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Top Analyst Reports for Lowe's, Southern Company & Freeport-McMoRan

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Thursday, January 13, 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 Lowe's Companies, Inc. (LOW), The Southern Company (SO) and Freeport-McMoRan Inc. (FCX). 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 >>>

Lowe's shares have gained +15.8% over the past three months, roughly in-line with the Zacks Building Products - Retail industry’s gain of +15.3%. The Zacks analyst believes that the company remains well positioned to capitalize on demand for the home improvement market backed by investments in technology, merchandise category and strength in Pro business.

Lowe’s has posted sturdy third-quarter fiscal 2021 results wherein the top and the bottom line beat the Zacks Consensus Estimate and grew year over year. Results benefited from the strong execution of strategies including the Total Home strategy. The Total Home strategy has been resonating well with Pro and DIY customers. Focus on driving productivity helped the company boost margins.

Also, sales at Lowes.com increased 25% in the fiscal third quarter. Management is committed toward enhancing the Pro offerings, expanding the company’s market share and boosting the operating margin.

(You can read the full research report on Lowe’s here >>>)

Shares of Southern Company have outperformed the Zacks Utility - Electric Power industry over the past year (+14.8% vs. +6.7%). The Zacks analyst believes that by leveraging the demographics of its operating territories, as in healthy population and job growth, Southern Company has gradually increased its customer base. With good rate base growth and constructive regulation, the power supplier is expected to generate steady earnings and dividend growth in the coming years.

However, its elevated leverage, along with continued timing and cost overrun issues over its Vogtle project, are major overhangs. While the electric utility holding company’s debt-to-capitalization of 60.9% restricts financial flexibility, its $25-billion Vogtle nuclear plant has already exceeded budget and is years behind schedule. Therefore, Southern Company warrants a cautious stance from the investors.

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

Freeport-McMoRan shares have gained +21.6% over the past three months against the Zacks Mining - Non Ferrous industry’s decline of -1.4%. The company is conducting exploration activities near existing mines to expand reserves. The Zacks analyst believes that the company is expected to gain from progress in exploration activities that will boost production capacity.

Freeport’s Lone Star project provides additional upside. The company is also well-positioned to benefit from automotive electrification, which is positive for copper as electrical vehicles are copper intensive. Higher copper prices are also expected to support its margins. The company's efforts to reduce debt is also encouraging.

However, the company faces headwind from higher energy and freight costs. Higher costs may hurt its margins. The recent weakness in copper demand in China amid slowing economic growth is another concern.

(You can read the full research report on Freeport-McMoRan here >>>)

Other noteworthy reports we are featuring today include Netflix, Inc. (NFLX), Cenovus Energy Inc (CVE) and Molina Healthcare, Inc. (MOH).

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

Lowe's (LOW) Omni-Channel Efforts & Pro Business Bode Well

Southern Company (SO) Buoyed by Regulated Customer Growth

Exploration Progress, Debt Reduction to Aid Freeport (FCX)

Featured Reports

Cenovus (CVE) to Gain From Alberta Tucker Asset Divestment
The Zacks analyst is upbeat about Cenovus' divestment of the Tucker thermal asset, which will improve its ability to raise shareholder returns.

Investments Aid Hawaiian Electric (HE), COVID Impacts Hit
Per the Zacks analyst, systematic investments in utility infrastructure development projects have been boosting Hawaiian Electric.

High Bandwidth Demand Aids Ciena (CIEN) Amid COVID-19 Woes
Per the Zacks analyst, increased network traffic, demand for bandwidth and adoption of cloud architectures bolster Ciena's momentum.

Revenue Growth, Decline in Costs Aid Molina Healthcare (MOH)
Per the Zacks analyst, Molina Healthcare's rising revenues can be attributed to strong premium revenues and solid membership growth. Efforts to control costs have been driving its margins.

Fee Income Growth Aids UMB Financial (UMBF) Amid High Costs
Per the Zacks analyst, UMB Financial's moves to diversify operations and enhance revenue-producing capabilities will drive the fee income.

Solid Housing Demand Aids PulteGroup (PHM) Amid Supply Woes
Per the Zacks analyst, solid demand trends, higher pricing and focus on entry-level buyers are benefiting PulteGroup. Yet, disruptions in the manufacture and supply of building products are concerns.

Robust Content Aids Netflix (NFLX) Amid Stiff Competition
Per the Zacks analyst, Netflix's robust content portfolio is driving subscriber addition that is helping it to win market share against the likes of Disney+, Apple TV+, HBO Max and Peacock.

New Upgrades

E-Commerce Growth & CAM Segment Aids Air Transport (ATSG)
Per the Zacks analyst, performance of the CAM segment is encouraging. Additionally, strong e-commerce demand is a positive for Air Transport (ATSG).

AMN Healthcare (AMN) Continues to Gain From Acquisitions
The Zacks analyst is upbeat about AMN Healthcare strengthening its inorganic suite via buyouts. An expanded portfolio serving a diverse and growing healthcare talent-related needs also buoy optimism.

Capri Holdings' (CPRI) Digital Endeavors to Aid Top Line
Per the Zacks analyst, deployment of resources to upgrade distribution infrastructure and e-commerce platform bode well for Capri Holdings. E-commerce sales rose double digits in the second quarter.

New Downgrades

Competition for Halozyme's (HALO) Partnered Drugs Rising
Per the Zacks analyst, Halozyme derives revenues from royalties on drugs sales developed using ENHANZE technology. Some drugs are facing rising biosimilar competition, which is hurting its topline.

Cost & Volume Woes Mar Canadian Pacific's (CP) Prospects
The Zacks analyst is worried about the escalated operating expenses, which are hurting the company's bottom line. Lower expectation for volume growth is also a downside.

Growing Competition & Rising Expenses Hurt Alibaba (BABA)
Per the Zacks analyst, Alibaba faces intense competition in the e-commerce market. Also, higher costs associated with new initiatives remain overhangs.

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
Southern Company The (SO) : Free Stock Analysis Report
Netflix, Inc. (NFLX) : Free Stock Analysis Report
FreeportMcMoRan Inc. (FCX) : Free Stock Analysis Report
Lowe's Companies, Inc. (LOW) : Free Stock Analysis Report
Molina Healthcare, Inc (MOH) : Free Stock Analysis Report
Cenovus Energy Inc (CVE) : Free Stock Analysis Report
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