Tuesday, October 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 JPMorgan Chase & Co. (JPM), Medtronic plc (MDT) and Shopify Inc. (SHOP), as well as a micro-cap stock Perma-Pipe International Holdings, Inc. (PPIH). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.
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 >>>
Shares of JPMorgan Chase have outperformed the Zacks Banks - Major Regional industry over the year-to-date period (+26.9% vs. +22.9%). Relatively high interest rates, strategic buyouts, opening branches and solid loan balance will support net interest income (NII), though elevated funding costs will weigh on it.
According to the Zacks analyst estimates for NII (managed) and loans imply a CAGR of 1% and 4.7%, respectively, by 2026. While there has been a resurgence in deal-making activities, a complete revival will still take some time. Hence, the performance of the IB business is not expected to improve much.
The volatile nature of the capital markets business and high mortgage rates will likely hurt fee income growth. Owing to these challenges, we expect non-interest income (managed) to rise in 2024 but decline next year. Mounting operating expenses will hamper the bottom line. We expect total non-interest expenses to rise 5.9% in 2024.
(You can read the full research report on JPMorgan Chase here >>>)
Medtronic’s shares have gained +8.3% over the year-to-date period against the Zacks Medical - Products industry’s gain of +12.0%. The company is strategically expanding its global presence to address the unmet demand for advanced medical devices. Within Cardiovascular, Medtronic is gaining market share, banking on product launches in CRM and Structural Heart.
Hypertension has brought up multibillion-dollar opportunities for MDT. In MedSurg, Medtronic is scaling the production of Hugo RAS. The Surgical and Neuroscience portfolios continues to contribute positively.
Further, the company’s Pacing business continued to drive strong growth banking on strong global growth of its Micra leadless pacemaker. Innovations and market expansion efforts are helping it offset the impact of the inflation and supply disruptions.Medtronic’s strong liquidity position should allow it to meet its near-term debt obligations. All these factors support our bullish stance on the stock.
(You can read the full research report on Medtronic here >>>)
Shares of Shopify have gained +3.8% over the year-to-date period against the Zacks Internet - Services industry’s gain of +15.7%. The company is benefiting from strong growth in its merchant base. New merchant-friendly tools like Bill Pay, Tax Platform, Collective and the Marketplace Connect app are helping it to win new merchants regularly.
Strong adoption of these solutions holds promise for Shopify’s prospects. Integration of Shop Pay Installments into the point-of-sale terminal and general availability of Pro makes it easier for merchants to discover and engage their customers. Expansion of back-office merchant solutions to more countries is also strengthening Shopify’s international footprint.
An expanding partner base that includes TikTok, Snap, Pinterest, Criteo, IBM, Cognizant, Amazon, and Adayen are expected to expand its merchant base further. However, persistent inflation and cautious consumer spending are headwinds.
(You can read the full research report on Shopify here >>>)
Perma-Pipe International’s shares have outperformed the Zacks Steel - Pipe and Tube industry over the year-to-date period (+67.7% vs. +5.2%). This microcap company with market capitalization of $106.18 million has demonstrated solid financial growth in 2024, with net sales rising 11% to $71.8 million and gross profit up to $24 million, supported by increased volumes and a favorable product mix.
The company’s backlog signals strong future revenue potential. Strategic expansions position it to capitalize on high-growth sectors like oil & gas and petrochemicals. Technological innovation, particularly the XTRU-THERM insulation system, provides a competitive edge, securing contracts in key markets. Financially, Perma-Pipe's improved cash reserves and liquidity position it well for future growth, though rising debt and high interest costs pose challenges.
However, project delays in the Middle East, foreign currency risks and geographic exposure to volatile regions could impact profitability. Heavy reliance on the oil and gas sector also creates revenue concentration risks.
(You can read the full research report on Perma-Pipe International here >>>)
Other noteworthy reports we are featuring today include Mondelez International, Inc. (MDLZ), Westport Fuel Systems Inc. (WPRT) and FedEx Corp. (FDX).
