The Zacks Analyst Blog Highlights Intuitive Surgical, Ingersoll Rand and Weyerhaeuser
For Immediate Release
Chicago, IL – September 19, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Intuitive Surgical ISRG, Ingersoll Rand IR and Weyerhaeuser WY.
Here are highlights from Monday’s Analyst Blog:
To Center Stage for the Fed: Global Week Ahead
In the Global Week Ahead, central banks take center stage.
Five of the 10 central banks with the most heavily traded currencies — including the U.S. Fed — hold rate-setting meetings.
Plus, we hear from a swathe of emerging market central banks.
Next are Reuters' five world market themes, reordered for equity traders—
(1) On Wednesday, the FOMC meeting breaks up. Fresh economic projections will be a key focus.
The European Central Bank (ECB) just signaled an end to its aggressive rate hikes, cheering markets. Now it's the turn of the world's most important central bank.
The Fed is widely expected to leave its key rate in a 5.25-5.50% range when it concludes a meeting on Wednesday.
Latest inflation numbers were slightly stronger than expected, but that has done little to bolster the case for an imminent rate increase.
Whether it's the United States or Europe, investors suspect this global rate tightening cycle is nearing an end.
That doesn't mean worries about potentially sticky inflation will keep rates higher for longer.
And a hawkish tone from Fed Chief Jerome Powell could keep U.S. Treasury yields elevated, dulling the allure of stocks further but supporting the dollar.
(2) On Thursday, we hear from Sweden's Riksbank, the U.K.'s Bank of England, and Norway's central bank.
Interest rate decisions in the U.K., Scandinavia and Switzerland will give clues on whether these northern European economies can withstand any more monetary tightening.
Sweden's Riksbank is seen hiking by 25 basis points to 4.0%, despite mounting economic pain with output shrinking, a weak currency and above-target inflation despite a decline to 4.7% in August.
Also on Thursday, the Bank of England is tipped to hike for the 15th consecutive meeting, taking benchmark borrowing costs to 5.5%. Even as headline inflation falls as home prices drop, a significant minority of economists expect a further hike this year.
Norway's central bank is also expected to nudge benchmark borrowing costs higher, following a 25 bps rise in August to 4.0%.
Money market bets on whether Switzerland will raise, or hold at 1.75%, are evenly split.
(3) On Friday, Sept. 22nd, the Bank of Japan (BoJ) steps up.
Recent comments by Bank of Japan Governor Kazuo Ueda set a fire under Japan's government bond market, sending benchmark yields soaring above 0.7% for the first time in almost a decade.
The spark was a sudden hawkish tilt: Only weeks after doubling the 10-year yield ceiling to 1%, Ueda was talking about the possible end of negative short-term rates by year-end.
The BoJ policy decision and news conference on Sept. 22nd has become crucial: first, to find out if another policy tweak is underway, and then, to see whether Ueda clarifies his position after judging the market's reaction.
Some surprised BoJ watchers hypothesize that his shift was brought about by the yen's slide to a 10-month trough at 147.875 per dollar, which started to worry Japan's Ministry of Finance.
But deeds rather than words may be necessary to halt the decline: After a rebound, the yen is back languishing around 147.30.
(4) Wednesday, the Banco do Brasil meets. Thursday for Turkey & South Africa.
The push and pull factors on central banks are nowhere more visible than in emerging markets.
Much of Latin America, which delivered quick and big on hikes in the last tightening cycle, is now firmly in easing mode.
Brazil's policy-makers meeting on Wednesday are expected to stick to their pledge of 50 bps-per-meeting cuts to reduce the benchmark currently at 13.25%.
But for Turkey's central bank, convening on Thursday, the only way is up.
Grappling to put monetary policy back on an orthodox track after years of President Tayyip Erdogan pushing for lower rates despite soaring inflation, analysts see policy- makers lifting the benchmark to 35% by year-end from 25% now.
South Africa will keep rates steady at 8.25% at its Thursday meeting to curb the impact of fuel price inflation. Egypt and Taiwan central banks meet the same day.
(5) Many European PMIs are contracting.
August was the month Europe's consumers finally caved.
The services sector fell into contraction for the first time this year, compared with 13 straight months of shrinking activity for manufacturing.
One sub-50 reading doesn't scream disaster, but the downturn was much deeper than many anticipated. It sounded alarm bells, knocking as much as 1% off the euro at one point on the day of release.
Activity across the broader economy has withered and economists believe a Eurozone recession is rapidly becoming inevitable, particularly given deteriorating business activity.
There is hope, however, that the factory sector might be past the worst of the downturn, and flash Purchasing Manager Index (PMI) surveys on Sept. 22 may confirm that.
But with consumers feeling the pain of high interest rates and inflation, recovery in Europe's services sector might be a more distant prospect.
Zacks #1 Rank (STRONG BUY) Stocks
Here are three large-cap picks with Momentum scores of A.
(1) Intuitive Surgical:
This is a $303 stock in the Medical Instruments industry. That gives it a $106.4B market cap. I see a Zacks Value score of F, a Zacks Growth score of C, and a Zacks Momentum score of A.
Headquartered Sunnyvale, CA, Intuitive Surgical Inc. designs, manufactures and markets the da Vinci surgical system, Ion endoluminal system and related instruments and accessories.
The da Vinci surgical system is an advanced robot-assisted surgical system. The surgical system comprises a surgeon's console, patient-side cart, 3-D vision system, da Vinci Skills Simulator and Firefly Fluorescence Imaging.
