Wednesday, November 15, 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 Oracle Corp. (ORCL), PepsiCo, Inc. (PEP) and Salesforce, Inc. (CRM). 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 Oracle have gained +47.5% over the past year versus the Zacks Computer - Software industry’s gain of +49.8%. The company is benefiting from ongoing momentum across its cloud business, driven by the strong uptake of Oracle Cloud and Autonomous Database offerings.
Solid adoption of cloud-based applications, comprising NetSuite Enterprise Resource Planning (ERP) and Fusion ERP bodes well. Oracle’s Gen 2 Cloud is performing better at a lower cost due to high bandwidth and low-latency RDMA networks. Partnerships with VMWare and Microsoft is helping Oracle win new clientele.
ORCL is launching a generative AI cloud service for enterprise customers. Its share buybacks and dividend policy are noteworthy. However, higher spending on product enhancements, especially toward the cloud platform, amid increasing competition in the cloud domain is likely to limit margin expansion.
(You can read the full research report on Oracle here >>>)
PepsiCo’s shares have underperformed the Zacks Beverages - Soft drinks industry over the past year (-3.2% vs. +5.4%). The company witnessed cost pressures driven by impacts of supply-chain disruptions and inflationary labor, transportation and commodity costs. Adverse currency rates also remain headwinds.
Nevertheless, PepsiCo boasts a robust surprise trend, which continued in second-quarter 2023. PEP’s revenues and earnings beat the Zacks Consensus Estimate for the sixth straight quarter in second-quarter 2023. It also reported the seventh straight quarter of double-digit organic revenue growth in the second quarter.
The results reflect strength and resilience in its diversified portfolio, modernized supply chain, improved digital capabilities, flexible go-to-market distribution systems and robust consumer demand trends. Resilience and strength in the global beverage and convenient food businesses also aided results.
(You can read the full research report on PepsiCo here >>>)
Shares of Salesforce have outperformed the Zacks Computer - Software industry over the year-to-date period (+66.8% vs. +52.8%). The company is benefiting from a robust demand environment as customers are undergoing a major digital transformation.
Its sustained focus on introducing more aligned products as per customer needs is driving its top-line. Continued deal wins in the international market is another growth driver. The acquisition of Slack has positioned the company as a leader in enterprise team collaboration solution space and placed at a better competitive position against Microsoft’s Teams product.
However, stiff competition and unfavorable currency fluctuations are concerns. Besides, challenging macroeconomic environment might hurt its growth prospects in the near-term.
(You can read the full research report on Salesforce here >>>)
Other noteworthy reports we are featuring today include S&P Global Inc. (SPGI), The Goldman Sachs Group, Inc. (GS) and BlackRock, Inc. (BLK).
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
Oracle (ORCL) Gains from Cloud Suite Adoption & Partnerships
Robust Demand to Boost PepsiCo's (PEP) Top Line Performance
Digital Transformation and Acquisitions Aid Salesforce (CRM)
IHS Markit Merger Aid S&P Global (SPGI) Amid High Debt
Per the Zacks analyst, the buyout of IHS Markit is expected to enhance S&P Global's data and analytics offerings. However, a high debt balance is a headwind.
Business Diversification Aids Goldman (GS) Amid Cost Woes
Per the Zacks analyst, business diversification along with organic growth is likely to support Goldman's financials, amid rising expenses and geopolitical concerns.
Buyouts, Robust AUM Growth Aid BlackRock (BLK), Costs Ail
Per the Zacks analyst, BlackRock's acquisition efforts along with the continued rise in its assets under management balance will aid the top line. Higher administration costs will likely hurt profits.
Telefonica (TEF) To Benefit From Strong Product Portfolio
Per the Zacks analyst, Telefonica's performance benefitted from strong revenue growth across Telefonica Brasil and Tech business segment. However, stiff competition is a major concern
Voya Financial (VOYA) Benefits From Investment Management
Per the Zacks analyst, solid performance at the Investment Management segment backed by increased investment capital revenues and higher fee-based margin has been driving revenue growth at the company
Solid Demand Aids Norwegian Cruise (NCLH), High Costs Hurt
Per the Zacks analyst, strong demand patterns, cost-saving initiatives and pricing growth aid Norwegian Cruise. However, high-cost environment and geopolitical risks mar growth prospects.
Expanding Portfolio Aids Advanced Energy's (AEIS) Prospects
Per the Zacks analyst, Advanced Energy benefits from an expanding portfolio with the introduction of 19 products this year.
Apellis (APLS) Rides on Robust Initial Sales of Syfovre
Per the Zacks , Apellis' newly launched drug, Syfovre is witnessing robust initial sales uptake owing to strong demand. Empaveli, the company's other drug, is also generating incremental sales.
Reliable Assets, Customer Increase Aid Southwest Gas (SWX)
Per the Zacks analyst, Southwest Gas' investment in infrastructure is making its assets more reliable. Economic improvement and rising customer base is generating demand and boosting performance.
Liberty Energy (LBRT) to Benefit from Multi-Basin Presence
The Zacks analyst believes that Liberty Energy's widespread presence in the top North American shale plays provides it with a competitive advantage over its peers.
Customer Destocking & Higher Costs Hurt Ingevity (NGVT)
Per the Zacks analyst, Ingevity is facing challenges driven by cost-related headwinds, coupled with challenges in its Industrial Specialties unit due to customer destocking.
Weakness in Americas Segment to Hurt Capri Holdings (CPRI)
Per the Zacks analyst, weak performance in Capri Holdings' Americas segment owing to a sluggish demand environment across Versace, Jimmy Choo and Michael Kors brands is weighing on its results.
Dull Mineral Nutrition Arm, Macro Woes Hurt Phibro (PAHC)
The Zacks analyst is worried about the soft demand for Phibro's Mineral Nutrition products dampening the core segment's revenues. Challenging macroeconomic issues continue to concern.
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