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Top Analyst Reports for NVIDIA, Meta Platforms & Exxon Mobil

Friday, May 24, 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 NVIDIA Corporation (NVDA), Meta Platforms, Inc. (META)). and Exxon Mobil Corporation (XOM), as well as two micro-cap stocks HF Foods Group Inc. (HFFG) and Blue Dolphin Energy Company (BDCO) The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.

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 >>>

NVIDIA has literally become the post child for AI leverage, which can be seen in the company's blockbuster stock marekt performance (+173.9% vs. +134.0% for the chips industry). The company is benefiting from the strong growth of artificial intelligence (AI), high-performance and accelerated computing.

The data center end-market business is benefiting from the growing demand for generative AI and large language models using graphic processing units (GPUs) based on NVIDIA Hopper and Ampere architectures. A surge in hyperscale demand and higher sell-ins to partners across the Gaming and ProViz end markets following the normalization of channel inventory are acting as tailwinds.

Collaborations with Mercedes-Benz and Audi are likely to advance its presence in the autonomous vehicles and other automotive electronics space. However, its near-term prospects are likely to be hurt by softening IT spending amid macroeconomic headwinds.

(You can read the full research report on NVIDIA here >>>)

Shares of Meta Platforms have outperformed the Zacks Internet - Software industry over the past year (+87.0% vs. +44.0%). The company is benefiting from steady user growth across all regions, particularly Asia Pacific. Increased engagement for its offerings like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver.

Meta Platforms is leveraging AI to recommend Reels content, which is driving traffic on Instagram and Facebook. Its innovative portfolio, which includes Threads, Reels, Llama 2, Ray-Ban Meta smart glass, and mixed reality device Quest 3 is likely to aid prospects. AI-recommended content now comprises more than 50% of the content people see on Instagram. Threads have more than 150 million monthly actives.

Meta now expects to invest significantly more over the next few years in developing more advanced models and the largest AI services in the world. However, monetization of these AI services will take considerable time, which is a concern.

(You can read the full research report on Meta Platforms here >>>)

Exxon Mobil shares have outperformed the Zacks Oil and Gas - Integrated - International industry over the past year (+12.1% vs. +11.9%). The company is a reliable player in the energy sector, boasts a resilient capital structure and a track record of prudent capex management. Its strategic discoveries in the Stabroek Block and Permian Basin promise growth and lower greenhouse gas intensity.

With a robust balance sheet, ExxonMobil prioritizes shareholder returns, evidenced by substantial buybacks and the strategic acquisition of Pioneer Natural Resources. The company aims to increase its annual share buybacks to $20 billion through 2025.

However, challenges loom, notably in the upstream operations, which are susceptible to volatile oil prices and regulatory hurdles. While committed to shareholders, ExxonMobil faces scrutiny for lagging industry peers in terms of dividend yield. Reliance on finding economically recoverable reserves and exposure to OPEC production cuts add to uncertainties.

(You can read the full research report on Exxon Mobil here >>>)

Shares of HF Foods have underperformed the Zacks Food - Miscellaneous industry over the past year (-4.9% vs. -3.9%). This microcap company with market capitalization of $165.72 million is facing challenges which includes high debt levels, low net profit margins, declining cash flow, and inventory management issues. Dependence on the Asian restaurant market, exposure to interest rate fluctuations, and geopolitical risks pose concerns.

The impact of exiting the chicken processing business and the risks associated with transformation initiatives persist. Nevertheless, HF Foods’ revenues increased 0.6% year over year in first-quarter 2024 despite exiting its chicken processing business in 2023.

Profitability improved significantly, with net loss narrowing and adjusted EBITDA increasing. Cost control measures, such as centralized purchasing, fleet enhancements, and digital transformation, are driving efficiencies. With a strong liquidity position, HF Foods is well-positioned for strategic mergers and acquisitions (M&A) to expand its footprint.

(You can read the full research report on HF Foods here >>>)

Blue Dolphin Energy’s shares have outperformed the Zacks Oil and Gas - Exploration and Production - United States industry over the past year (+104.9% vs. +17.8%). This microcap company with market capitalization of $94.75 million is operating in the strategic Eagle Ford Shale region, offers a robust investment option with its established market presence and considerable infrastructure, including a 15,000-barrel-per-day refinery and more than 1.25 million barrels of storage.

Financially, it managed costs effectively, reducing goods sold from $96.2 million in first-quarter 2023 to $79.2 million in first-quarter 2024, and secured a $5-million credit facility for liquidity.

