Top Research Reports for ConocoPhillips, SAP & CSX

Wednesday, July 6, 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 ConocoPhillips (COP), SAP SE (SAP) and CSX Corp. (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 >>>

ConocoPhillips shares have gained +43.4% over the past year against the Zacks Oil and Gas - Integrated U.S. industry’s gain of +45.9%. The Zacks analyst believes that significant opportunities are there for the firm in the Bakken Shale, where it owns about 750 undrilled locations that could provide access to huge reserves.

Notably, the company has revised its expected 2022 return of capital to shareholders upward to $10 billion, reflecting an increase from the prior-mentioned $8 billion. Also, the company’s balance sheet is significantly less leveraged than the industry it belongs to.

However, ConocoPhillips is highly exposed to oil price fluctuations, which is make things challenging for the company. Also, it has been generating lower dividend yield than the composite stocks belonging to the energy sector over the past few years.

(You can read the full research report on ConocoPhillips here >>>)

SAP shares have declined -39.6% over the past year against the Zacks Computer - Software industry’s decline of -15.4%. The Zacks analyst believes that suspension of Russian operations amid the ongoing Ukraine war is expected to affect both the company’s revenues and non-IFRS operating profit in the near term.

Weak uptake of software licenses and support offerings remains a headwind. Stiff competition and increasing costs to enhance cloud-based offerings is likely to exert pressure on the company’s profitability as well.

However, SAP’s performance is gaining from strength in its cloud business, especially the new Rise with SAP solution. Momentum in SAP’s Business Process Intelligence platform, particularly the S/4HANA solutions along with steady traction witnessed in SuccessFactors Employee Central, Ariba and Fieldglass, Qualtrics and other cloud-based offerings is noteworthy.

(You can read the full research report on SAP here >>>)

Shares of CSX have declined -13.6% over the past year against the Zacks Transportation – Rail industry’s decline of -9.4%. The Zacks analyst believes that supply-chain disturbances are hurting the company’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. CSX’s high capital expenditures are also worrisome.

However, CSX is benefiting from higher export coal volumes, domestic intermodal shipments and favorable pricing. With the demand scenario expected to remain strong, despite the current market bloodbath, management anticipates double-digit growth in operating income and revenues for 2022 from the respective year-ago reported figures.

(You can read the full research report on CSX here >>>)

Other noteworthy reports we are featuring today include Alnylam Pharmaceuticals, Inc. (ALNY), DTE Energy Co. (DTE), and NVR, Inc. (NVR).

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

ConocoPhillips (COP) Banks On Oil-Rich Bakken Shale Assets

Solid Momentum in Cloud Business Driving SAP's Performance

Healthy Freight Demand Aids CSX Despite Supply-Chain Woes

Featured Reports

Alnylam's (ALNY) Marketed Drugs Aid Growth Amid Competition
Per the Zacks analyst, Alnylam's portfolio of approved drugs is witnessing strong uptake since launch, while the pipeline progresses well. However, stiff competition in the target market remains a woe

Solid Investments Aid DTE Energy (DTE), Weak Solvency Woes
Per the Zacks analyst, DTE Energy's investment in infrastructure and expansion projects tend to boost its long-term growth prospects. However, its weak solvency position remains a bottleneck.

Growth in Direct-To-Consumer Business Aids Skechers (SKX)
Per the Zacks analyst, Skechers' direct-to-consumer business gains from growth in international and domestic markets. During first-quarter 2022, direct-to-consumer sales increased 15.7%.

Expansion Strategies Aid Evercore (EVR), Rising Costs Ail
Per the Zacks analyst, Evercore's efforts to boost its client base in advisory solutions might support revenue growth. However, rising compensation costs will likely keep profits under pressure.

National Vision (EYE) New Store Growth Robust amid Cost Woes
Per the Zacks analyst, National Vision's notable store count growth for America's Best and Eyeglass World brands, should contribute to top line. Margin contractions on rising expenses is discouraging.

NVR Benefits From Disciplined Business Model, Inflation High
Per the Zacks analyst, NVR's disciplined business model, and focus on maximizing liquidity and minimizing risks bode well. Yet, supply chain issues and inflationary pressure are pressing concerns.

Acquisitions Benefit Toll Brothers (TOL), Higher Rates Ail
Per the Zacks analyst, lack of competition in the luxury new home market and buyout synergies have been driving Toll Brothers. However, higher mortgage rates are risks.

New Upgrades

Watts Water (WTS) To Benefit From Strong Product Portfolio
Per the Zacks analyst, Watts Water is gaining from diversified product portfolio, geographic expansion and efficient cost management. Strong balance sheet and synergies from buyouts are tailwinds.

Capacity Expansion, Cost Reduction to Aid Albemarle (ALB)
According to the Zacks analyst, Albemarle should gain from its actions to boost its global lithium derivative capacity. Its cost-saving actions will also support margins.

Kronos Worldwide (KRO) Gains on Higher TiO2 Demand, Prices
Per the Zacks analyst, higher titanium dioxide (TiO2) demand will drive the company's sales volumes. Higher average TiO2 selling prices will also support its margins.

New Downgrades

Rising Expenses, Growing Competition Ail MercadoLibre (MELI)
Per the Zacks analyst, MercadoLibre is hurt by rising expenses related to warehousing, free shipping subsidies and mPOS discounts. Also, intensifying e-commerce competition poses risk.

Declining Marketplace GMS & Mounting Costs Hurt Etsy (ETSY)
Per the Zacks analyst, a slowdown in consumer spending is hurting Etsy marketplace's gross merchandise sales. Also, rising costs due to the shift to Offsite Ads remain a concern for its profitability.

Escalating Costs & High Debts Hurt Community Health (CYH)
Per the Zacks analyst, the company's high costs can put margins under pressure. Rising debts remain a concern as it leads to escalated interest expenses.

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
 
Alnylam Pharmaceuticals, Inc. (ALNY) : Free Stock Analysis Report
 
ConocoPhillips (COP) : Free Stock Analysis Report
 
CSX Corporation (CSX) : Free Stock Analysis Report
 
DTE Energy Company (DTE) : Free Stock Analysis Report
 
SAP SE (SAP) : Free Stock Analysis Report
 
NVR, Inc. (NVR) : Free Stock Analysis Report
 
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