The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features a real-time update on the ongoing Q4 earnings season, in addition to fresh analyst reports on 16 major stocks, including NIKE, Inc. (NKE), Airbnb, Inc. (ABNB) and CVS Health Corporation (CVS). 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 >>>
Q4 Earnings Seaosn Scorecard
Including all of this morning's results, we now have Q4 results from 351 S&P 500 members or 70.2% of the index's total membership. Total earnings for these companies are up +5.6% from the same period last year on +3.7% higher revenues, with 79.5% beating EPS estimates and 64.7% beating revenue estimates.
As we have noted all along in our earnings commentaries, the Q4 earnings and revenue growth rates represent an acceleration relative to what we have been seeing from this group of index members in other recent periods. The EPS beats percentages are roughly in-line with historical averages, though the revenue beats percentage is tracking towards the lower end of the range over the preceding 20-quarter period.
Looking at Q4 as a whole, combining the actual resutls for the 351 index members with estimates for the still-to-come companies, total earnings are on track to be up +5.5% on +3.2% higher revenues.
The Tech and Energy sectors are driving the Q4 growth pace in opposite directions, with the Energy sector dragging it down and the Tech sector giving it a boost. Excluding the Tech sector's contribution, Q4 earnings for the rest of the index would be down -1.7% instead of up +5.5% as a whole.
Today's Featured Analyst Reports
NIKE shares have modestly done better than the Zacks Shoes and Retail Apparel industry over the last six months (-0.4% vs. -5.7%). The Zacks analyst believes that continued progress on consumer direct acceleration strategy, compelling product innovation and digital leadership have driven the company’s business. Robust consumer trends, including momentum in the NIKE mobile app led by improved traffic and increased member buying frequency have aided the digital segment.
However, inflationary pressure and elevated expenses have been major headwinds.
(You can read the full research report on NIKE here >>>)
Airbnb shares have outperformed the Zacks Internet - Content industry over the past year (+27.3% vs. +19.8%). The Zacks analyst believes that improvement in booked Nights and Experiences, increasing guest demand and continuous recovery from the pandemic years in cross-border travel are benefitting the company. Strength in active listings owing to supply growth across Asia Pacific and Latin America have also aided.
Yet, great volatility in travel demand due to macroeconomic uncertainties, rising competition and impacts of geopolitical conflicts remain major concerns.
(You can read the full research report on Airbnb here >>>)
Shares of CVS Health have outperformed the Zacks Retail - Pharmacies and Drug Stores industry over the past six months (+4.0% vs. -3.1%). Per the Zacks analyst, strong sales momentum across all three operating segments have been helping the company’s topline. New acquisitions and fresh launches like Cordavis are also likely to boost future growth.
However, decline in COVID-19 vaccinations and testing sales and persistent pharmacy reimbursement headwinds continue to impact business performance.
(You can read the full research report on CVS Health here >>>)
Other noteworthy reports we are featuring today include ONEOK, Inc. (OKE), Imperial Oil Limited (IMO) and Arch Capital Group Ltd. (ACGL).
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
NIKE's (NKE) Digital Business to Aid Sales in the Near Term
Airbnb (ABNB) Banks on Strong Nights & Experiences Bookings
CVS Health (CVS) Digital Offerings Grow Amid Stiff Rivalry
Featured Reports
BEAM's Gene-Therapy Pipeline Holds Promise Amid Competition Per the Zacks analyst, BEAM's lead candidate, BEAM-101, a base-editing therapy being developed to treat two rare diseases, holds promise. However, stiff competition in the target market remains a woe.
Imperial (IMO) to Gain from Majority Holding by ExxonMobil The Zacks analyst believes that Imperial Oil's financial backing by majority owner ExxonMobil adds to the company's financial stability but is worried over the increasing operating expense.
Southwest Airlines (LUV) Rides on Air Travel Demand, Costs Ail The Zacks Analyst is impressed with the fact that increased air-travel demand is aiding Southwest Airlines' top-line performance. However, rising fuel costs continues to weigh on the bottom line.
FUJIFILM (FUJIY) To Benefit From Strong Product Portfolio Per the Zacks analyst, FUJIFILM's performance benefitted from strong revenue growth across healthcare and imaging business segments. However, stiff competition is a major headwind.
Product Diversification, Rate Hike Aid Arch Capital (ACGL) Per the Zacks analyst, Arch Capital is set to grow on rate increases and growth in existing accounts. Global operations and compelling product portfolio provides diversification and earnings stability
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 aid financials. Yet, macroeconomic woes and tough operating backdrop will likely hurt revenues.
Carnival (CCL) Banks on Booking Improvements, High Costs Ail Per the Zacks analyst, Carnival benefits from improved booking trends courtesy of strong demand, bundled package offerings and advertising activities. However, high operating expenses is a concern.
New Upgrades
Fee-Based Contracts, Wide-spread Assets Aid ONEOK (OKE) Per the Zacks analyst ONEOK benefits from fee-based contracts in its all three segments??and midstream assets located in very productive region drives operation.
Exact Sciences (EXAS) Rides on Broad-Based Cologuard Uptake The Zacks Analyst is impressed that Exact Sciences' Screening revenue growth is being driven by its flagship Cologuard test. The next-generation Cologuard is poised to raise the performance bar.
Backlog, Positive Budget to Bolster Huntington Ingalls (HII) Per the Zacks analyst, solid backlog count for Huntington Ingalls boosts its revenue growth prospects. Also, favorable U.S. budget for shipbuilding is expected to bolster the stock.
New Downgrades
Weak Industrial Demand, China Slowdown Hurt DuPont (DD) Per the Zacks analyst, soft demand and de-stocking in the industrial-based businesses will hurt DuPont's organic sales. Its water business is also affected by the economic slowdown in China.
Cost Concerns, Production Challenges Ail Newmont (NEM) As per the Zacks analyst, Newmont faces headwinds from rising production costs and increased capital spending. Lower production will also impact its performance.
Declining Active Accounts & Competition Hurt PayPal (PYPL) Per the Zacks analyst, PayPal is suffering from continuous loss of unengaged accounts, resulting in a decline in active accounts. Rising competition from Apple and others is also a concern.
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