However, risks include heavy reliance on refining margins, which saw first-quarter 2024 revenues drop to $91 million from $116.7 million the previous year, and high customer concentration, with 89% of 2023 revenues from two main customers. Moreover, persistent debt issues, significant default amounts, and concerns over affiliate transactions further cloud its financial stability.

(You can read the full research report on Blue Dolphin Energy here >>>)

Other noteworthy reports we are featuring today Philip Morris International Inc. (PM), Automatic Data Processing, Inc. (ADP) and Prologis, Inc. (PLD).

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

NVIDIA (NVDA) Rides on Strong Adoption of GPUs, Partnerships

User Growth, Instagram Strength Aids Meta Platforms (META)

ADVERTISEMENT

ExxonMobil's (XOM) Stabroek & Permian Basin Discoveries Aid

Featured Reports

Philip Morris (PM) Benefits from Strong Smoke-free Revenues
Per the Zacks analyst, Philip Morris' smoke-free transition keeps it well placed amid soft cigarette volumes. Smoke-free products generated 39% of the company's net revenues in first-quarter 2024.

Transformation Initiatives Aid ADP, Escalating Expenses Hurt
The Zacks analyst is positive about ADP's transformation initiatives that are helping the company to innovate, improve operations and expand margins. Rising expenses remain a concern.

Buyouts, Scale to Aid Prologis (PLD) Despite Moderate Demand
Per the Zacks analyst, Prologis is well-poised to gain from its scale, strategic buyouts and development activities, though moderating demand, elevated supply and high interest rates remain concerns.

Cigna (CI) Gains from Solid Evernorth Unit, High Costs Hurt
Per the Zacks analyst, Cigna gains from significant client wins in Evernorth Health Services and premium rate hikes and business mix in Cigna Healthcare. However, rising costs are a concern.

New Drugs Fuel Bristol Myers (BMY) Amid Generic Competition
Per the Zacks analyst, encouraging uptake of new drugs fuel growth for Bristol Myers. However, one of the top drugs Revlimid is facing generics, which has adversely impacted sales.

Avantor (AVTR) Continues to Gain From its Operational Workflow
The Zacks analyst is upbeat about Avantor's manufacturing capabilities, including features like flexible unit operations, despite its business being exposed to foreign exchange volatility.

Sensata (ST) Gains from Organic Growth Amid Forex Volatility
Per Zacks analyst, Sensata's performance is cushioned by healthy organic growth amid unfavorable foreign exchange movement. Increasing momentum in electrification business bodes well.

New Upgrades

Construction Materials Segment & Buyouts Aid Carlisle (CSL)
Per the Zacks analyst, impressive performance of Construction Materials segment driven by strong demand for reroofing products, and acquisitions like MTL Holdings, will lend momentum to Carlisle.

Louisiana-Pacific (LPX) Banks on Strong Siding & OSB Demand
Per the Zacks analyst, Louisiana-Pacific aids from rising demand for Siding and OSB. Robust volumes for ExpertFinish and BuilderSeries, higher commodity prices and operational efficiency bode well.

Improved Menu Pricing & Expansion Efforts Aids Brinker (EAT)
Per the Zacks analyst, Brinker is benefiting from effective marketing and pricing strategies. Also, focus on menu adjustments along with remodeling and expansion initiatives bode well.

New Downgrades

Falling Module Prices Continue to Hit Canadian Solar (CSIQ)
Per the Zacks analyst, falling average selling price of its modules may continue to hurt Canadian Solar in the near term. Uncertainties related to the Chinese legal system also remains a concern

Advanced Technology Solutions Segment Alis Nordson (NDSN)
Per the Zacks analyst, Nordson is struggling with the poor performance of the Advanced Technology Solutions segment due to decrease in demand for electronics product lines.

High Expenses, Cat Loss Concern Selective Insurance (SIGI)
Per the Zacks analyst, Selective Insurance is exposed to catastrophes loss, which results in volatility in its earnings. Also, rising expenses due to higher losses weigh on margin expansion.

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

Automatic Data Processing, Inc. (ADP) : Free Stock Analysis Report

Exxon Mobil Corporation (XOM) : Free Stock Analysis Report

Prologis, Inc. (PLD) : Free Stock Analysis Report

Philip Morris International Inc. (PM) : Free Stock Analysis Report

NVIDIA Corporation (NVDA) : Free Stock Analysis Report

Blue Dolphin Energy Co. (BDCO): Free Stock Analysis Report

HF FOODS GROUP INC. (HFFG): Free Stock Analysis Report

Meta Platforms, Inc. (META) : Free Stock Analysis Report

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Zacks Investment Research