Top Analyst Reports for Toyota Motor, Elevance Health & Illinois Tool Works
Monday, October 23, 2023
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including Toyota Motor Corp. (TM), Elevance Health, Inc. (ELV) and Illinois Tool Works Inc. (ITW). 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 >>>
Shares of Toyota Motor have outperformed the Zacks Automotive - Foreign industry over the year-to-date period (+29.0% vs. +21.9%). The Japanese carmaker is one of the world’s leading automakers, with an array of brands, including Toyota, Lexus and Scion, which position it for solid growth.
Continued demand for vehicles and a robust lineup of trucks and sport utility vehicles (SUVs) are set to fuel the sales volumes of Toyota. To capitalize on the accelerated global shift to environmentally friendly vehicles, the auto giant is deepening its focus on manufacturing electric and fuel-cell vehicles, which will bolster the company’s product competitiveness.
The Japanese auto giant aims to generate 40% of its global sales from EVs by 2025 and 70% by 2030. The company plans to invest 4 trillion yen ($35 billion) for a lineup of 30 BEVs by 2030. It aims to expand global sales of BEVs to 3.5 million units a year by 2030. Thus, we are bullish on the stock.
(You can read the full research report on Toyota Motor here >>>)
Elevance Health’s shares have declined -1.3% over the past six months against the Zacks Medical Services industry’s decline of -8.9%. The company's rising expenses continue to put pressure on margins. In the first nine months of 2023, it surged by 10.8% YoY. It expects cash flow to decline this year. Its balance sheet with a rising debt level can affect financial flexibility. As such, the stock warrants a cautious stance.
Nevertheless, improving top line can be attributed to premium rate increases and higher memberships. ELV beat Q3 earnings with support from its BioPlus buyout. Acquisitions and collaborations have enabled the firm to strengthen its business portfolio.
Its well-performing Medicare Advantage business, coupled with several contract wins, is expected to drive its membership going ahead. Its growing Carelon business is a major positive. It utilizes excess capital to boost shareholder value.
(You can read the full research report on Elevance Health here >>>)
Shares of Illinois Tool Works have outperformed the Zacks Manufacturing - General Industrial industry over the past year (+13.9% vs. +11.4%). The company is benefiting from strength across the capital equipment and industrial businesses. Continued strength in institutional end markets and consumables business bodes well for the company.
Anticipating stable underlying demand, the company raised its adjusted earnings guidance for 2023. Illinois Tool’s efforts to add shareholder value are encouraging. In August, the company hiked its dividend by 7% and approved a $5 billion share buyback program.
However, persistent weakness in the Construction Products unit due to softness in U.S. residential construction is concerning. Weakness in semiconductor-related business within Test & Measurement and Electronics unit is an added woe. Adverse foreign currency movements are denting ITW’s top line.
(You can read the full research report on Illinois Tool Works here >>>)
Other noteworthy reports we are featuring today include Cadence Design Systems, Inc. (CDNS), Ross Stores, Inc. (ROST) and Yum China Holdings, Inc. (YUMC).
Mark Vickery
Senior Editor
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
Robust Line-up and Electrification Push to Aid Toyota (TM)
Elevance's (ELV) Strategic Buyouts & Product Expansion Aid
Dividends, Buybacks Aid Illinois Tool (ITW), Low Demand Ails
Featured Reports
Solid Demand & Comps Drives Ross Stores' (ROST) Top Line
Per the Zacks analyst, Ross Stores has been gaining from strength in cosmetics and accessories as well as growth across regions and solid comparable store sales. This led to Q2 sales growth of 7.7%.
Yum China (YUMC) Banks on Digital Initiatives, High Costs Ail
Per the Zacks analyst, Yum China's focus on digital enhancements, logistics center openings and supply-chain security bode well. However, wage inflation is a concern.
Solid Expansion Projects to Aid Teck (TECK) Amid High Costs
Per the Zacks analyst, Teck Resources is poised well to gain its ongoing expansion projects project pipeline and innovation-driven efficiency program RACE21 despite cost pressures.
Wheaton Precious (WPM) Bets on Gold Amid Low Silver Volume
Per the Zacks Analyst, the company will benefit from higher attributable gold production and prices. Low silver volumes due to termination of its stream agreements will somewhat negate these gains.
Domino's (DPZ) Banks on Strategic Efforts Amid High Costs
Per the Zacks analyst, solid global expansion, sales-boosting initiatives, menu innovation and digital advancements are benefiting Domino's. However, high costs and low order volumes ail.
New Upgrades
Cadence (CDNS) to Benefit From Strong Portfolio & Buyouts
Per the Zacks analyst, Cadence's performance is being driven by demand for the company's diversified product portfolio. New products and synergies from buyouts are expected to sustain growth momentum.
Cirrus Logic (CRUS) Benefits From Strong Product Portfolio
Per the Zacks analyst, Cirrus Logic's performance benefitted from solid demand for its camera controller. Also, continued investment across next generation technology like AR/VR are tailwinds.
New Downgrades
Labor Costs, Poor Financials Hurt Spirit AeroSystems (SPR)
Per the Zacks analyst, labor and supply-chain cost growth on the B787 program as well as forward loss related to these might hurt Spirit AeroSystems. It also boasts a weak financial position
Helen of Troy (HELE) Troubled by Beauty & Wellness Segment
Per the Zacks analyst, Helen of Troy has been seeing softness in its Beauty & Wellness unit, wherein sales fell 10.4% in second quarter. Management expects segment sales to drop 5.8-8% in fiscal 2024.
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Illinois Tool Works Inc. (ITW) : Free Stock Analysis Report
Toyota Motor Corporation (TM) : Free Stock Analysis Report
Ross Stores, Inc. (ROST) : Free Stock Analysis Report
Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report
Yum China (YUMC) : Free Stock Analysis Report
Elevance Health, Inc. (ELV) : Free Stock Analysis Report
