Thursday, June 8, 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 The Procter & Gamble Company (PG), Bank of America Corporation (BAC) and Abbott Laboratories (ABT). 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 >>>
Procter & Gamble shares have modestly lagged the Zacks Consumer Staples sector (-3.6% vs. -2.4%) as well as the broader market (-3.6% vs. +12.2% for the S&P 500 index) this year. Driving the underperformance is the company's drab guidance in the last quarterly release and expectations of continued margin pressures.
Procter & Gamble’s organic sales grew in the last reported quarter, driven by robust pricing and a favorable mix, along with strength across segments. It has been focused on productivity and cost-saving plans to boost margins. Consequently, it raised the sales view to 1% growth compared with our estimate of a 1.1% rise for fiscal 2023.
(You can read the full research report on Procter & Gamble here >>>)
Bank of America shares have underperformed the Zacks Banks - Major Regional industry over the past six months (-7.7% vs. -2.8%). The company is suffering due to worsening economic backdrop which keep weighing on investment banking (IB) business. This, along with the volatile nature of the capital markets, will hurt non-interest income.
A tough operating backdrop will lead to higher provisions, with we projecting a substantial jump in the metric this year. Inflationary pressure will result in mounting expenses. Our estimate for total non-interest expenses implies a rise of 1.7% this year.
Nevertheless, Higher rates and decent loan demand will aid net interest income (NII). According to the Zacks analyst estimates NII reflect a CAGR of 2.6% by 2025. The opening of new financial centers and improving digital capabilities will bolster the top line.
(You can read the full research report on Bank of America here >>>)
Abbott Laboratories shares have declined -8.5% over the past year against the Zacks Medical - Products industry’s decline of -28.8%. The company’s figures declined on a year-over-year basis. Total sales in the first quarter were negatively impacted by a year-over-year decline in COVID testing-related sales.
However, Organic sales growth excluding COVID testing increased 10%, led by double-digit growth in Medical Devices, EPD and Nutrition. EPD successfully continued with its double-digit sales growth momentum for the last two years.
Medical Device registered strong sales led by double-digit organic growth in Diabetes Care, Structural Heart, Heart Failure and Neuromodulation. The Diabetes Care business continued to benefit from the growing sales of its sensor-based continuous glucose monitoring system, FreeStyle Libre.
(You can read the full research report on Abbott Laboratories here >>>)
Other noteworthy reports we are featuring today include Cisco Systems, Inc. (CSCO), Sony Group Corporation (SONY) and Duke Energy Corporation (DUK).
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
P&G's (PG) Productivity & Cost Savings Plan to Aid Margins
Higher Rates, Loans Support BofA (BAC) Amid Fee Income Woes
Organic Sales Gain, Growing EPD Business Aid Abbott (ABT)
Cisco (CSCO) Benefits From Strong Security Products Adoption
Per Zacks analyst, Cisco is benefiting from a rapidly growing security market driven by robust adoption of identity and access, advanced threat and unified threat management security solutions.
SONY Benefits From Improving Music & G&NS Segment Sales
Per the Zacks analyst, Sony is gaining from strong performance of its Music and G&NS segments. However, stiff competition and weak global macroeconomic conditions remain major concerns.
Solid Investments Aid Duke Energy (DUK), Weak Solvency Woes
Per the Zacks analyst, Duke Energy's investment in infrastructure and expansion projects tend to boost its long-term growth prospects. However, its weak solvency position remains a bottleneck.
CNG Vehicles Aid Republic Services (RSG) Amid Low Liquidity
Per the Zacks analyst, Republic Services is focused on increasing its operational efficiency by shifting to compressed natural gas (CNG) collection vehicles. Low liquidity remains a concern.
Cost-Control Efforts & Solid Balance Sheet Aid MetLife (MET)
Per the Zacks analyst, strategic initiatives have enabled MetLife to control costs, which is driving margins. Its strong capital position allows investment for long-term growth.
Solid Comps Growth & Loyalty Program Aid Yum China (YUMC)
Per the Zacks analyst, solid growth in same-store sales backed by menu innovation, unit expansion and digitalization efforts aid Yum China. Also, growth in loyalty programs bode well.
Growth in Galafold Fuels Amicus' (FOLD) Growth
Amicus's Fabry disease drug, Galafold has shown solid uptake since launch. Per the Zacks analyst, successful approval of Pombiliti + Opfolda can strengthen its portfolio further.
Palo Alto (PANW) Rides on Product Strength, Marketing Effort
Per the Zacks analyst, Palo Alto Networks is gaining from solid contributions of its growth-oriented products including Strata, Prisma and Cortex. Increasing marketing efforts are also positive.
Strong Sales Volumes & EV Push Drive Honda (HMC)
Honda is benefiting from robust pent-up demand for vehicles amid improving inventory levels. The Zacks analyst also likes the company's commitment to expanding its electric vehicle lineup.
Urban Outfitters' (URBN) FP Initiative Appears Promising
Per the Zacks analyst, Urban Outfitters' strategic growth initiative, FP Movement, bodes well. The FP Movement offers a major growth opportunity and is expected to boost Free People's brand revenues.
Higher Input & Production Costs Hurt Kronos Worldwide (KRO)
Per the Zacks analyst, higher raw material costs due to disruptions in supply chains will weigh on the company's bottom line. It also faces headwind from increased production costs.
EPAM Systems' (EPAM) Hurt by Weakening Demand Environment
Per the Zacks analyst, EPAM's growth prospects might be hurt by the deteriorating demand environment as organizations are turning more cautious on IT spending amid the ongoing macroeconomic headwinds.
Huge Debt, Rising Costs Hurt DCP Midstream's (DCP) Margins
The Zacks analyst is worried about DCP Midstream's increasing debt load, which can lead to volatile earnings. The partnership's rising operating and maintenance expenses are concerning.
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