Thursday, September 28, 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 Oracle Corporation (ORCL), AbbVie Inc. (ABBV) and Lowe's Companies, Inc. (LOW). 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 >>>
Oracle shares have outperformed the Zacks Computer - Software industry over the past year (+71.6% vs. +38.3%) on the back of steady adoption of Gen 2 Cloud, Fusion and Autonomous Database despite slow cloud revenue growth.
Oracle’s Gen 2 Cloud is driving artificial intelligence (AI) clientele driven by better performance at a lower cost due to high bandwidth and low-latency RDMA networks. Partnerships with VMware and Microsoft to win new clientele. The company announced an extension of its collaboration with VMware to assist customers in modernizing the workloads by utilizing OCI.
ORCL is launching a generative AI cloud service for enterprise customers. Its share buybacks and dividend policy are noteworthy. However, stiff competition in the cloud market is slowing down the growth of Oracle’s expansion efforts in the competitive market.
(You can read the full research report on Oracle here >>>)
Shares of AbbVie have gained +11.6% over the past year against the Zacks Large Cap Pharmaceuticals industry’s gain of +26.5%. 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. The company has several early/mid-stage candidates that have blockbuster potential. AbbVie expects several regulatory submissions and key data readouts in 2023.
However, the company faces several near-term headwinds like Humira’s loss of exclusivity, increasing competitive pressure on Imbruvica and economic pressure on Juvederm sales. Though revenues are expected to decline in 2023, AbbVie expects to return to robust sales growth in 2025.
(You can read the full research report on AbbVie here >>>)
Lowe's shares have outperformed the Zacks Building Products - Retail industry over the year-to-date period (+5.4% vs. +3.4%). The company remains well-positioned to capitalize on the demand for the home improvement market, backed by investments in technology and strength in the Pro business. Lowe's posted better-than-expected results during second-quarter fiscal 2023, wherein the top and bottom lines beat the Zacks Consensus Estimate.
Results benefited from strong margins stemming from gains from the Total Home strategy, a sturdy spring recovery and the execution of the Perpetual Productivity Improvement initiative. However, management expects revenues to be $87-$89 billion versus $97.1 billion delivered last fiscal.
(You can read the full research report on Lowe’s here >>>)
Other noteworthy reports we are featuring today include Roper Technologies, Inc. (ROP), Ecolab Inc. (ECL) and Motorola Solutions, Inc. (MSI).
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
Oracle (ORCL) Gains from Cloud Suite Adoption & Partnerships
AbbVie's (ABBV) Skyrizi, Rinvoq Key to Top-Line Growth
Lowe's (LOW) Gains From Pro Business, Lower DIY Demand Ails
Application Software unit Aids Roper (ROP) Amid Forex Woes
Per the Zacks analyst, Roper's Application Software segment is driven by solid momentum across the Deltek, Vertafore and Aderant businesses. However, forex woes remain concerning for the company.
Focus on R&D Aids Ecolab (ECL) Amid Data Security Threats
The Zacks analyst is upbeat about Ecolab's focus on research and development despite its information technology systems being potentially vulnerable to data security threats.
Motorola (MSI) Raises Guidance on Healthy Demand Trends
Per the Zacks analyst, Motorola is well poised to benefit from healthy demand trends in video security, command center software and land mobile radio services, enabling it to raise guidance for 2023.
Trane Technologies (TT) Gains From Effectiveness of Products
Per the Zacks analyst, Trane Technologies' investment in R&D to improve products, introduce new offerings, and advance technology for product excellence benefit both top and bottom line the company.
Solid Retirement Unit Aids Prudential (PRU), Expenses Hurt
Per the Zacks Analyst, Prudential's solid retirement business has generated substantial premiums, which in turn drove the top line. However, elevated expenses remain a major concern.
ADAS Technologies Aid Mobileye (MBLY), High Expenses Ail
Per the Zacks analyst, Mobileye's design wins for its ADAS technologies are likely to lift the company's sales. However, escalating operating expenses might clip margins.
Improved Travel Demand To Aid Hyatt (H), Macro Woes Ail
Per the Zacks analyst, Hyatt is likely to benefit from solid leisure demand, favorable pricing scenario and Apple Leisure Group integration. However, a volatile macroeconomic environment is a concern.
Growing Revenues, Acquisitions Aid Acadia Healthcare (ACHC)
Per the Zacks analyst, the company's rising topline, driven by rising patient volumes and operational efficiencies, will pave the way for growth. Acquisitions enable it to expand its capabilities.
SM Energy (SM) Banks on Oil-Rich Midland Basin Acreages
The Zacks analyst is upbeat about SM Energy's 111,000 net acres in the Midland basin, signaling a positive outlook for sustained oil production growth with favorable operating margin.
Sturdy Comps Run to Fuel Grocery Outlet's (GO) Top Line
Per the Zacks analyst, Grocery Outlet's opportunistic purchasing, marketing efforts and new product offerings facilitate comparable-store sales growth. Second-quarter comparable-store sales rose 9.2%.
Challenges in Crop Science Business Impact Bayer (BAYRY)
Per the Zacks analyst, lower volumes and decreased prices for glyphosate-based products in the Crop Science division continues to pull down growth. High levels of debt are a concern for Bayer.
Supply-chain & High Inflation Issues Hit SunPower
Per the Zacks Analyst, SunPpwer might be impacted by supply-chain constraints and inflationary pressure that tends to increase the cost of its components.
Poor Asset Quality, High Costs Hurt Hilltop Holdings (HTH)
Per the Zacks analyst, elevated expenses and weakening asset quality are expected to hurt Hilltop Holdings' bottom line. Higher mortgage rates will hamper origination volumes and fee income growth.
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