Top Analyst Reports for Mastercard, AbbVie & Salesforce
Tuesday, March 19, 2024
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 Mastercard Incorporated (MA), AbbVie Inc. (ABBV) and Salesforce, Inc. (CRM). 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 >>>
Mastercard shares have outperformed peer Visa (V) over the past year (+37.9% vs. +31.1%). The company’s numerous acquisitions are helping it to grow addressable markets and drive new revenue streams. The COVID-19 crisis accelerated the adoption of digital and contactless solutions, providing an opportunity for the firm's business to expedite its shift to the digital mode.
Mastercard is well-poised to gain from steady cash-generating abilities. A strong capital position allows it to pursue acquisitions and prudently deploy capital through share buybacks and dividend payments. Mastercard also increased its quarterly dividend to 66 cents per share.
However, steep operating expenses might stress its margins. High rebates and incentives may weigh on net revenues. As such, the stock warrants a cautious stance.
(You can read the full research report on Mastercard here >>>)
Shares of AbbVie have outperformed the Zacks Large Cap Pharmaceuticals industry over the past six months (+18.5% vs. +14.3%). The company has several new drugs in its portfolio with the potential to drive the top line and make up for lost Humira revenues.
Newer products, Skyrizi and Rinvoq, are performing extremely well, bolstered by approval in new indications, which should support top-line growth in the next few years. AbbVie has several early/mid-stage candidates that have the potential to drive long-term growth. Though revenues declined in 2023, AbbVie expects to return to robust sales growth in 2025. The ImmunoGen and Cerevel (proposed) acquisitions will strengthen its pipeline.
However, the company faces several near-term headwinds like Humira’s biosimilar erosion, increasing competitive pressure on Imbruvica and weakness in fillers.
(You can read the full research report on AbbVie here >>>)
Salesforce shares have outperformed the Zacks Computer - Software industry over the past year (+62.4% vs. +51.1%). The company is benefiting from a robust demand environment as customers are undergoing a major digital transformation. Its sustained focus on aligning products with customer needs is driving the top line.
Continued deal wins in the international market are another growth driver. The buyout of Slack has positioned the company as a leader in enterprise team collaboration and improved its competitive standing versus Microsoft Teams. Salesforce’s strategy of continuously expanding generative AI offerings will help it tap the growing opportunities in the space.
However, stiff competition and unfavorable currency fluctuations are concerns. Also, softening IT spending amid the ongoing macroeconomic uncertainties could hurt its growth prospects.
(You can read the full research report on Salesforce here >>>)
Other noteworthy reports we are featuring today include Bank of America Corporation (BAC), Thermo Fisher Scientific Inc. (TMO) and Mondelez International, Inc. (MDLZ).
Director of Research
Sheraz Mian
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
Strong Cross-Border Volumes Aid Mastercard (MA), High Costs Hurt
AbbVie's (ABBV) Skyrizi, Rinvoq Key to Top-Line Growth
Digital Transformation and Acquisitions Aid Salesforce (CRM)
Featured Reports
Higher Rates Aid Bank of America (BAC) Amid Fee Income Woes
Per the Zacks analyst, higher interest rates and loan growth will aid Bank of America's net interest yield. Its over dependence on the volatile nature of the capital markets for fee income is a woe.
Strategic Buyout Aids Thermo Fisher (TMO) Amid Forex Woes
The Zacks analyst is optimistic about Thermo Fisher's acquisition of binding site which enhances the company's specialty diagnostics offerings. Yet, foreign exchange woes remain a concern.
Mondelez (MDLZ) Gains on Solid Chocolate & Biscuit Categories
Per the Zacks analyst, Mondelez has been gaining on its focus on expanding the core chocolate & biscuit categories. Both these categories registered growth in sales during the fourth quarter of 2023.
EOG Resources (EOG) Banks on Oil-Rich Permian & Eagle Ford
With a strong footprint in oil shale plays like the Permian & Eagle Ford, EOG Resources' production outlook looks impressive. However, rising lease & well expenses concern the Zacks analyst.
Paychex (PAYX) Gains on Flexible Portfolio Despite Expenses
Per the Zacks analyst, Paychex's ability to meet clients' HR and payroll needs through a comprehensive and flexible service portfolio benefits its top line. Rising expenses are concerning.
Guidewire (GWRE) Benefits From Solid Momentum in Cloud Business
Per the Zacks Analyst, Guidewire's performance is gaining from solid momentum in cloud business. Also, solid revenue growth across subscription and support business segment is a tailwind.
KBR Banks on Solid Contract Wins Amid High Costs & Expenses
Per the Zacks analyst, KBR is benefiting from consistent contract wins across its GS and STS businesses, resulting in increased backlog and option levels. However, high costs and expenses ail.
New Upgrades
Construction Materials Segment & Buyouts Aid Carlisle (CSL)
Per the Zacks analyst, strong Construction Materials segment driven by strength in North American non-residential construction markets, and acquisitions like Petersen, will lend momentum to Carlisle.
Burlington Stores' (BURL) 2.0 & Store-Growth Plan Bode Well
Per the Zacks analyst, Burlington Stores' 2.0 initiative, which aims at improving the execution of the off-price model, looks encouraging. The company's long-term store-growth target is also on track.
Advanced Technology, Acquisitions Aid Consolidated Water (CWCO)
Per the Zacks analyst, Consolidated Water uses most advanced technology for desalination, allowing it to benefit by meeting increasing demand. Strategic acquisitions will boost its performance.
New Downgrades
Declining New Vehicle GPU & High Debt to Ail Sonic (SAH)
The Zacks analyst is worried about declining new vehicle gross profit per unit, which might limit Sonic's overall margins. High debt also raises concern.
Higher Spending Amid Stiff Competition Hurts Take Two (TTWO)
Per the Zacks analyst, intense competition from the likes of EA and Activision is compelling Take Two to spend more on game development and advertising thereby keeping margins under pressure.
Elevated Expenses, High Leverage Concern First American (FAF)
Per the Zacks analyst, First American's increase in higher personnel costs, operating expenses induces higher expenses that weigh on margin expansion. High leverage induces rise in interest expense.
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Bank of America Corporation (BAC) : Free Stock Analysis Report
Mastercard Incorporated (MA) : Free Stock Analysis Report
Salesforce Inc. (CRM) : Free Stock Analysis Report
Thermo Fisher Scientific Inc. (TMO) : Free Stock Analysis Report
Mondelez International, Inc. (MDLZ) : Free Stock Analysis Report
AbbVie Inc. (ABBV) : Free Stock Analysis Report
