Top Analyst Reports for PayPal, Zoetis & CSX
Thursday, April 14, 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 PayPal Holdings, Inc. (PYPL), Zoetis Inc. (ZTS), and CSX Corporation (CSX). 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 >>>
PayPal shares have declined -61.8% over the past year against the Zacks Internet - Software industry’s decline of -47.3% as sentiment has soured on growth stocks whose full profitability is way out in the future in a rising interest rate environment. The Zacks analyst points out to intensifying competition in the digital payment market as a headwind for the company’s market position.
However, PayPal continues to benefit from robust growth in total payments volume owing to increasing net new active accounts. Further, strengthening customer engagement on the company’s platform is a major positive.
Venmo’s improving monetization efforts and rising adoption rate across various platforms are aiding the total active accounts growth. Additionally, solid momentum of core peer to peer and PayPal Checkout experiences is a tailwind.
(You can read the full research report on PayPal here >>>)
Shares of Zoetis have outperformed the Zacks Medical - Drugs industry over the past year (+14.2% vs. -22.4%). The Zacks analyst believes that an innovative portfolio of petcare parasiticides, including Simparica Trio and dermatology products (Apoquel and Cytopoint) will help the company’s continued momentum. The uptake of Librela and Solensia, its new monoclonal antibody (mAb) therapies for osteoarthritis (OA) pain in dogs and cats, is encouraging in Europe and should boost growth. Zoetis’ companion animal portfolio maintains momentum.
The launch of innovative products (ProHeart, Librela, Revolution Plus and many vaccines) bolstered the portfolio and should fuel growth in the upcoming quarters. However, the livestock portfolio has been affected by generic competition across cattle, poultry, swine, and dairy consumer markets in the United States. Pricing pressure will continue to hurt sales, which is a woe.
(You can read the full research report on Zoetis here >>>)
Shares of CSX have outperformed the Zacks Transportation - Rail industry over the past year (+7.7% vs. +4.9%). The Zacks analyst believes that due to healthy freight environment, CSX is benefiting from higher export coal volumes, international intermodal shipments, and pricing gains. The company’s Volumes rose 6% in 2021, leading to an 18% jump in revenues, efforts to reward shareholders are encouraging. In February, CSX hiked its dividend by 7.5%.
The company returned over $3.7 billion to shareholders via dividends and share buybacks. However, supply chain disruptions are hurting CSX’s operations. Weakness in the merchandise segment due to lower automotive volumes is concerning. High costs, primarily due to escalating fuel expenses, pose a threat to CSX’s bottom line. The company’s high capital expenditures are also worrisome.
(You can read the full research report on CSX here >>>)
Other noteworthy reports we are featuring today include PetroChina Company Limited (PTR), Northrop Grumman Corporation (NOC), and The Kraft Heinz Company (KHC).
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
PayPal (PYPL) Benefits From Increasing Total Payment Volume
Zoetis (ZTS) Rides on Portfolio of Petcare Products Amid Rivalry
CSX Impresses With Dividends & Share Buybacks Amid Cost Woes
Featured Reports
Applied Materials (AMAT) Rides on Foundry & Logic Spending
Per the Zacks analyst, solid customer spending in foundry and logic which is required in IoT, communications, 5G, automotive, power and sensor applications is benefiting Applied Materials.
Order Growth Aids Northrop Grumman (NOC), COVID Impacts Woe
Per the Zacks Analyst, solid order flow for its products bolsters Northrop Grumman revenue growth prospects. Yet, COVID induced supply chain shortages might hurt the stock's results.
Kraft Heinz (KHC) Benefits From Strategic Pricing Efforts
Per the Zacks analyst, Kraft Heinz has been benefiting from solid pricing action. In fourth-quarter 2021, the company's pricing rose 3.8% year over year with growth in all reporting segments.
D.R. Horton's (DHI) Backlog to Spur Growth Amid Rising Costs
D.R. Horton to gain from its robust backlog, industry-leading market share, acquisitions and focus on more entry-level affordable homes, per the Zacks analyst. Rising land/labor costs are concerns.
Solid Commercial Lines Aid Cincinnati Financial (CINF)
Per the Zacks analyst, Cincinnati Financial is poised to grow on the strength of Commercial Lines segment as well as price rise and a higher level of insured exposures.
Revenue-Enhancing Initiatives Support Comerica (CMA), Costs Up
Per the Zacks analyst, Comerica's revenues and efficiency initiatives are likely to boost its financials. However, lack of diversification in its loan portfolio and rising costs ail.
Pure Storage (PSTG) Benefits from Robust Product Portfolio
Per the Zacks analyst, Pure Storage's strong portfolio of solutions like Pure as-a-Service and Evergreen Storage is driving the performance. Supply chain woes and stiff competition remain concerns.
New Upgrades
PetroChina (PTR) to Benefit from Natural Gas Business
The Zacks analyst believes that PetroChina's natural gas business offers lucrative growth prospects in the coming years as China moves from coal to the cleaner fuel for environmental reasons.
Higher Nitrogen Demand and Prices Aid CF Industries (CF)
Per the Zacks analyst, CF Industries will gain from higher demand for nitrogen fertilizers in major markets. Higher nitrogen prices amid lower supply availability will also drive its margins.
Leer Mine, Long-term contracts Aid Arch Resources (ARCH)
Per the Zacks analyst Arch Resources will gain from its long-term contracts, while low-cost met coal production from Leer South longwall will ensure supply of high grade coking coal to global markets.
New Downgrades
CarMax (KMX) Hurt by High SG&A Costs & Debt Pile
Rising SG&A expenses amid digitization and store expansion efforts are likely to strain near-term cash flows and deteriorate CarMax's already weak balance sheet, per the Zacks analyst.
Limited Commercial Sales Expertise Ails Inari Medical (NARI)
The Zacks analyst is worried about Inari Medical's limited sales expertise as it has not been operational as a commercial company. Dependency on product adoption is an added issue.
USA Compression (USAC) Wrecked by Massive Debt Burden
The Zacks analyst believes that USA Compression Partners' high debt-to-capitalization of 77.3% is a concern, as it restricts the partnership's financial freedom to tap into growth opportunities.
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Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
CSX Corporation (CSX) : Free Stock Analysis Report
PetroChina Company Limited (PTR) : Free Stock Analysis Report
Applied Materials, Inc. (AMAT) : Free Stock Analysis Report
Zoetis Inc. (ZTS) : Free Stock Analysis Report
PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
The Kraft Heinz Company (KHC) : Free Stock Analysis Report
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