Friday, August 5, 2022
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 Pfizer Inc. (PFE), The Progressive Corporation (PGR), and The PNC Financial Services Group, Inc. (PNC). 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 >>>
Pfizer shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+13.3% vs. +9.4%), reflecting the company's diversified portfolio of innovative drugs and vaccines, including Ibrance and Prevnar.
The Zacks analyst believes that no company is as strongly placed in the COVID vaccines/treatment market as Pfizer right now. Its COVID-19 vaccine has become a key contributor to the top line. The vaccine together with Pfizer’s promising oral antiviral pill for COVID-19, Paxlovid is expected to generate a combined $54 billion in sales in 2022.
Pfizer boasts a sustainable pipeline with multiple late-stage programs that can drive growth. However, currency headwinds and pricing pressure are key top-line headwinds. Concerns remain about its long-term growth drivers beyond its COVID-related products due to competitive pressure.
(You can read the full research report on Pfizer here >>>)
The Progressive shares have outperformed the Zacks Insurance - Property and Casualty industry over the past year (+23.9% vs. -5.2%) on the back of a favorable outlook for premiums, a compelling product portfolio, leadership position and strength in both Vehicle and Property businesses.
Its focus on becoming a one-stop insurance destination, catering to customers opting for a combination of home and auto insurance, augurs well for the company's growth. Policies in force and retention ratio should remain healthy. Competitive pricing to retain current customers and address customer needs with new offerings should continue to drive policy life expectancy.
However, exposure to catastrophe losses induces underwriting volatility. Escalating expenses due to higher losses and settlement expenses remain an overhang on the company's margin. High debt level along with low times earned interest pose financial risk.
(You can read the full research report on Progressive here >>>)
PNC shares have declined -9.0% over the past year against the Zacks Banks - Major Regional industry’s decline of -16.7%, reflecting improving outlook as a result of higher interest rates, partly offset by recessionary risks.
Higher net interest income (NII) and loan growth support PNC Financial's second-quarter results against headwinds like higher expenses and a declining deposit. Economic growth and decent pipelines are expected to support balance-sheet strength. With the gradual rising rates, the company’s NII and margins are positioned to increase.
Planned investments in inorganic expansion strategies have strengthened its banking franchise and diversified business mix. Sound capital deployment activities are other positives.
(You can read the full research report on PNC here >>>)
Other noteworthy reports we are featuring today include MercadoLibre, Inc. (MELI), Arista Networks, Inc. (ANET), and Hess Corporation (HES).
Director of Research
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
Pfizer's (PFE) 2022 Sales to Ride on COVID Vaccine & Pill
Progressive's (PGR) Solid Policies in Force Aid, Cat Loss Ail
Strong Balance Sheet Aids PNC Financial (PNC), High Costs Ail
MercadoLibre (MELI) Gains From Total Payment Volume Growth
Per the Zacks analyst, MercadoLibre benefits from solid total payment volume growth which is driven by strong momentum across Mercado Pago and mobile-point-of-sale business.
Hess (HES) Gains From Latest Discoveries at Stabroek Block
Per the Zacks analyst, Hess' two discoveries at the Stabroek Block will add to the block's recoverable resource estimates of 11 billion barrels. Yet, its significant level of leverage is concerning.
Higher Input Costs, China Slowdown Hurt DuPont (DD)
Per the Zacks analyst, higher raw material costs due to supply-chain issues will weigh on DuPont's margins. Sales in its Interconnect Solutions unit will also be hurt by the slowdown in China.
Business Recovery Aids Zimmer Biomet (ZBH) Amid Cost Issues
The Zacks analyst is impressed with Zimmer Biomet's strong business recovery so far in 2022 within Knee and Hip arms globally. Yet, a contraction in the company's gross margin is concerning.
Freight Demand, Dividends, Buybacks Aid C.H. Robinson (CHRW)
The Zacks analyst is encouraged by C.H. Robinson's top line growth owing to strong freight demand. The company's efforts to reward shareholders through dividends and buybacks are also impressive.
Hyatt (H) Banks on Unit Expansion Efforts, RevPAR Dismal
Per the Zacks analyst, Hyatt's focus on new hotel openings and acquisition initiatives bode well. However, lag in RevPAR from pre-pandemic levels is a concern.
Programs Aid Hexcel Corporation (HXL), COVID Impacts Woe
Per the Zacks analyst, impressive set of programs tend to boost Hexcel's long-term growth prospects. Yet COVID-19 impact on prices and volumes of Hexcel's products might hurt the stock.
Arista (ANET) Rides on Higher Demand for Cloud Deployments
Per the Zacks analyst, Arista is likely to benefit from continued spending on IT infrastructure for deployment in cloud environments and diversification across its top verticals and product lines.
MGIC Investment (MTG) is Set to Grow on New Insurance Written
Per the Zacks analyst, MGIC Investment is set to grow on new insurance written aided by the increase in the mortgage origination market and higher refinance activity.
Strength in Resistors & Diodes Offerings Aids Vishay (VSH)
Per the Zacks analyst, Vishay is benefiting from strong adoption of resistors and diodes across automotive, industrial, military and medical markets.
Kohl's (KSS) Gross Margin Hurt by Escalated Freight Costs
Per the Zacks analyst, Kohl's gross margin remains troubled by freight cost headwinds. Gross margin is likely to decline 100-125 basis points in 2022 owing to freight and product cost inflation.
Expenses, Tough Operating Backdrop Hurt SVB Financial (SIVB)
Per the Zacks analyst, elevated operating expenses are likely to hurt SVB Financial's bottom line. Geopolitical and recessionary fears are other headwinds, which will likely weigh on its financials.
Weakness in Home Furnishing Market Hurts Overstock.com (OSTK)
Per the Zacks analyst, Overstock.com is suffering from weakness in the home-furnishing market, despite an expanding mobile clientele.
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The PNC Financial Services Group, Inc (PNC) : Free Stock Analysis Report
Pfizer Inc. (PFE) : Free Stock Analysis Report
Hess Corporation (HES) : Free Stock Analysis Report
The Progressive Corporation (PGR) : Free Stock Analysis Report
MercadoLibre, Inc. (MELI) : Free Stock Analysis Report
Arista Networks, Inc. (ANET) : Free Stock Analysis Report
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