Wednesday, October 21, 2020
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 Alibaba Group (BABA), Berkshire Hathaway (BRK.B) and Coca-Cola Company (KO). 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 >>>
Alibaba shares have underperformed the Zacks Internet Commerce industry in the year-to-date period (+46% vs. +63.2%) on the back of continued momentum in the company's growth profile in its home market that appears to have weathered the pandemic a lot better than many other parts of the world.
Further, Alibaba’s strengthening cloud business with its expanding customer base continues to drive its performance. Its New Retail strategy is also gaining momentum. This is aiding growth in Tmall Import, Hema fresh food grocery business and Intime Department Stores.
However, higher costs associated with new initiatives remain a major concern. Also, COVID-19 related economic uncertainties and macro headwinds in China are major concerns. In addition, rising competition from e-commerce players poses a risk.
(You can read the full research report on Alibaba here >>>)
Shares of Berkshire Hathaway have lost -0.3% over the past year against the Zacks Insurance - Property and Casualty industry’s fall of -4.7%. The Zacks analyst believes that Berkshire Hathaway is expected to benefit from its growing Insurance business as well as Manufacturing, Service and Retailing, and Finance and Financial Products segments and strategic acquisitions.
Berkshire's inorganic growth story remains impressive with strategic acquisitions. A strong cash position supports earnings-accretive bolt-on buyouts and indicates its financial flexibility. The non-insurance businesses are delivering improved results with increased revenues over the past few years.
A sturdy capital level provides further impetus. However, exposure to catastrophe loss induces earnings volatility and also affects the property and casualty underwriting results of the company. Also, huge capital expenditure remains a headwind.
(You can read the full research report on Berkshire Hathaway here >>>)
Coca-Cola shares have gained +9.5% over the past six months against the Zacks Soft Drinks Beverages industry’s rise of +8.3%. The Zacks analyst believes that Coca-Cola’s move to accelerate digital expansion would provide an avenue for sustainable long-term growth.
It is poised to gain from the streamlining of portfolio by exiting of Zombie brands that will help divert resources toward brands with more growth potential. It is also accelerating investments to expand presence in digital channel driven by shift in consumer preference amid coronavirus.
The company’s top line missed estimate on declines in away-from-home channels, which account for nearly half of its revenues. It also lost global value share in NARTD beverages driven by negative channel mix owing to softness in the away-from-home channel.
(You can read the full research report on Coca-Cola here >>>)
Other noteworthy reports we are featuring today include Medtronic (MDT), International Business Machines (IBM) and Fiserv (FISV).
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
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
Alibaba (BABA) Rides On New Investments & Cloud Growth
Solid Insurance Business Aids Berkshire (BRK.B), Cat Loss Ail
Coca-Cola (KO) Boosts Digital Investments Amid Pandemic
Robust Ventilator Production Aids Medtronic (MDT) in Pandemic
The Zacks analyst is upbeat about Medtronic's ramped up ventilator production to meet the worldwide COVID-19-related patient needs.
Strong Uptick in Cloud Solutions Aids IBM Amid High Debt
Per the Zacks analyst, IBM's hybrid cloud solutions, are witnessing robust adoption, driven by synergies from the Red Hat acquisition.
Fiserv (FISV) Rides on Buyouts, Product Suite Amid Debt Woes
The Zacks analyst likes Fiserv's acquisition strategy to widen its client base and enhance its product portfolio. High debt may limit the company's future expansion.
Cost Control Actions, High Iron Prices to Drive Vale (VALE)
Per the Zacks analyst, high iron ore prices, lower debt levels, and its incessant focus on improving quality, productivity, and lowering costs will drive growth for Vale.
Strategic Buyouts Aid Public Storage (PSA), Rent Woes Ail
Per the Zacks analyst, buyouts and development efforts allow Public Storage to capitalize on growth opportunities.
Solid Balance Sheet Supports BNY Mellon (BK) Amid Low Rates
Per the Zacks analyst, a solid balance sheet and efforts to improve efficiency through cost control will aid BNY Mellon.
BioMarin (BMRN) Key Drugs Push Sales, Valrox Delay Concerns
Strong demand is driving sales of BioMarin's key drugs, Vimizim and Kuvan. However, the Zacks analyst considers the potential delay in the approval of Valrox to be a big blow.
Wireless & Cable Growth Aids Rogers Communications (RCI)
Per the Zacks analyst, steady postpaid subscriber gain in the wireless segment and increasing Internet user count is benefiting Rogers Communications.
Urban Outfitters' (URBN) Strong Digital Channel to Aid Sales
Per the Zacks analyst, Urban Outfitters' digital channel has been growing on the back of improved conversions.
Sunoco (SUN) to Grow on Vast Fuel Distribution Operations
Per the Zacks analyst, Sunoco is expected to generate stable cash flows from its motor fuel distribution business in the U.S. wholesale market. Moreover, its cost-containing measures are commendable.
Weak Revenues, Low Profitability Hurt Western Union (WU)
Per the Zacks analyst, revenues are suffering due to COVID-19 led decline in remittances and growing competition. High compliance and other costs weigh on margins thus hurting profitability.
Lower Visitation in Macau Hurts Wynn Resorts' (WYNN) Prospects
Per the Zacks analyst, Wynn Resorts has been witnessing lower visitation in Macau casinos owing to the coronavirus pandemic.
Virtu Financial (VIRT) Continues to Grapple With High Costs
Per the Zacks analyst, the company's elevated expenses have been putting pressure on margins. Also, a decline in market volatility offers it with lesser trading and profit opportunities.
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Medtronic PLC (MDT) : Free Stock Analysis Report
CocaCola Company The (KO) : Free Stock Analysis Report
International Business Machines Corporation (IBM) : Free Stock Analysis Report
Fiserv, Inc. (FISV) : Free Stock Analysis Report
Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
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