Top Stock Reports for Amazon.com, American Express & Philip Morris
Monday, March 18, 2024
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 Amazon.com, Inc. (AMZN), American Express Company (AXP) and Philip Morris International Inc. (PM). 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 >>>
Amazon.com shares have outperformed the Zacks Internet - Commerce industry over the past year (+78.5% vs. +53.4%). The company is gaining on solid Prime momentum owing to ultrafast delivery services and strong content portfolio. Strengthening relationship with third-party sellers is a positive.
Additionally, strong adoption rate of AWS is aiding the company’s cloud dominance. Expanding AWS services portfolio is continuously helping Amazon in gaining further momentum among the customers. Robust Alexa skills and expanding smart home products portfolio are positives.
The company’s strong global presence and solid momentum among the small and medium businesses remain tailwinds. Growing capabilities in grocery, pharmacy, healthcare and autonomous driving are other positives. Also, deepening focus on generative AI is a major plus. However, adverse macroeconomic challenges remain concerns.
(You can read the full research report on Amazon.com here >>>)
Shares of American Express have outperformed the Zacks Financial - Miscellaneous Services industry over the past year (+40.8% vs. +23.5%). The company’s growth initiatives, like launching new products, reaching new agreements and forging alliances, are boosting its revenues.
Consumer spending on T&E, which carries higher margins for AmEx, is advancing well. Its balance sheet looks strong with ample cash. Solid cash-generation abilities enable the pursuit of business investments and prudent deployment of capital via buybacks and dividends.
However, with higher utilization of the firm’s cards, expenses in the form of card member services and card maember rewards are likely to go up and strain its margins. Its current debt level amid a high-interest rate environment induces a rise in interest expenses. AmEx seems overvalued at the current price/earnings level. As such, the stock warrants a cautious stance.
(You can read the full research report on American Express here >>>)
Shares of Philip Morris have outperformed the Zacks Tobacco industry over the past year (+3.1% vs. -0.2%). The company has demonstrated impressive resilience amid rising costs due to its smoke-free strength. The company has been gaining from its pricing power. Higher pricing variance was an upside to the company’s performance in the fourth quarter of 2023 and is likely to remain a driver.
The consistent success of IQOS and the impressive growth of ZYN have further solidified the company’s position, keeping it well-placed to become a majority smoke-free company by 2030. For 2024, management expects net revenues to increase 6.5-8% on an organic basis.
However, growth-oriented investments, especially in IQOS ILUMA, may impact profits. Also, management expects the increased cost of leaf and wages to linger into 2024 before easing thereafter. Apart from this, Philip Morris has been witnessing soft cigarette volumes, which declined 1.4% in 2023.
(You can read the full research report on Philip Morris here >>>)
Other noteworthy reports we are featuring today include NIKE, Inc. (NKE), Bayer Synopsys, Inc. (SNPS) and Valero Energy Corporation (VLO).
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
Prime Momentum & Growing AWS Adoption Benefit Amazon (AMZN)
Improving Volumes Aid American Express (AXP), High Costs Hurt
Philip Morris (PM) Benefits from Strong Smoke-free Revenues
Featured Reports
NIKE's (NKE) Digital & Other Growth Efforts Look Encouraging
Per the Zacks analyst, NIKE's digital business is gaining from underlying consumer trends, including momentum in its mobile app, driven by improved traffic and increasing member buying frequency.
Valero (VLO) Gains on Higher Gulf Coast Refinery Throughput
The Zacks analyst is impressed by Valero's Gulf Coast refineries contributing the most to its total throughput volumes. Higher Gulf Coast export volumes will also support its margins.
Infrastructure Solution Demand Aids Quanta (PWR), Delays Hurt
Per the Zacks analyst, more demand for infrastructure solutions, aiding energy-transition efforts and modernization, will drive growth for Quanta. Yet, project delays and competition are risks.
Acquisitions to Aid Heico (HEI), Supply Chain Issue Woes
Per the Zacks analyst, disciplined acquisition strategy has been driving Heico's overall performance. However, supply chain disruptions have been impacting the company's material prices
Food Processing Equipment Group to Benefit Middleby (MIDD)
Per the Zacks analyst, solid traction of Middleby's Food Processing Equipment Group unit, fueled by full-line automated solutions for protein and bakery products, will continue to lend momentum to it.
AUM, Global Presence Aid Invesco (IVZ), Weak Revenues Hurt
Per the Zacks analyst, Invesco's robust AUM balance, strong balance sheet and global presence will support financials. Yet, macroeconomic woes and tough operating backdrop will likely hamper revenues.
Denali (DNLI) Pipeline Progress Good, Targeted Market Tough
Per the Zacks analyst, Denali pipeline of targeted candidates for neurodegenerative diseases is impressive. The recent pipeline progress has been encouraging. However, targeted markets are challenging
New Upgrades
Synopsys (SNPS) Banks on Strong Product Menu, Contract Wins
Per the Zacks analyst, Synopsys' focus on strengthening its product portfolio is helping it cater to the growing demand in the EDA market. Deal wins at leading semiconductor companies is a tailwind.
Cardinal Health's (CAH) Diverse Products Gives Competitive Edge
Per the Zacks analyst, Cardinal Health's diversified portfolio represents long-term opportunities. Its products provide the company with a competitive edge in the niche space with fierce competition.
Woodward (WWD) Benefits from Momentum in Aerospace Segment
Per the Zacks analyst, Woodward's performance is gaining from strength in its Aerospace segment. The Industrial segment is expected to gain from higher demand for power generation.
New Downgrades
Norfolk Southern (NSC) Reels Under Weak Freight Conditions
The Zacks analyst is worried about the below-par revenues due to the weak freight demand scenario. Elevated labor costs represent another headwind.
Lower IT Spending to Hurt DXC Technology's (DXC) Prospects
Per the Zacks analyst, DXC Technology's growth prospects might be hurt by soft IT spending as organizations are pushing back their large IT investment plans amid the macroeconomic headwinds.
Lower Headcount at Client Offices to Impact Paycom (PAYC)
Per the Zacks Analyst, Paycom's near-term results are likely to be hurt by headcount reductions across its client base due to growing recession concerns amid macroeconomic uncertainties.
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
NIKE, Inc. (NKE) : Free Stock Analysis Report
American Express Company (AXP) : Free Stock Analysis Report
Philip Morris International Inc. (PM) : Free Stock Analysis Report
Valero Energy Corporation (VLO) : Free Stock Analysis Report
Synopsys, Inc. (SNPS) : Free Stock Analysis Report
