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Top Research Reports for Meta Platforms, Elevance Health & Canadian Natural Resources

Tuesday, April 23, 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 Meta Platforms, Inc. (META), Elevance Health, Inc. (ELV) and Canadian Natural Resources Limited (CNQ). 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 >>>

Meta Platforms shares have outperformed the Zacks Internet - Software industry over the year-to-date period (+36.2% vs. +11.6%). 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. Reels continued to do very well across both Instagram and Facebook driven by growing adoption. People reshared Reels 3.5 billion times every day during the fourth-quarter.

However, challenging macroeconomic conditions remain a headwind for Meta’s advertising revenues. Slow monetization of Reels, along with mounting operating losses at Reality Labs, are concerns.

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

Shares of Elevance Health have outperformed the Zacks Medical Services industry over the past year (+16.4% vs. +2.4%). The company’s revenue growth, fueled by premium rate increases and rising memberships, contributes to its positive trajectory. Strategic acquisitions and partnerships have fortified its business portfolio.

Notably, a robust Medicare Advantage segment, combined with successful contract acquisitions, is poised to drive future memberships. It increased the 2024 earnings guidance to $37.20 per share, compared with previous year’s $33.14 figure. The Carelon business is a key contributor to its success. It utilizes excess capital to boost shareholder value.

However, its rising expenses continue to put pressure on margins. Its high balance sheet debt is reducing financial flexibility. Also, its declining free cash flow is a concern. As such, the stock warrants a cautious stance.

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

Shares of Canadian Natural Resources have outperformed the Zacks Oil and Gas - Exploration and Production - Canadian industry over the past year (+31.5% vs. +17.2%). The company’s balanced and diverse production mix facilitates long-term value and reduces the risk profile. Canadian Natural’s acquisition of Athabasca Oil Sands project in 2017 has added significant value to its asset base and buoyed the production prospects.

Notably, lower capital needs and improving operational efficiencies have enabled the company to generate significant free cash flow. What’s more, the company remains committed to investor friendly moves by the way of dividend payout and stock buybacks.

However, Canadian Natural is set to face debt maturities each year out till 2027. Further, the C$3.25-billion term loan to fund the Devon Energy asset buy has worsened the company’s debt-to-capital ratio and led to higher interest outgo. The interplay of these factors accounts for the cautious stance.

(You can read the full research report on Canadian Natura Resources here >>>)

Other noteworthy reports we are featuring today include The Coca-Cola Company (KO), The Progressive Corporation (PGR) and Hess Corporation (HES).

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

User Growth, Instagram Strength Aids Meta Platforms (META)

Elevance's (ELV) Strategic Buyouts & Product Expansion Aid


Diverse Production Mix to Aid Canadian Natural (CNQ)

Featured Reports

Product Innovation Reflect Coca-Cola's (KO) Core Strength
Per the Zacks analyst, Coca-Cola continues to focus on diversifying its portfolio to tap into the rapidly growing ready-to-drink alcohol beverages category, as part of its innovation strategy.

Healthy Demand for Rental Units Aid Equity Residential (EQR)
Per the Zacks Analyst, Equity Residential is likely to gain from the healthy demand for residential units amid high home ownership costs, though elevated deliveries and high interest rates are woes.

Growing Regulated Base, Investments Aid FirstEnergy (FE)
Per the Zacks analyst, FirstEnergy's investment of $26 billion through 2028, will strengthen its existing operations. The Energize365 program will boost its regulated transmission capabilities.

Zillow Group (ZG) Poised to Benefit from Generative AI Focus
Per the Zacks analyst, Zillow Group is likely to benefit from the introduction of Generative AI for improved visual and multimodal capabilities to better connect and engage with potential customers.

Strategic Partnerships Aid Caesars (CZR), High Costs Ail
Per the Zacks analyst, Caesars is likely to benefit from strategic partnerships, property development and digitalization. However, increased casino, food and beverage expenses are concerns.

Maximus (MMS) Gains From BZ Bodies Buyout Amid High Costs
Per the Zacks Analyst, the acquisition of BZ Bodies has strengthened Maximus's services within the United Kingdom. Rising expenses remain a concern.

Intellia (NTLA) Banks on Genome Editing Pipeline Amid Rivalry
Per the Zacks analyst, Intellia's genome-editing candidate, NTLA-2001 being developed to treat transthyretin amyloidosis, holds promise. However, stiff competition in the target market remains a woe.

New Upgrades

Solid Policies in Force, High Retention Aid Progressive (PGR)
Per the Zacks analyst, Progressive is set to grow on, solid policies in force, competitive rates and leadership position. However, cat loss exposure inducing underwriting volatility ails.

Hess' (HES) Fee-Based Revenues From Gathering Activities Aid
Per the Zacks analyst, Hess' strategic foothold in Bakken shale, boasting premium untapped drilling sites, alongside its stable fee-based revenue streams, ensures stability and growth.

Phibro (PAHC) Banks on Solid Vaccine Sales, Positive Outlook
Per the Zacks Analyst, Phibro's Animal Health arm is poised for growth with robust vaccine sales, especially in South America. Optimism for Mineral Nutrition and Performance Products also bodes well.

New Downgrades

Repositioning Strategy & High Investments to Ail Thor (THO)
The Zacks analyst is worried about Thor's repositioning strategy, which might hurt its North American Towable gross profit margin. Heavy investments in automation and innovation also raise concerns.

Weakness in Specialty Products, High Costs Ail TriMas (TRS)
The Zacks analyst is concerned that the ongoing weak results of the Specialty Products segment reflecting weak industrial cylinder demand and higher costs will continue to hurt TriMas' results.

Lower IT Spending to Hurt Atlassian's (TEAM) Prospects
Per the Zacks Analyst, Atlassian's growth prospects might be hurt by soft IT spending as organizations are pushing back their large IT investment plans amid macroeconomic headwinds.

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

CocaCola Company (The) (KO) : Free Stock Analysis Report

Hess Corporation (HES) : Free Stock Analysis Report

The Progressive Corporation (PGR) : Free Stock Analysis Report

Canadian Natural Resources Limited (CNQ) : Free Stock Analysis Report

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

Elevance Health, Inc. (ELV) : Free Stock Analysis Report

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Zacks Investment Research