Tuesday, September 19, 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 Alibaba Group Holding Limited (BABA), TotalEnergies SE (TTE) and ConocoPhillips (COP). 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 gained +1.4% over the past year against the Zacks Internet - Commerce industry’s gain of +13.2%, reflecting the uncertain macroeconomic outlook for its home market. The company’s solid momentum across the China and international commerce retail businesses is driving its top-line growth. Notably, China commerce retail business is driven by rising online physical goods GMV at Taobao and Tmall.
Further, International retail business is riding on solid combined order growth. Moreover, strength across the Cainiao logistics services, owing to robust domestic consumer logistics and international fulfillment solution services is a plus.
This apart, strength across cloud computing business and local services is a tailwind. However, macroeconomic uncertainties are concerns. Additionally, normalization of cloud demand as offline activities are resuming, is an overhang.
(You can read the full research report on Alibaba here >>>)
Shares of TotalEnergies have outperformed the Zacks Oil and Gas - Refining and Marketing industry over the past year (+43.7% vs. +32.1%). The company continues to benefit from startups, well-spread LNG assets and an expanding upstream portfolio that has exposure to rapidly growing hydrocarbon-producing regions. Lower exposure to mature assets acts as a tailwind.
The company streamlines its portfolio through acquisitions and divestitures. TotalEnergies is steadily investing to expand its renewable operation and aims to achieve net-zero emissions by 2050.
However, the company’s production has been impacted by security-related production cuts in some regions. TotalEnergies remains exposed to acquisition-related risks as these assets contribute a sizable volume to production. A natural decline in production and its withdrawal from Russia might affect profitability.
(You can read the full research report on TotalEnergies here >>>)
ConocoPhillips’ shares have outperformed the Zacks Oil and Gas - Integrated - United States industry over the past year (+16.7% vs. +14.6%). The company has secured a solid production outlook, thanks to its decades of drilling inventories across its low-cost and diversified upstream asset base. The resource base represents the company’s strong footprint in prolific acres in the United States, comprising Eagle Ford shale, Permian Basin and Bakken shale.
Also, the company is better positioned to rely on its strong balance sheet to withstand any adverse business scenario. However, due to the inflationary market, the company’s overall operating and production expenses continue to increase, hurting the bottom line.
ConocoPhillips’ exploration and production activities are exposed to extreme volatility in oil and gas prices, making the overall business scenario of the upstream energy player extremely choppy.
(You can read the full research report on ConocoPhillips here >>>)
Other noteworthy reports we are featuring today include Elevance Health, Inc. (ELV), The Charles Schwab Corporation (SCHW) and Petróleo Brasileiro S.A. - Petrobras (PBR).
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
Retail & Cloud Businesses Momentum Benefits Alibaba (BABA)
Expanding LNG & Clean Energy Assets Aid TotalEnergies (TTE)
ConocoPhillips (COP) Continues to Bank on Oil-Rich Permian
Elevance's (ELV) Strategic Buyouts & Product Expansion Aid
Per the Zacks analyst, acquisitions, partnerships and product expansions are helping Elevance Health boost its portfolio, leading to steady revenue growth. Yet, rising costs are denting profits.
Strategic Acquisitions Aid Schwab (SCHW) Amid Cost Concerns
Per the Zacks analyst, while Schwab's inorganic growth initiatives and other revenue diversification efforts will aid profits, it might lead to higher costs, thus hurting the bottom line to an extent.
Pre-Salt Reserves Help Petrobras (PBR), Debt Mountain Hurts
The Zacks analyst believes Petrobras' stakes in Brazil's lucrative pre-salt oil reservoirs should improve its earnings outlook, but is concerned about the company's massive $42.8 billion debt load.
Product Launches, Focus on R&D Continue to Aid BD (BDX)
The Zacks analyst is upbeat about BD's continued focus on research and development and product launches over the past few months despite its operation in a highly competitive market.
lululemon (LULU) Tracks Well with E-commerce Expansion Plans
Per the Zacks analyst, lululemon is heavily investing in e-commerce capabilities like developing sites, transactional omni functionality and fulfilment options to capture the growing online demand.
Operating Prowess Aid Waste Connections (WCN), Liquidity Low
Per the Zacks analyst, Waste Connections' low-overhead, highly efficient operational structure allows it to expand into geographically contiguous markets. Low liquidity remains a concern.
Entertainment Business Aid Dave & Buster's (PLAY), Costs High
Per the Zacks analyst, Dave & Buster's is likely to benefit from strong entertainment business, menu innovation and remodeling initiatives. However, high operating expenses are a concern.
New Product Development, Wide Market Reach Aid Eaton (ETN)
Per the Zacks analyst Eaton's operations in 175 countries across the world and development of new products through ongoing R&D investments will continue to drive demand and boost profitability.
Expanding AI-Based Portfolio Aids Philips (PHG) Prospects
Per the Zacks analyst, Philips' top line growth is expected to benefit in the coming quarters driven by its AI-supported solutions that will aid in providing diagnosis faster and virtually.
DaVita (DVA) Rides on Its Patient-Centric Business Model
The Zacks analyst is upbeat about DaVita's patient-centric care model that leverages its platform of kidney care services despite its operation in a highly stiff competitive space.
Competition Threatens Novo Nordisk (NVO) Obesity Market Share
Per the Zacks Analyst, Novo Nordisk could lose obesity care market share as it struggles to meet Wegovy demand. Pricing Pressure and patent expiry of diabetes products are also a woe.
High Cost of Commodities & Labor to Ail Standard Motor (SMP)
Per the Zacks analyst, due to a wide spectrum of product offerings, Standard Motor is susceptible to the rising cost of different commodities. High labor costs also remain a concern.
CommScope (COMM) Marred by Soft Demand, Supply Chain Woes
Per the Zacks analyst, CommScope is likely to be plagued by soft demand patterns, higher inventory level caused by supply chain disruptions and rising operating expenses due to business uncertainties.
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