, however, believes that the company being a consumer defensive stock, has been surviving the market turmoil pretty well. The discount retailer’s key strengths are strategic investments, a customer-centric approach, merchandise initiatives, and an emphasis on membership growth.
Its business can navigate the ongoing inflationary environment and supply chain bottlenecks on several fronts. A favorable product mix, steady store traffic, pricing power, and strong liquidity position should help Costco.
(You can read the full research report on Costco here >>>)
Activision Blizzard shares have outperformed the Zacks Toys - Games - Hobbies industry over the past six months (+5.0% vs. +1.6%), though the stock has lost ground lately following unfavorable regulatory action on its Microsoft deal out of the U.K.
Activision’s first-quarter 2023 earnings and revenues increased year-over-year. First-quarter growth was broad-based, with net bookings increasing year-over-year in Call of Duty, Candy Crush, Warcraft, Overwatch, and Diablo. Call of Duty in-game net bookings on console and PC grew strongly year-over-year in the first quarter.
The Zacks analyst believes that Diablo Immortal on mobile and PC also contributed to Blizzard’s first-quarter net bookings growth. Candy Crush payer numbers again grew year-over-year, and Candy Crush was the top-grossing game franchise in the U.S. app stores for the 23rd quarter in a row.
(You can read the full research report on Activision Blizzard here >>>)
Other noteworthy reports we are featuring today include Biogen Inc. (BIIB), General Dynamics Corporation (GD) and Arista Networks, Inc. (ANET).
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
ExxonMobil (XOM) Banks on Prolific Permian & Guyana Assets
Decent Comparable Sales Run to Fuel Costco's (COST) Top Line
Solid Gaming Portfolio Aids Activision's (ATVI) Prospects
Biogen's (BIIB) Upcoming Product Launches May Revive Growth
The Zacks analyst says that potential new launches, Leqembi in Alzheimer's, tofersen in ALS and zuranolone in depression, can help revive growth at Biogen, which is facing multiple challenges now.
Order Flow Aids General Dynamics (GD) Amid Supply Challenges
Per the Zacks Analyst, solid order flow for its products bolsters General Dynamics' revenue growth prospects. Yet COVID-19 led supply chain challenges may continue to hurt its growth.
Arista (ANET) Revenues Marred by Cautious Customer Spending
Per the Zacks analyst, Arista's top-line growth is likely to be weighed down by a moderation in consumer spending, mainly for cloud titan customers owing to a challenging macroeconomic environment.
Solid Top Line, Strong Cash Flows Aid American Financial (AFG)
Per the Zacks analyst, strong revenues driven by higher net investment income, net earned premiums have led to significant growth. Moreover, its healthy balance sheet should drive long-term growth.
Solid Growth of Digital Platform Aids Western Union (WU)
Per the Zacks Analyst, the company's digital platform has been expanding its customer base. Streamlining business operations will help focus on core competencies.
Strong Demand for Products Aids The Cooper Companies (COO)
Per the Zacks analyst, The Cooper Companies witnessed strong demand for its products across several segments during the first quarter. The trend is likely to continue boosting the company's prospect.
Verisk (VRSK) Gains From Opta Buyout, Operational Risks Stay
Per the Zacks analyst, the Opta acquisition is expected to expand Verisk's footprint in the Canadian market. Chances of security breach remains as a concern.
Flowserve (FLS) Rides on Strong MRO and Aftermarket Activity
The Zacks analyst is encouraged by Flowserve's record solid booking levels owing to strong growth in MRO and aftermarket businesses. The company's improved guidance for 2023 holds promise.
Strength in Metal Cutting Segment to Aid Kennametal (KMT)
Per the Zacks analyst, Kennametal will benefit from strength in its Metal Cutting segment, led by robust general engineering, transportation, aerospace and energy end markets.
MDC Banks on Build-To-Order Approach & Solid Land Buyouts
Per the Zacks analyst, Build-to-Order approach and land acquisition strategies aid MDC's growth. Also, strong liquidity adds to the tailwinds.
Medifast's (MED) Gross Margin Troubled by Escalated Inflation
Per the Zacks analyst, Medifast's gross margin is hurt by inflation. Its first-quarter gross profit margin contracted 180 basis points due to product cost inflation among other reasons.
Declining NII, High Costs Continue to Hurt UBS Group (UBS)
Per the Zacks analyst, UBS Group's net interest income continues to be under pressure due to an unfavorable deposit mix shift. Also, a flaring cost base may impede bottom-line growth.
Softness in the RU Segment Hurts American Public (APEI)
Per then Zacks analyst, low contributions and high expenses from RU segment hurts American Public's growth. Also, high costs from GSUSA's inclusion adds to the downtrend.
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