Yahoo Finance Top Stock Reports for Microsoft, BP & Zoetis
Friday, May 12, 2023
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 Microsoft Corporation (MSFT), BP p.l.c. (BP) and Zoetis Inc. (ZTS). 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 >>>
Microsoft shares largely tracked the Zacks Tech sector this year, but the stock hasn't looked back since the very strong Q1 earnings release on April 25th. As a result, Microsoft share now up +28.4% this year vs. +22% for the Zacks Tech sector and the +8.6% gain for the S&P 500 index.
The company is benefitting from strong Intelligent Cloud and Productivity and Business Processes revenues. Intelligent Cloud revenues were driven by growth in Azure and other cloud services. Productivity and Business Processes revenues increased due to strong adoption of Office 365 Commercial solutions. Microsoft is also seen as having a better offering on the artificial intelligence (AI) front than rival Alphabet.
Continued momentum in the small and medium businesses and frontline worker offerings, as well as gain in revenue per user drove top-line growth. However, More Personal Computing revenues decreased due to weak Windows and Devices businesses.
Steady performance in Talent Solutions aided LinkedIn revenues. However, declining gaming revenues has been a headwind. Increasing spend on Azure enhancements amid stiff competition in the cloud space remains a concern.
(You can read the full research report on Microsoft here >>>)
Shares of BP have outperformed the Zacks Oil and Gas - Integrated - International industry over the past year (+24.4% vs. +10.2%). The company has a strong portfolio of upstream projects, backing impressive production growth. The company boasted that the target of adding a net production of 900 thousand barrels of oil equivalent per day by 2021 from key projects was met successfully.
BP expects $2-$3 billion of divestment and other proceeds in 2023. Before reporting its June-quarter results, the integrated energy major is willing to complete an additional $1.75 billion in share buy-backs. Also, BP reported better-than-expected first-quarter earnings resulting from an increase in oil-equivalent production volumes.
However, the energy giant’s balance sheet is considerably more levered than most peers, limiting its financial flexibility. Also, increasing exploration expenses have been affecting the company’s income. As such, the stock warrants a cautious stance.
(You can read the full research report on BP here >>>)
Zoetis shares have outperformed the Zacks Medical - Drugs industry over the past year (+12.9% vs. -1.8%). The company’s innovative portfolio of pet care parasiticides, including Simparica Trio and key dermatology products maintain momentum for the company.
The strong uptake of Librela and Solensia in Europe, its new monoclonal antibody therapies for osteoarthritis pain in dogs and cats, is encouraging. The launch of innovative products bolstered the portfolio and should fuel growth.
However, Zoetis had earlier faced supply challenges which impacted demand. Although the constraints have eased out, a similar situation will impact growth. Stiff competition from animal health business wings of Merck and Bayer remains a woe.
(You can read the full research report on Zoetis here >>>)
Other noteworthy reports we are featuring today include ServiceNow, Inc. (NOW), Lululemon Athletica Inc. (LULU) and Weyerhaeuser Company (WY).
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
Adoption of Cloud & Office 365 Strength Aid Microsoft (MSFT)
BP Likely to Benefit From Lightsource BP JV Acquisition
Zoetis (ZTS) Strong Animal Product Portfolio Fuels Growth
Featured Reports
lululemon (LULU) Tracks Well with E-commerce Expansion Plans
Per the Zacks analyst, lululemon is heavily investing in e-commerce capabilities like developing sites, transactional omni functionality and fulfilment options to capture the growing online demand.
Strategic Initiatives Aid Weyerhaeuser (WY) Amid Soft Demand
Per the Zacks analyst, operational excellence, consistent dividend payout and export demand aid Weyerhaeuser. However, soft housing demand, supply chain risks and dynamic market conditions hurt.
Investments, Clean Generation Focus Aid PPL Corporation (PPL)
Per the Zacks analyst, PPL's investment of $12 billion through 2026, will strengthen its infrastructure. Its Narragansett Electric acquisition will help toward a cleaner energy future and boost margin
Oncotype Dx Test Aid Exact Sciences (EXAS), Rising Costs Ail
The Zacks analyst is impressed with Exact Sciences' Oncotype DX Breast test witnessing greater market adoption by diagnosing early-stage breast cancer. Escalating operating costs remain a concern.
Solid User Growth & Premium Content Demand Aids Snap (SNAP)
Per the Zacks analyst, Snap benefits from an improving user growth driven by strong adoption of Augmented Reality (AR) Lenses and demand for premium Discover content and Shows.
Strength in Industrial Segment Aids Graco (GGG), Costs Hurt
Per the Zacks analyst, solid traction of Graco's Industrial segment, led by robust product portfolio of adhesive equipment should drive its growth. However, high operating costs remain concerning.
CNA Financial (CNA) Banks on Solid Premiums Amid High Costs
Per the Zacks analyst, CNA Financial is set to grow on solid Specialty, Commercial and International segment, which will drive improvement in net premiums. However, high costs remain a concern.
New Upgrades
Growing Customer Base & Partnerships Aid ServiceNow (NOW)
Per the Zacks analyst, ServiceNow benefits from rising adoption of its workflows from companies undergoing digital transformation. Also, strategic alliances with the likes of Microsoft are a tailwind.
Solid Demand & Brand Strength Drives Crocs' (CROX) Top Line
Per the Zacks analyst, Crocs has been gaining from solid consumer demand, as well as strength in the Crocs and HEYDUDE brands. This led to significant revenue growth of 34% in Q1.
Copa Holdings (CPA) Benefits From Rosy Passenger Traffic
Upbeat air-travel demand is driving Copa Holdings' top line. The Zacks analyst also finds the company's fleet-modernization initiatives encouraging.
New Downgrades
High Commodity & Operating Costs to Limit NIO's Profits
The Zacks analyst remains concerned about the high prices of raw materials and rising R&D and SG&A costs, which are putting pressure on NIO's earnings and cash flows.
U.S. Cellular (USM) Plagued by Stiff Competition, Margin Woes
Per the Zacks analyst, U.S. Cellular is likely to be plagued by high costs related to network integration and construction of cell sites, while aggressive pricing by larger rivals hurt its margins.
Higher Expenses, Poor Asset Quality Hurt BankUnited (BKU)
Per the Zacks analyst, an increase in operating expenses and a rise in provisions on a deteriorating operating backdrop are the headwinds for BankUnited. Higher exposure to risky loans is a woe too.
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Microsoft Corporation (MSFT) : Free Stock Analysis Report
BP p.l.c. (BP) : Free Stock Analysis Report
Weyerhaeuser Company (WY) : Free Stock Analysis Report
lululemon athletica inc. (LULU) : Free Stock Analysis Report
Zoetis Inc. (ZTS) : Free Stock Analysis Report
ServiceNow, Inc. (NOW) : Free Stock Analysis Report
