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Top Research Reports for McDonald's, BlackRock & BP

Monday, November 28, 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 McDonald's Corp. (MCD), BlackRock, Inc. (BLK) and BP p.l.c. (BP). 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 >>>

McDonald's shares have outperformed the Zacks Retail - Restaurants industry over the past year (+9.8% vs. -3.3%). The company’s increased focus on menu innovation and loyalty program expansion is commendable. It is also undertaking every effort to drive growth in international markets.

Robust digitalization will help the company in driving long-term growth and capturing market share. It is planning to open more than 1,800 restaurants globally in 2022, which includes 500 openings in the United States and IOM segment and 1,300 (including nearly 800 in China) inaugurations in the IDL market.

However, restaurant closures in Russia and Ukraine, coupled with inflationary pressures on labor and commodities, remain headwinds. The company stated that recovery in China remains challenging due to ongoing COVID resurgences and related lockdowns.

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

Shares of BlackRock have underperformed the Zacks Financial - Investment Management industry over the past year (-20.5% vs. -18.6%). The company is facing elevated expenses (mainly owing to higher administration costs) which are expected to hurt the company’s bottom line. Also, the company’s high dependence on overseas revenues is worrisome. The rise in equity market volatility and a fall in asset prices make us apprehensive.

However, BlackRock has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters. Its third-quarter 2022 results were aided by lower costs.

BlackRock continues to restructure the equity business, which, along with strategic acquisitions, will keep supporting revenue growth, and help expand market share and footprints globally. Robust assets under management (AUM) balance will likely further support the top line.

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

BP’s shares have gained +34.7% over the past year against the Zacks Oil and Gas - Integrated - International industry’s gain of +54.4%. The company has a strong portfolio of upstream projects, backing impressive production growth. The company boasted that the target of adding a net production of 900 thousand barrels of oil equivalent per day by 2021 from key projects has been met successfully.

BP has set an aggressive energy transition plan to capitalize on the mounting demand for clean energy. Currently, high oil prices are aiding the company’s upstream operations. Notably, BP announced plans to execute a $3.5-billion share buyback, which is expected to be completed before reporting the third-quarter results.

However, the company’s balance sheet is considerably more levered than most peers, thereby limiting its financial flexibility. Also, increasing costs and expenses has been adversely affecting the energy giant’s income. As such, the stock warrants a cautious stance.

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

Other noteworthy reports we are featuring today include SAP SE (SAP), Petróleo Brasileiro S.A. - Petrobras (PBR), and Fiserv, Inc. (FISV).

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

Loyalty Program Aid McDonald's (MCD), China Comps Woes Stay

Buyouts, Active Equity Focus Aid BlackRock (BLK), Costs Ail

BP plc (BP) Banks on Upstream Production, Hurt by High Debts

Featured Reports

Solid Momentum in Cloud Business Driving SAP's Performance
Per the Zacks Analyst, SAP's performance is gaining from its strengthening cloud business, mainly Rise with SAP solution. However, weak uptake of software licenses and support offerings is a concern.

Pre-Salt Reserves Boosts Petrobras (PBR), Debt Pile Hurts
While Petrobras' stakes in Brazil's attractive pre-salt oil reservoirs should boost its earnings outlook, the Zacks analyst is concerned over the company's huge debt load of more than $47 billion.

Fiserv (FISV) to Benefit From Finxact Acquisition, Debt High
Per the Zacks Analyst, the Finxact acquisition should boost Fiserv's digital banking strategy and enhance digital banking experiences of its clients. A debt-heavy balance sheet remains a concern.

Global Payments (GPN) Ride High on Buyouts, Solid Cash Flow
Per the Zacks Analyst, buyouts and tie-ups added capabilities to the company's portfolio, which in turn, boosted revenues. Also, a strong cash flow drive investments in business.

Investments, Customer Growth Aid Essential Utilities (WTRG)
Per the Zacks analyst, Essential Utilities' (WTRG) $3 billion investment to fortify it water and natural gas infrastructure and demand from expanding customer base are going to boost its performance.

Acquisition, Strong Demand to Aid Sonoco (SON), Cost Ail
The Zacks analyst believes that Sonoco will gain on strong recovery in price and cost across most of its businesses, robust end-market demand, the acquisition of Metal Packaging despite cost headwinds

Mirati (MRTX) Gears Up for First Product Launch in the U.S.
The FDA's final decision on Mirati's KRAS inhibitor, adagrasib, is expected by 2022-end. If approved, the Zacks Analyst feels the target market faces stiff competition from Amgen's Lumakras.

New Upgrades

Electronic Focus & Low Costs Aid Interactive Brokers (IBKR)
Per the Zacks analyst, Interactive Brokers' continued focus on the Electronic Brokerage segment along with lower level of compensation costs and development of proprietary software will aid profits.

Zscaler (ZS) Benefits From Acquisitions & Product Refreshes
Per the Zacks analyst, Zscaler is benefiting from its strategic acquisitions like Smokescreen and Trustdome. Moreover, frequent product refreshes are helping it in gaining new customers.

Rise in Digital Subscribers to Lift NY Times' (NYT) Revenues
Per the Zacks analyst, The New York Times Company benefits from increase in digital subscribers. Management anticipates digital-only subscription revenues to rise 30-33% in fourth-quarter 2022.

New Downgrades

News Corporation (NWSA) Witnesses Multiple Challenges
Per Zacks analyst, News Corporation's performance has been hurt by a volatile macro environment, including currency headwinds. Also, certain challenges, particularly at HarperCollins, hurt the results

Regulatory Requirements, Stiff Competition Ail Avantor (AVTR)
The Zacks analyst is worried about Avantor's operation in markets where the company and its customers are party to various laws and regulations. Stiff competition in the niche space is an added issue.

Operating Cost Woes Dim C.H. Robinson's (CHRW) Prospects
The Zacks analyst is wary of the steep operating expenses. Cost concerns are limiting C.H. Robinson's bottom-line growth. CHRW's liquidity position is an added downside.

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

BP p.l.c. (BP) : Free Stock Analysis Report

Petroleo Brasileiro S.A. Petrobras (PBR) : Free Stock Analysis Report

BlackRock, Inc. (BLK) : Free Stock Analysis Report

McDonald's Corporation (MCD) : Free Stock Analysis Report

Fiserv, Inc. (FISV) : Free Stock Analysis Report

SAP SE (SAP) : Free Stock Analysis Report

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