Monday, March 15, 2021
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 (MSFT), Caterpillar (CAT) and Target (TGT). 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 have outperformed the S&P 500 over the past year (+72.2% vs. +67.5%), though the stock has been laggard lately along with other large-cap Tech stocks. The Zacks analyst believes that Microsoft is benefiting from strong momentum in Azure, impressive Teams user growth, work-from-home, online learning wave and tele healthcare trends.
Solid uptake of new Xbox gaming consoles and Xbox Game Pass drove the top-line growth. Further, the company is gaining from growing user base of its different applications including Microsoft 365 suite, and Dynamics.
However, delays in consulting business are anticipated to limit growth. Increased spending on Azure enhancements amid stiff competition from Amazon Web Services, is likely to impede margin expansion.
(You can read the full research report on Microsoft here >>>)
Shares of Caterpillar have gained +50.1% in the last six months against the Zacks Construction and Mining industry’s gain of +53.3%. The Zacks analyst believes that Caterpillar is likely to gain from cost control efforts and proactively managing production.
Overall in 2021, Caterpillar’s results are expected to improve, aided by strong demand in China, pickup in manufacturing activity, strength in residential construction in the United States, strong construction demand in Brazil as well as better mining fundamentals.
However, heavy construction and quarry and aggregate markets remain uncertain. Nevertheless, a robust liquidity position, investments in expanded offerings, and services and digital initiatives will fuel growth.
(You can read the full research report on Caterpillar here >>>)
Target shares have gained +5.1% over the past three months against the Zacks Discount Stores industry’s loss of -1.9%. The Zacks analyst believes that Target’s initiatives, including the development of omni-channel capacities, diversification and localization of assortments along with emphasis on flexible format stores, bode well.
It has been deploying resources to enhance omni-channel capabilities, come up with new brands, refurbish stores and expand same-day delivery options to provide seamless shopping experience.
The company has been making multiple changes to its business model to adapt and stay relevant in the ever-evolving retail landscape. Target’s stronger-than-anticipated fourth-quarter fiscal 2020 performance is the testimony of the same, wherein both the top and the bottom lines improved year over year. The company gained market share in all the five core merchandise categories.
(You can read the full research report on Target here >>>)
Other noteworthy reports we are featuring today include Square (SQ), Cigna (CI) and Freeport-McMoRan (FCX).
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Sheraz Mian
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
Microsoft (MSFT) Rides on Adoption of Azure & Teams App
Cost Cuts Aid Caterpillar (CAT) Amid Weakness in Few Markets
Target's (TGT) Omnichannel & Store Expansion to Boost Sales
Featured Reports
Square (SQ) Banks on Solid Cash App Adoption, Bitcoin Growth
Per the Zacks analyst, Square is benefiting from strong Cash App engagement and its growing active customer base.
Buyout, Divestiture, Solid Balance Sheet Aid Cigna (CI)
Per the Zacks analyst, the buyout of Express Scripts and the sale of Group Life and Disability insurance unit streamline the company's business.
Exploration Progress, Debt Reduction to Aid Freeport (FCX)
Per the Zacks analyst, Freeport should gain from its progress in exploration activities to expand production capacity and efforts to deleverage balance sheet.
Strategic Initiatives Benefit Aon (AON), Rising Debts Hurt
Per the Zacks analyst, buyouts and collaborations have enhanced the company's capabilities, which in turn, has led to bottom-line growth.
Eylea, Dupixent Fuel Regeneron (REGN), Competition Worrisome
Per the Zacks analyst, label expansions of key drugs like Eylea and Dupixent boost Regeneron. Its efforts to develop antibody for COVID-19 is encouraging.
Solid Assets Growth Aid BNY Mellon (BK) Amid Lower Rates
Per the Zacks analyst, solid assets under management growth, global diversification efforts and manageable expense levels aid BNY Mellon.
U.S. Pharmaceutical Arm Aids McKesson (MCK), High Costs Ail
Per the Zacks analyst, solid prospects in the core U.S. Pharmaceutical and Specialty Solutions unit, fueled by market growth, continue to aid McKesson.
New Upgrades
ConocoPhillips (COP) Banks on Oil-Rich Eagle Ford Shale Play
The Zacks analyst believes that significant opportunities await ConocoPhillips in the Eagle Ford shale play, where the firm owns premium undrilled locations.
Callon Petroleum (CPE) to Rise on Prolific Permian Footprint
The Zacks analyst expects Callon Petroleum to generate incremental cash flows from the growing Permian Basin assets. Moreover, decreasing lease operating expenses will likely boost profits.
ABM Industries (ABM) Rides on 2020 Vision, Acquisitions
The Zacks analyst believes that systematic and strategic plans of action under 2020 Vision are likely to drive long-term profitable growth for ABM Industries.
New Downgrades
Travelers' (TRV) Auto & Homeowners Aids, Cat Loss Hurts
Per the Zacks analyst, persistent progress and strong market of the auto and homeowners businesses contribute to revenue growth of the company.
Elevated Leverage & Chip Deficit to Ail Adient (ADNT)
Production and supply chain distortions amid the global chip shortage are likely to hurt Adient's near-term profit. The Zacks analyst is also worried of the firm's high debt-to-capitalization of 71%.
Lower Backlog Level & New Awards to Impact Fluor (FLR)
Per the Zacks analyst, the pandemic continues to impact the business as clients are deferring capital investment decisions as is evident from lower backlog level and a drop in new awards for 2020.
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Target Corporation (TGT): Free Stock Analysis Report
Square, Inc. (SQ): Free Stock Analysis Report
Microsoft Corporation (MSFT): Get Free Report
FreeportMcMoRan Inc. (FCX): Get Free Report
Cigna Corporation (CI): Free Stock Analysis Report
Caterpillar Inc. (CAT): Get Free 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.
