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Thursday, May 26, 2022
Zacks Research Daily features top research results from our team of analysts. Today’s Research Daily features new research reports on 16 major stocks, including Tesla, Inc. (TSLA), The Procter & Gamble Company (PG) and Bristol-Myers Squibb Company (BMY). These research reports have been handpicked from the approximately 70 reports published today by our team of analysts.
You can see all today’s research reports here >>>
Shares of You’re here have outperformed the industry Zacks Automotive – Domestic over the past year (+4.4% vs -24.6%) although the stock has been under pressure lately due to market fears that the Buying Elon Musk on Twitter won’t distract him from his day job. That said, despite a severe chip shortage, the company put on an impressive first-quarter show, beating both revenue and profit expectations, thanks to stellar deliveries of the Model 3 and Model Y. Zacks analyst estimates shipments will grow about 50% annualized over the next three years. Excluding government credits, Tesla’s gross margins hit 30% in the first quarter.
This indicates that supply chain issues that hit the business are passed on to the consumer. Additionally, Tesla’s energy generation and storage revenue outlook is promising. However, weak second-quarter deliveries from the Shanghai gigafactory could be a headwind in the short term, we expect Tesla to deliver outsized returns in the long term thanks to the ramp-up in production and the introduction of new models.
(You can read the full Tesla research report here >>>)
Shares of Procter & Gamble have outperformed the Zacks soap and cleaning product industry over the past year (+10.1% vs -2.0%). The company has reported surprising profits for more than three years as its revenue beat estimates for the eighth straight time in the quarter. Results were driven by improved productivity amid cost headwinds, as well as growing demand for cleaning products. Cost productivity gains also contributed to results. Management raised its vision for fiscal 2022. It witnessed the leverage effect of general and administrative expenses, thanks to savings in general and marketing expenses, and cost leverage gains due to the increase in sales and real estate.
However, The Zacks analyst believes that unfavorable mix, raw material cost inflation, increased transportation costs, investment in products and packaging and other impacts hurt margins. He expects rising commodity and freight costs to persist in fiscal 2022.
(You can read the full research report on Procter & Gamble here >>>)
Shares of Bristol Myers Squibb outperformed the industry Zacks Medical – Biomedical and Genetics over the past year (+21.3% vs -37.8%). The company’s performance in the first quarter of 2022 was decent, with earnings and sales beating estimates. New drug approvals add a new revenue stream, which should drive growth in the coming quarters. Pipeline progress has been impressive and strategic collaborations will further expand the portfolio.
Eliquis is the leading oral anticoagulant drug and continues to experience market share growth. The extension of Opdivo’s label to lung cancer, kidney cancer and stomach cancer indications boosted sales. However, one of the main revenue generators, Revlimid, will soon be faced with generics, which will have a negative impact on sales. The company’s lower guidance was also disappointing.
(You can read the full research report on Bristol-Myers Squibb here >>>)
Other noteworthy reports we feature today include Wells Fargo & Company (WFC), American Express Company (AXP) and Intuit Inc. (INTU).
Sheraz Mian
Director of Research
Note: Sheraz Mian leads the equity research department at Zacks and is a well-known expert on overall earnings. He is frequently quoted in the written and electronic press and publishes the weekly Earnings Trends and Revenue overview reports. If you would like to receive an email notification whenever Sheraz publishes a new article, please click here>>>
To read today
Tesla (TSLA) rides on solid deliveries and margins
Strong Demand and Productivity Plan Drives Growth at P&G (PG)
Eliquis, Opdivo Fuel Bristol-Myers (BMY), Revlimid facing the heat
Featured Reports
Cost control helps Wells Fargo (WFC) amid falling revenue
Zacks analyst says Wells Fargo’s cost-cutting measures, such as branch closures and downsizing, will help offset declining revenue trends due to divestitures and volatility in commission income.
Strong earnings and cash flow help American Express (AXP)
According to the Zacks analyst, the rebound in the economic recovery and increased consumer spending should help the top line. Additionally, strong cash flow enabled investments in the business.
Intuit (INTU) benefits from product refresh, higher subscriptions
According to the Zacks analyst, Intuit benefits from frequent product updates, which helps it win customers. In addition, the increase in subscriptions leads to stable revenue growth for the company.
Marsh & McLennan (MMC) Help with strategic takeovers, high expenses
According to the Zacks analyst, a number of acquisitions are helping Marsh & McLennan expand geographically and diversify its portfolio. Yet escalating spending continues to weigh on margins.
New customers will propel TELUS (TU) into a high leverage environment
According to the Zacks analyst, Telus’ growing customer base is increasing its fiber footprint, thereby increasing its revenue. However, the company’s fierce competition and high leverage remain a concern.
Waste Connections (WCN) benefits from acquisitions and debt problems
Waste Connections (WCN) revenue benefited from the favorable impact of acquisition revenues. The Zacks analyst, however, is concerned about his indebted balance sheet.
AmerisourceBergen (ABC) Pharmaceutical Distribution Unit Aids
A robust pharmaceutical distribution business, driven by higher volume and an expanding customer base, continues to help AmerisourceBergen, according to the Zacks analyst. But higher operating expenses are a misfortune.
New upgrades
Suncor (SU) will benefit from a strong liquidity position
The Zacks analyst appreciates Suncor’s strong financial position. The company has debt maturities of just C$1.8 billion in 2021-22 and has over C$4 billion in total liquidity.
Pool Corp (POOL) benefits from capacity building initiatives
According to the Zacks analyst, Pool Corp likely benefited from strong demand, healthy order books and capacity building initiatives. Also, the focus on expansions through acquisitions bodes well.
Whiting (WLL) to benefit from improved well economics
The Zacks analyst appreciates Whiting Petroleum’s improvement in well economics as the company continues to achieve significant reductions in its total depth tie-in time and well cost.
New downgrades
International Exhibition and Former Ail NRG Energy (NRG) Facilities
According to the Zacks analyst, NRG Energy’s international operations expose it to political and economic risks and some of its old facilities create a competitive disadvantage against its peers.
Cost issues and reduced production of Ail Autoliv (ALV) vehicles
The Zacks analyst fears that the reduction in light vehicle production will reduce Autoliv’s sales. Raw material price inflation, increased R&D costs combined with an unfavorable exchange rate can reduce a company’s margins.
Chip woes, high commodity and R&D costs hurt Adient (ADNT)
The Zacks analyst fears that the current chip crisis and high cost inflation could be pain points for Adient, which could squeeze margins. Soaring engineering costs and capital expenditures seek to reduce cash flow.
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Wells Fargo & Company (WFC): Free Inventory Analysis Report
Bristol Myers Squibb Company (BMY): Free Stock Analysis Report
Procter & Gamble Company The (PG): Free Stock Analysis Report
American Express Company (AXP): Free Inventory Analysis Report
Intuit Inc. (INTU): Free Inventory Analysis Report
Tesla, Inc. (TSLA): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