Mark Vickery
Senior Editor
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
Buyouts, Rates & Loans Aid JPMorgan (JPM), Fee Income Ails
Neuromodulation Arm, New Growth Areas Boost Medtronic (MDT)
Product Rollouts & Growing Merchant Base Aid Shopify (SHOP)
Featured Reports
Mondelez (MDLZ) Gains on Solid Chocolate & Biscuit Categories
Per the Zacks analyst, Mondelez gains on core chocolate and biscuit categories, as they show resilience amid challenges. The company aims to derive most of its revenues from these categories by 2030.
Rising Investment Aids Westport (WPRT), Production Delay Ails
Per the Zacks analyst, increased support and investments in alternative fuel from the government bodes well for Westport's prospects. Production delay in China remains a concern.
FedEx's (FDX) Dividend Payouts Aid Amid Shipping Volume Woes
The Zacks analyst is impressed with the company's efforts to reward its shareholders. FDX's cost-cut initiatives support the bottom line. However, shipping volume-related weakness is a major concern.
Rising Natural Gas Demand Aids Williams Companies (WMB)
The Zacks analyst believes that Williams Companies' extensive network of U.S. natural gas pipelines will gain from favorable industry dynamics but is worried over its high debt burden.
Strong Renewal Rate Change, Retention Aid Travelers (TRV)
Per the Zacks analyst, Travelers is set to gain from continued strong renewal rate change and retention and increase in new business. Yet, exposure to cat loss inducing underwriting volatility ails.
Strategic Investments Aid Vail Resorts (MTN), Visitation Low
Per the Zacks analyst, Vail Resorts' focus on infrastructure investments and Resource Efficiency Transformation Plan bode well. However, low visitation and weather-related disruptions is a concern.
Order Trends, Pricing to Aid Apogee (APOG) Amid High Costs
Per the Zacks analyst, improving orders at its Architectural Services segment and pricing actions will drive Apogee's top-line. However, high costs and supply chain challenges remain woes.
New Upgrades
Itron (ITRI) Gains from Increasing Smart Water Meter Sales
Per the Zacks analyst, higher demand for smart water meters aided Itron's top-line expansion. New project deployments are driving the Networked Solutions segment's revenues.
FormFactor (FORM) Rides on Growing Semiconductor Test Demand
Per the analyst, FormFactor is riding on its growing footprint in the semiconductor test and measurement sector.
Firdapse & Fycompa Sales Boost Catalyst (CPRX) Amid Competition
Per the Zacks analyst, increasing demand for Firdapse and Fycompa is likely to fuel strong growth for catalyst in the quarters ahead. Agamree sales are also contributing to the topline.
New Downgrades
Strict Regulations, Competition Ail National Fuel Gas (NFG)
Per the Zacks analyst, National Fuel Gas' performance can be negatively impacted due to strong competition in the natural gas industry. Stringent regulations trouble its business operations.
Altice (ATUS) Plagued by Soft Demand, Fierce Competition
Per the Zacks Analyst, sluggish demand trends in the Residential, News and Advertising segments will likely affect Altice's top line. Intensifying competition remains a concern.
Rising Costs & Expenses Hurt Jacobs' (J) Performance
Per the Zacks analyst, Jacobs' business is being hurt by an increase in direct costs due to ongoing inflationary pressures related to labor and materials. Also, currency woes are an added concern.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.7% per year. So be sure to give these hand picked 7 your immediate attention.
JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
Medtronic PLC (MDT) : Free Stock Analysis Report
FedEx Corporation (FDX) : Free Stock Analysis Report
Westport Fuel Systems Inc. (WPRT) : Free Stock Analysis Report
Mondelez International, Inc. (MDLZ) : Free Stock Analysis Report
Shopify Inc. (SHOP) : Free Stock Analysis Report
Perma-Pipe International Holdings, Inc. (PPIH): 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.
