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Top Research Reports for Lowe's, The Estee Lauder & Applied Materials

·6 min read

Thursday, September 15, 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 Lowe's Companies, Inc. (LOW), The Estée Lauder Companies Inc. (EL) and Applied Materials, Inc. (AMAT). 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 >>>

Lowe's shares have lagged the market this year (down -25.7% vs. down -18% for the S&P 500 index), reflecting the impact of the ongoing Fed tightening on the housing space. The near-term interest rate headwinds notwithstanding, the company remains well positioned to capitalize on the long-term favorable demand outlook for the home improvement market, backed by investments in technology, merchandise category and strength in Pro business.

Lowe’s posted sturdy earnings results for second-quarter fiscal 2021 wherein the bottom line beat the Zacks Consensus Estimate and grew year over year. Earnings performance benefited from strong operating margin, stemming from gains from the Total Home strategy and the execution of the Perpetual Productivity Improvement initiative. Focus on driving productivity boosted margins.

The Total Home strategy is resonating well with Pro and DIY customers for a while. Management is committed to enhancing the Pro offerings, expanding the company’s market share and driving its operating margin.

(You can read the full research report on Lowe’s here >>>)

The Estée Lauder’s shares have declined -23.1% over the past year against the Zacks Cosmetics industry’s decline of -42.7%. The company continues to battle record inflation, supply chain disruptions, unfavorable currency translations and the risk of a slowdown in several markets worldwide. The company’s fourth-quarter fiscal 2022 top and bottom line declined year over year.

Management expects fiscal first-quarter sales to be adversely impacted by continued COVID restrictions across China and Hainan. However, The Estee Lauder has been benefiting from its strong online business. The online channel grew mid-single-digits organically, fueled by double-digit growth across Asia-Pacific during fiscal 2022.

Its strong presence across emerging markets has been a key driver. The company boasts an impressive Skin Care portfolio which has been aiding growth.

(You can read the full research report on The Estee Lauder here >>>)

Applied Materials’ shares have modestly done better than the Zacks Semiconductor Equipment (-36.7% vs. -40.1%), but are otherwise victims of the shift in investor sentiment in response to Fed-driven tightening financial conditions.

Within the broader Tech space with its secular growth attributes, chip operators like Applied Materials represent the more cyclical part of the sector. As such, these stocks are under a cloud as the macroeconomic outlook has darkened. 

That said, solid demand for silicon in several applications across various markets remains a tailwind. Growing usage of OLED technology in smartphones, televisions and computers, remained positive.

Increased customer spending in foundry and logic on the back of rising need for specialty nodes in automotive, power, 5G rollout, IoT, communications and image sensor markets, is a major positive. Also, strong momentum in conductor etches is benefiting the company’s position in DRAM and NAND.

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

Other noteworthy reports we are featuring today include General Dynamics Corporation (GD), TC Energy Corporation (TRP), and Delta Air Lines, Inc. (DAL).

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

Lowe's (LOW) Digital & Pro Businesses Appear Encouraging

The Estee Lauder Companies (EL) Gains on Online Business

Applied Materials (AMAT) Rides on Foundry & Logic Spending

Featured Reports

Order Flow Aids General Dynamics (GD) Amid Supply Challenges
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TC Energy's (TRP) C$28B Growth Projects to Boost Earnings
The Zacks analyst believes that TC Energy's C$28 billion of growth projects should support its earnings and dividend payouts but is worried over the massive debt of C$37 billion.

Upbeat Air-Travel Demand Aids Delta (DAL), High Costs Ail
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Repligen's Products Fuel Growth Amid Competition
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Dolby Laboratories (DLB) To Gain From Strong Product Portfolio
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Communications Business Aids MasTec (MTZ), Inflation Hurts
Per the Zacks analyst, MasTec's presence in the telecommunications market, exposure in the clean energy market and expansion into heavy infrastructure bode well. Inflationary pressures are risks.

Cost Control Aids Lazard (LAZ) Despite Rising Net Outflows
Per the Zacks analyst, Lazard's cost-control efforts might drive operational efficiency. Yet, rising net outflows and high dependence on financial advisory revenues are concerning.

New Upgrades

Solid Insurance in Force, Persistency Drive Radian (RDN)
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Ingevity (NGVT) Gains on Strong Demand, Capacity Expansion
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Permian Expansion, Acquisitions Aid U.S. Silica (SLCA)
Per the Zacks analyst, the company will gain from its actions to expand in the fast-growing Permian Basin. Sandbox and EP Minerals buyouts also provide a strong platform for growth and expansion.

New Downgrades

Labor Shortage and Afghanistan Exit Issues Hit AAR (AIR)
Per the Zacks analyst, labor shortages in its MRO business and exit of the U.S. Army from Afghanistan and resultant winding down of AAR Corp.'s activity in Afghanistan might hurt the stock's results.

Huge Debt Load, Rising Costs Hurt Crestwood's (CEQP) Margins
The Zacks analyst is worried about Crestwood's increasing debt load, which could lead to volatile earnings. The partnership's rising operation and maintenance costs remain concerning.

Supply Delay Ails Tandem Diabetes' (TNDM) Global Pump Sales
The Zacks Analyst is worried about the ongoing disruption of ordering and supply chain timing in Tandem Diabetes' global pump shipment. Rising expenses due to inflationary pressure is an added woe.

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
General Dynamics Corporation (GD) : Free Stock Analysis Report
Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
Lowe's Companies, Inc. (LOW) : Free Stock Analysis Report
The Estee Lauder Companies Inc. (EL) : Free Stock Analysis Report
Applied Materials, Inc. (AMAT) : Free Stock Analysis Report
TC Energy Corporation (TRP) : Free Stock Analysis Report
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