Intuitive Surgical's robot-based da Vinci surgical system enables minimally-invasive surgery that reduces the trauma associated with open surgery. The da Vinci System is powered by robotic technology which has provided the company with a solid exposure to Mechatronics, Robotocs and Artificial Intelligence for healthcare.
The system provides 3-D High Definition vision, which helps surgeons gain superior visual clarity of target tissue and anatomy. Its Ion endoluminal system is a flexible, robotic-assisted, catheter-based platform that utilizes instruments and accessories for minimally invasive biopsies in the lung. The system can be used beyond surgery into diagnostic, endoluminal procedures as well.
It also manufactures EndoWrist instruments, such as forceps, scissors, electrocautery tools, scalpels, and other surgical tools, which incorporate wrist joints for natural dexterity for various surgical procedures.
Additionally, the company sells various accessories comprising sterile drapes for ensuring sterile field during surgery; and vision products that include replacement 3D stereo endoscopes, camera heads, light guides, and other items that facilitate use of the da Vinci Surgical System, as well as Ion endoluminal system for biopsies.
The company operates through three segments: Instruments and Accessories, Systems, and Services.
2022 Results at a Glance
Intuitive Surgical's 2022 revenues totaled $6.22 billion, up +9% from 2021.
The company's Instruments & Accessories sales were $3.52 billion (56.5% of net revenues), Systems revenues were $1.68 billion (27%) and Services revenues grossed $1 billion (16.5%).
(2) Ingersoll Rand:
This is a $67 stock in the Manufacturing – General Industrial space. That gives it a $25.6B market cap. I see a Zacks Value score of F, a Zacks Growth score of D and a Zacks Momentum score of A.
Headquartered in Davidson, NC, Ingersoll Rand Inc. is a global industrial company, with expertise in industrial and mission-critical flow creation technologies. It came into existence when Gardner Denver Holdings, Inc. acquired the Industrial segment of Ingersoll-Rand plc in February 2020.
It is worth noting here that Ingersoll Rand completed the divestment of a majority stake in its High Pressure Solutions business to American Industrial Partners on Apr 1st, 2021. The divested business was classified as discontinued operations, beginning first-quarter 2021.
Ingersoll Rand also divested its Specialty Vehicle Technologies segment to Platinum Equity — a global private equity firm — on Jun 1, 2021. The divested business has been classified as discontinued operations, beginning second-quarter 2021.
The company reported third-quarter 2022 results with two segments. A brief discussion of the quarterly results is provided below:
Industrial Technologies & Services (accounting for 79.5% of 2022 revenues) segment engages in manufacturing products, including air compressors, couplers, vacuum pumps, power tools, blowers and others. Key brands are ComAir, Emco Wheaton, Garo, Ingersoll Rand, Nash, Gardner Denver and others.
The segment comprises the Industrials business of Gardner Denver, and Compression Technologies and Services business of Ingersoll Rand. The combined business will operate through three units — the Asia Pacific, Americas, and Europe, Middle East, India and Africa (EMEIA). Also, the segment will include the Power Tools and Lifting business unit and the Pressure and Vacuum Solutions business unit.
Precision & Science Technologies (20.5%) segment engages in manufacturing products, including doing and metering pumps (for use in multiple industries) and liquid and gas pumps for use in life sciences, lab and medical markets. Key brands are Hartell, Welch, ARO, Dosatron and others.
The segment comprises the Industrial Precision Flow Systems business of Ingersoll Rand as well as Medical and Specialty Pumps business units of Gardner Denver.
(3) Weyerhaeuser:
This is a $33 stock in the Building Products-Wood industry. That gives it a $23.5B market cap. I see a Zacks Value score of C, a Zacks Growth score of F, and a Zacks Momentum score of A.
Based in Washington, Weyerhaeuser Company is one of the leading U.S. forest product companies with operations primarily concentrated in Southern California, Nevada, Washington, Texas, Maryland and Virginia.
The company caters to a diverse clientele spread over the United States, Canada, Japan, Europe and other regions.
The company grows and harvests trees, builds homes and manufactures forest products worldwide, primarily to be used as lumber, pulp and paper, and other wood and building products.
It offers logs, hardwood lumber, timber, poles and plywood, as well as minerals, oil, gas, seeds and seedlings.
The company operates through three business segments including:
The Wood Products segment (78%) deals with the sale of plywood, softwood lumber, engineered wood products, oriented strand board (OSB), fiberboard and building materials distribution.
The Timberlands segment (contributing 23.8% to 2022 net sales) is engaged in the sale of logs, stumpage and pay-as-cut timber.
The Real Estate, Energy and Natural Resources segment (3.6%) deals with the results from an equity interest in Plum Creek Real Estate development joint ventures.
Also, the segment is responsible for disposition of properties, non-core timberlands, and royalties related to minerals and oil and gas assets.
As of Jun 30th, 2023, Weyerhaeuser had cash and cash equivalents of $1,095 million, down from $1,581 million at 2022-end but up from $797 million at March 2023-end. Long-term debt was $4,817 million at the quarter-end, up from $4,071 million at 2022-end and $4,072 million at March 2023-end.
Net cash from operations was $496 million for the second quarter, down from $1,146 million a year ago but up from $126 million in the prior quarter.
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Intuitive Surgical, Inc. (ISRG) : Free Stock Analysis Report
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