Top Stock Reports for JPMorgan Chase, ServiceNow & American Express
Wednesday, September 06, 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 JPMorgan Chase & Co. (JPM), ServiceNow, Inc. (NOW) and American Express Co. (AXP). 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 >>>
Shares of JPMorgan Chase have outperformed the Zacks Banks - Major Regional industry over the year-to-date period (+10.7% vs. -3.8%). High interest rates, buyouts, global expansion efforts and a decent loan demand will aid net interest income (NII), while rising funding costs will weigh on it to an extent.
With green shoots visible in the investment banking (IB) business, IB fees are likely to witness a reversal next year. Yet, the volatile nature of the capital markets business and high mortgage rates are likely to make fee income growth tough.
Nonetheless, aided by solid earnings strength and balance sheet position, the company will be able to sustain enhanced capital distributions.
(You can read the full research report on JPMorgan Chase here >>>)
ServiceNow’s shares have outperformed the Zacks Computers - IT Services industry over the year-to-date period (+53.8% vs. +22.9%). The company has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation.
ServiceNow had 1724 total customers with more than $1 million in annual contract value at the end of the second quarter. ServiceNow’s expanding global presence, solid partner base and strategic buyouts are positives. New solutions — Automated service suggestions, Service Request Playbook and Workplace Scenario Planning — are helping it win new customers.
Expanding portfolio with new generative AI solutions is expected to drive top-line growth. Strategic alliances with the likes of Microsoft remain tailwinds. However, ServiceNow is suffering from high inflation, unfavorable forex, stiff competition, and a challenging macro-economic environment.
(You can read the full research report on ServiceNow here >>>)
Shares of American Express have outperformed the Zacks Financial - Miscellaneous Services industry over the year-to-date period (+9.5% vs. +7.9%). The company’s several growth initiatives, such as launching new products, reaching new agreements and forging alliances, are boosting its revenues.
Consumer spending on T&E, which carry higher margins for AmEx, is advancing well. Its balance sheet looks strong with manageable debt. Solid cash-generation abilities enable the pursuit of business investments and prudent deployment of capital.
However, with higher utilization of the firm’s cards, expense in the form of card member services and card member rewards is likely to go up and strain the margins. Marketing and business development expense is expected to rise. A high debt burden induces a rise in interest expenses. As such, the stock warrants a cautious stance.
(You can read the full research report on American Express here >>>)
Other noteworthy reports we are featuring today include Airbnb, Inc. (ABNB), Aon plc (AON) and 3M Company (MMM).
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
Buyouts, High Rates, Modest Loan Demand Aid JPMorgan (JPM)
Growing Customer Base & Partnerships Aid ServiceNow (NOW)
Robust Revenues & Cash Flows Aid American Express (AXP)
Featured Reports
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.
Aon's (AON) Robust Business Generation Aids, High Costs Hurt
Per the Zacks analyst, business generation, strong retention and acquisitions are helping AON enhance its capabilities, which, in turn, is boosting its profits. However, rising expenses is a concern.
Restructuring Actions to Aid 3M (MMM) Amid Demand Softness
The Zacks analyst is encouraged by 3M's restructuring actions to reduce costs, and improve margins and cash flow. However, lower consumer electronics and disposable respirator demand raise concerns.
Digital Transformation Driving Demand For CDW's Products
Per the Zacks analyst, CDW's product and solutions portfolio is gaining from ongoing digital transformation. High debt load and stiff competition remain concerns.
Jacobs (J) Banks on Solid Backlog Growth Amid High Costs
Per the Zacks analyst, Jacobs is benefiting from solid backlog level and strong performance across its portfolio. However, currency risks and high costs hurt growth prospects.
Alkermes (ALKS) Diversified Portfolio Fuels Growth
Per the Zacks analyst, marketed drugs like Aristada, Lybalvi and Vivitrol is fueling growth for Alkermes. However, Alkermes is highly dependent on manufacturing and royalty revenues.
Lower Airfreight & Cost Savings Plan Aid Gap's (GPS) Growth
Per the Zacks analyst, Gap has been witnessing cost leverage from lower airfreight, improved promotions and cost-cutting plans. It is likely to generate $150 million in annualized savings in FY23.
New Upgrades
Haemonetics (HAE) Thrives on Hemostasis Management Growth
The Zacks analyst is impressed with Haemonetics' continued growth in Hemostasis Management driven by increased utilization of TEG, benefits from pricing and strong capital sales.
Spin-off & Strategic Investments Aid MDU Resources (MDU)
Per the Zacks analyst, MDU Resources is set to benefit from spinoff of Knife River, allowing it to focus on regulated energy delivery. Its investment plans will improve the reliability of services.
Sabre (SABR) Rides on Gradual Recovery in Travel Industry
Per the Zacks analyst, Sabre's Travel Solutions business is benefiting from the gradual recovery in the global travel industry which is driving international and corporate bookings.
New Downgrades
High Costs, Low Yield to Hurt Patterson-UTI (PTEN)
The Zacks analyst is concerned about increasing operating costs in Patterson-UTI Energy's contract drilling unit. Its dividend yield of just over 2% is also relatively low for income investors.
Decline in Volumes & High Debt Hurt Union Pacific (UNP)
The Zacks analyst is concerned by a fall in volumes due to soft consumer markets and reduced fuel surcharge revenues. Also, Union Pacific's high-debt levels are concerns.
The Estee Lauder Companies' (EL) Margin Hurt by High Costs
Per the Zacks analyst, inflationary pressures are a concern for The Estee Lauder Companies gross margin. In the fourth quarter of fiscal 2023, its gross margin contracted 320 basis points to 67.8%.
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
JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
3M Company (MMM) : Free Stock Analysis Report
American Express Company (AXP) : Free Stock Analysis Report
Aon plc (AON) : Free Stock Analysis Report
ServiceNow, Inc. (NOW) : Free Stock Analysis Report
Airbnb, Inc. (ABNB) : Free Stock Analysis Report
