Top Research Reports for NIKE, Union Pacific & KLA
Friday, February 17, 2023
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 NIKE, Inc. (NKE), Union Pacific Corporation (UNP) and KLA Corporation (KLAC). 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 >>>
NIKE shares were in line with the Zacks Shoes and Retail Apparel industry over the past six months (+7.2% vs. +7.1%). The company reported solid second-quarter fiscal 2023 results and provided an upbeat sales view. It reported the 10th and the fifth straight quarters of earnings and revenue beat, respectively. Results gained from brand strength, robust consumer demand and an innovative product pipeline.
Its Consumer Direct Acceleration strategy, along with robust performance in its digital and DTC businesses bode well. Our Model estimates 5.5% revenue growth in fiscal 2023, with 13.2% growth on a currency neutral basis.
NIKE witnessed decline in gross margin due to higher markdowns to liquidate inventory, increased freight and logistics costs, elevated input costs and currency headwinds. The Zacks analyst expect soft gross margin and currency headwinds to continue hurting NIKE results in the quarters ahead.
(You can read the full research report on NIKE here >>>)
Shares of Union Pacific have underperformed the Zacks Transportation - Rail industry over the past year (-20.2% vs. -11.2%). The company is facing escalation in fuel costs as oil prices move north which is worrisome. This phenomenon induced a 20% rise in operating expenses in 2022. Fuel costs surged 68% last year. The same is likely to be high in the March quarter as well.
However, Union Pacific's efforts to reward its shareholders even in the current uncertain scenario please us. The company hiked dividend twice in 2021. In May 2022, UNP further upped its quarterly dividend by 10%. The railroad operator is also active on the buyback front. In 2022, UNP bought back shares worth $6,282 million.
The railroad operator paid dividends worth $3,159 million in 2022. UNP's strong free cash flow generating ability supports its shareholder-friendly activities. The uptick in overall volumes (up 2% year over year in 2002) as labor woes ease is an added positive.
(You can read the full research report on Union Pacific here >>>)
KLA shares have outperformed the Zacks Electronics - Miscellaneous Products industry over the past year (+9.6% vs. -18.4%). The company is benefiting from solid momentum across the Semiconductor Process Control and Specialty Semiconductor Process segments. Further, strong performance of the wafer inspection business owing to rising demand for advanced wafer inspection applications in leading-edge technology development remains a tailwind.
The Zacks analyst expects wafer inspection revenues to see a year-over-year rise of 3.9% in fiscal 2023. Additionally, growing investments across multiple nodes, and rising capital intensity in Foundry & Logic are driving the top-line growth. Considering these factors, our estimates suggest that total revenues are likely to rise 10.4% in fiscal 2023 from fiscal 2022.
However, weakness in the PCB, Display and Component Inspection remains a headwind. Also, the new U.S. export regulations, supply-chain disruptions and mounting expenses remain overhangs.
(You can read the full research report on KLA here >>>)
Other noteworthy reports we are featuring today include Airbnb, Inc. (ABNB), Atlassian Corporation (TEAM) and Republic Services, Inc. (RSG).
Director of Research
Sheraz Mian
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
Improved Traffic & Digital Trends Aid NIKE (NKE) Direct
Dividends & Buybacks Aid Union Pacific (UNP), Cost Woes Stay
KLA (KLAC) Benefits From Solid Foundry/Logic Market Momentum
Featured Reports
Atlassian (TEAM) Gains On Rising Hybrid Working Tool Demand
Per the Zacks analyst, Atlassian is benefiting from the rising demand for remote working tools amid the hybrid work trend and accelerated digital transformation.
Dividends Aid Republic Services (RSG) Amid Seasonality Woes
The Zacks analyst is positive about Republic Services' consistent record of returning value to its shareholders. However, seasonality is a headwind.
Improving Premiums Aid Arch Capital (ACGL), Cat loss Ail
Per the Zacks analyst, Arch Capital is set to grow on solid Insurance and Reinsurance business driving improvement in premiums. However, exposure to cat loss inducing underwriting volatility ails.
Ventas (VTR) to Ride on SHOP Recovery, Life Science Assets
Per the Zacks Analyst, Ventas to benefit from the recovery in its senior housing operating portfolio (SHOP) and life science real estate investments. However, rising interest rates are a key woe.
Solid Investment boost OGE Energy (OGE), Weak Solvency Woe
Per the Zacks analyst, OGE Energy's aggressive investment strategy to upgrade its infrastructure tend to boost its long-term growth. Yet, its weak solvency position remains a concern.
Ciena (CIEN) Benefits from Product Portfolio & Acquisitions
Per the Zacks analyst, Ciena's performance is gaining from increased demand for its diversified product portfolio and strong secular demand trends. Synergies from recent acquisitions also bode well.
Antero Midstream (AM) Banks on $1B Midstream Project Backlog
Per the Zacks Analyst, Antero Midstrea's organic project backlog of $0.9-$1 billion makes it well-positioned to deliver peer-leading free cash flow. However, its massive debt level is concerning.
New Upgrades
Airbnb (ABNB) Banks on Strong Nights & Experiences Bookings
Per the Zacks analyst, strengthening gross nights booked in high-density urban areas, and recovery in both long-distance and cross-border travel are benefiting Airbnb's Nights & Experience bookings.
Albertsons' (ACI) Strong Digital Endeavors to Boost Sales
Per the Zacks analyst, Albertsons Companies has been directing resources toward expanding digital and omni-channel capabilities. The company's third-quarter digital sales rose 33% year on year.
Strength in Allegion Americas Segment Aids Allegion (ALLE)
Per the Zacks analyst, solid traction of Allegion's Allegion Americas segment, driven by strength in the non-residential and electronics end markets, will drive the company's growth.
New Downgrades
Halozyme's (HALO) Dependence on Partners for Revenue A Concern
Per the Zacks Analyst, Halozyme's overdependence on partners, like Roche does not bode well for the company's revenue prospects given the poor performance of its own marketed drug. The lack of other p
Weak Volume Across Segments, High Costs Ail Sealed Air (SEE)
The Zacks analyst is concerned that decline in volumes owing to weak end-market demand will hurt Sealed Air's top-line performance. High raw material costs continue to hurt margins.
Pressure on NIM, Higher Costs to Hurt First Republic (FRC)
Per the Zacks analyst, rise in funding costs and unfavorable deposit mix will likely put First Republic's NIM under pressure. Mounting expenses and unsustainable capital deployments are other woes.
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NIKE, Inc. (NKE) : Free Stock Analysis Report
Union Pacific Corporation (UNP) : Free Stock Analysis Report
KLA Corporation (KLAC) : Free Stock Analysis Report
Republic Services, Inc. (RSG) : Free Stock Analysis Report
Atlassian Corporation PLC (TEAM) : Free Stock Analysis Report
Airbnb, Inc. (ABNB) : Free Stock Analysis Report
