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Top Research Reports for SAP, Verizon Communications & Lowe's

Monday, April 8, 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 SAP SE (SAP), Verizon Communications Inc. (VZ) and Lowe's Companies, Inc. (LOW). 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 >>>

SAP shares have outperformed the Zacks Computer - Software industry over the past year (+52.3% vs. +44.1%). The company’s performance is benefiting from continued strength in its cloud business, especially the Rise with SAP and Grow with SAP solutions. Momentum in SAP’s business technology platform, particularly the S/4HANA solution, along with proliferation of generative AI bodes well.

SAP is now focusing more on vital strategic growth areas, especially Business AI, and position the company for future growth. Management also reaffirmed its 2025 long-term targets for cloud and total revenues. Frequent product launches, and strategic acquisitions and collaborations are other tailwinds.

However, continued softness in the Software license and support business segment coupled with global macroeconomic weakness are concerning. Increasing costs and stiff competition are additional headwinds.

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

Shares of Verizon Communications have outperformed the Zacks Wireless National industry over the past year (+13.2% vs. +5.3%). The company is witnessing significant 5G adoption and fixed wireless broadband momentum with its 5G Ultra Wideband network. The deployment of a cloud-native, container-based, virtualized architecture has led to increased flexibility, scalability and cost efficiency across its network.

Verizon is offering various mix and match pricing in both wireless and home broadband plans, which has led to solid client additions. Focus on emerging growth services like cloud, security and professional services will likely reap long-term benefits.

However, lower wireline and wireless equipment revenues are major concerns. Huge promotional expenses and lucrative discounts to expand customer base are weighing on margins. High capital expenditures for network upgrade and deployment of fiber assets across the country are headwinds. A muted guidance for 2024 is worrisome.

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

Lowe's shares have modestly outperformed the Zacks Building Products - Retail industry over the year-to-date period (+8.1% vs. +6.8%). The company has implemented a comprehensive Pro-focused strategy, emphasizing improved product availability, timely delivery, and an expanded assortment, complemented by a rewards program.

Strategic growth initiatives such as store expansion and enhanced customer experiences aim to position the company as a top omnichannel retailer. Investments in service offerings, operational efficiency, and long-term drivers like sustained home improvement demand support growth and profitability.

However, market risks, intense competition, and a decline in DIY spending present challenges. Anticipated softness in comparable sales, margin pressure, and financial strain due to high debt and low cash reserves may hinder performance.

(You can read the full research report on Lowe’s here >>>)

Other noteworthy reports we are featuring today include Uber Technologies, Inc. (UBER), Citigroup Inc. (C) and Airbnb, Inc. (ABNB).

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

Solid Momentum in Cloud Business Driving SAP's Performance

Verizon (VZ) Rides on Cloud-Native Network, 5G Traction


Lowe's (LOW) Pro Customer Strategy May Help Lift Sales

Featured Reports

Citigroup's (C) Organizational Overhaul Aids Amid High Costs
Per Zacks analysts, Citigroup's organisational restructure and streamlining international operations offers support. Yet, rise in expenses and decline in non-interest income are major concerns.

Airbnb (ABNB) Banks on Strong Nights & Experiences Bookings
Per the Zacks analyst, strengthening gross nights booked in high-density urban areas, and recovery in both long-distance and cross-border travel are benefiting Airbnb's Nights & Experience bookings.

Ford's (F) Pro Business Unit to be a Key Growth Driver
Per the Zacks analyst, Ford's commercial arm, Ford Pro, will drive profits in 2024 on strong mix/volume. The unit's pretax profit is forecast to rise 18.5% year over year at the midpoint of the view.

Investments, Expanding Customer Base Aid Atmos Energy (ATO)
Per the Zacks analyst, Atmos Energy's investment plan will help to increase the safety and reliability of its natural gas pipelines. Increasing customer count will boost demand for its services.

Kimco (KIM) to Ride on Strong Retail Demand, High Rates Ail
Per the Zacks Analyst, Kimco's focus on grocery-anchored centers, mixed-use assets and a solid balance sheet augur well. However, surging e-commerce adoption and high interest rates are concerns.

Growth Plans Aid PENN Entertainment (PENN), Economic Woes Ail
Per the Zacks analyst, PENN Entertainment is aiding from omni-channel strength and strategic growth initiatives including technological and marketing investments. Yet, economic challenges hurt.

Myriad Genetics (MYGN) Wins New Strategic Deals amid FX Ails
Per the Zacks analyst, Myriad Genetics is likely to gain from its strategic deals and grant of patents for its products. However, impact of foreign exchange fluctuations remains a matter of concern.

New Upgrades

Uber (UBER) Benefits From Strong Delivery & Mobility Units
The Zacks analyst is impressed with Uber's robust delivery business as online order volumes are impressive. Recovery in the Mobility business is encouraging as well.

Rising Admissions Aid HCA Healthcare (HCA), High Costs Hurt
Per the Zacks analyst, HCA Healthcare's strategic acquisitions and rising admissions should continue to aid the top line in the future. However, escalating expenses remain a concern for the company.

SM Energy's (SM) Permian Basin & Eagle Ford Presence Aids
Per the Zacks analyst, SM Energy's increased emphasis on crude oil in the Permian Basin is set to amplify its operations. Enhanced production and favorable prices should support its free cash flow.

New Downgrades

Humana (HUM) Suffers From an Elevated Benefits Expense Level
Per the Zacks analyst, a rise in benefits cost is likely to dent Humana's margins. Fall in Medicare stand-alone prescription drug plan membership may put pressure on the Medicare business growth.

Exelixis' (EXEL) Cabometyx Strong Amid Stiff Competition
Per the Zacks analyst, lead drug Cabometyx maintains momentum with continued label expansions and the pipeline development is encouraging. However, competition is stiff.

Logitech (LOGI) Rides on Remote Working Tool Demand
Per the Zacks analyst, Logitech is benefiting from the increased demand for products that aid remote working and operation continuity plans amid the growing hybrid working trend.

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

Citigroup Inc. (C) : Free Stock Analysis Report

Verizon Communications Inc. (VZ) : Free Stock Analysis Report

Lowe's Companies, Inc. (LOW) : Free Stock Analysis Report

SAP SE (SAP) : Free Stock Analysis Report

Uber Technologies, Inc. (UBER) : Free Stock Analysis Report

Airbnb, Inc. (ABNB) : Free Stock Analysis Report

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Zacks Investment Research