Top Stock Reports for Coca-Cola, Alibaba & KLA

Wednesday, May 29, 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 The Coca-Cola Company (KO), Alibaba Group Holding Limited (BABA) and KLA Corporation (KLAC), as well as two micro-cap stocks Mobile Infrastructure Corporation (BEEP) and Espey Mfg. & Electronics Corp. (ESP). 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 >>>

Coca-Cola shares have outperformed the Zacks Beverages - Soft drinks industry over the year-to-date period (+5.0% vs. +3.4%). The company continues to witness positive business trends as reflected by its robust surprise history. KO’s sales and earnings beat estimates for the fifth consecutive quarter in first-quarter 2024.

Earnings and sales also improved year over year. Strong revenue growth across most of its operating segments aided by improved price/mix and unit volume growth boosted the results. It is poised to gain from innovations and accelerating digital investments. It provided an upbeat guidance for 2024.

However, KO witnesses inflationary cost pressures, related to higher commodity and material costs, as well as higher marketing investments.

(You can read the full research report on Coca-Cola here >>>)

Shares of Alibaba have gained +2.1% over the year-to-date period against the Zacks Internet - Commerce industry’s gain of +14.7%. The company is benefiting from strong momentum across its international business. Solid combined order growth in AIDC’s retail businesses and strength in AliExpress’ Choice are contributing well.

Growing international commerce wholesale business, thanks to strength in cross-border-related value-added services, is a tailwind. Expanding China's wholesale commerce business remains a major positive. Robust local consumer services and Cainiao logistics services are further driving top-line growth. Strength in Lazada, AliExpress and Trendyol is expected to continue benefiting Alibaba’s international business.

However, rising expenses related to new initiatives are a concern. Macroeconomic uncertainties and unfavorable foreign exchange fluctuations remain risks.

(You can read the full research report on Alibaba here >>>)

KLA’s shares have outperformed the Zacks Electronics - Miscellaneous Products industry over the year-to-date period (+34.1% vs. +17.9%). The company is benefiting from strong performance of the wafer inspection business owing to rising demand for advanced wafer inspection applications in leading-edge technology development.

Growing adoption of KLA’s 8900 series platform for high throughput macro inspection, increased demand in the legacy node and advanced packaging categories made the platform one of the best performing product lines in its optical inspection portfolio in 2023.

Growing investments across multiple nodes, and rising capital intensity in Foundry & Logic are driving the top-line growth. KLA's emphasis on integration of AI into its solutions has driven its outperformance in the semiconductor market.

However, weakness in the PCB, Display and Component Inspection remains a headwind. Softness in memory and leading-edge, logic and foundry investments has been a concern.

(You can read the full research report on KLA here >>>)

Shares of Mobile Infrastructure have underperformed the Zacks Real Estate - Operations industry over the year-to-date period (-15.6% vs. -1.2%). This microcap company with market capitalization of $105.06 million is facing high debt levels, thus interest rate sensitivity poses a major risk. Limited revenue diversification, intense competition, seasonal variability, regulatory risks and work-from-home trends persist.

Nevertheless, Mobile Infrastructure owns a diverse portfolio of 42 parking assets in 21 major U.S. markets, ensuring steady demand and stable revenue streams. The portfolio, valued at $520 million in 2022, saw an 11.9% increase in net operating income (NOI).

The first quarter of 2024 revenue uptick was driven by organic growth and converting 26 assets to management contracts, improving operating efficiency. Increased utilization across key markets, advanced technology and proprietary analytics enhance pricing and demand. Financially stable with $13.9 million in cash and $192.1 million in debt, the company has a $300 million acquisition pipeline.

(You can read the full research report on Mobile Infrastructure here >>>)

Espey’s shares have outperformed the Zacks Electronics - Military industry over the year-to-date period (+14.6% vs. +7.7%). This microcap company with market capitalization of $57.69 million is well positioned in the defense electronics market, Espey benefits from increasing demand for advanced systems. Its vertical integration allows high-quality production and flexibility.

Innovation is driven by a $7.4 million U.S. Navy award for facility upgrades. However, competitive pressures, dependence on government contracts, declining net sales and stringent regulatory requirements pose potential risks.

(You can read the full research report on Espey here >>>)

Other noteworthy reports we are featuring today include Aon plc (AON), Republic Services, Inc. (RSG) and Enphase Energy, Inc. (ENPH).

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

Coca-Cola's (KO) Digital Investments to Aid the Top Line

Strength in International Business Benefits Alibaba (BABA)

KLA (KLAC) Rides on Strong Wafer Inspection Business

Featured Reports

Aon's (AON) New Business Growth Aids, High Costs Hurt
Per the Zacks analyst, new business generation, strong retention and several acquisitions help AON enhance its capabilities, which, is boosting its profits. However, rising costs is a concern.

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.

Innovations Aid Enphase (ENPH), Slow Demand in US Pose Risk
Per the Zacks analyst, Enphase frequently launches newer versions of microinverters to expand its market share. Yet slower demand environment in the United States pose a risk for this stock's growth

New Product Sales Aid UFP Industries (UFPI) Amid High Costs
Per the Zacks analyst, UFP Industries benefits from accretive acquisitions and increased new product sales. However, high expenses and rapid lumber market swings are a concern.

High-Quality Eagle Ford Acreage to Aid Magnolia (MGY)
The Zacks analyst believes that Magnolia Oil and Gas' high-quality acreage in the Eagle Ford provides it with attractive economics but is worried over lack of commodity price hedging.

Portfolio Rationalization, Cost Cuts Buoy US Cellular (USM)
Per the Zacks analyst, US Cellular is likely to benefit from various cost-optimization initiatives to improve liquidity and reduce debt burden while rationalizing its portfolio for holistic growth.

Intellia (NTLA) Banks on Genome Editing Pipeline Amid Rivalry
Per the Zacks analyst, Intellia's lead genome-editing candidate, NTLA-2001 being developed to treat transthyretin (ATTR) amyloidosis, holds promise. Stiff competition in the target market is a concern

New Upgrades

Applied Industrial (AIT) Benefits From Strong Service Centre Segment
Per the Zacks analyst, Applied Industrial's Service Center segment is driven by an increase in demand for technical MRO support and fluid power MRO across the U.S. manufacturing sector.

Solid Backlog & Strategic Acquisitions to Aid Oshkosh (OSK)
The Zacks analyst is optimistic about Oshkosh's strong consolidated backlog that provides enough visibility for the coming years. Acquisitions of JBT's AeroTech business and Hinowa also bode well.

Lantheus (LNTH) Benefits from Radiopharmaceutical Leadership
Per the Zacks analyst, LNTH is likely to gain from its leadership in Radiopharmaceutical segment. Potential pipeline development and a decent solvency position to act as an added advantage.

New Downgrades

Volatile Iron Ore Prices, High Costs to Hurt Vale (VALE)
Per the Zacks analyst, iron ore prices will be weighed down by subdued steel demand in China, hurting Vale's top-line results. High input and freight costs will further pressure margins.

Weak Industrial & Medical Markets Hurt Advanced Energy (AEIS)
Per the Zacks Analyst, Advanced Energy is suffering from weakness in Industrial & Medical, Data Center Computing and Telecom & Networking end-markets.

LendingTree (TREE) Hurt by High Debt & Weak Liquidity Level
Per the Zacks analyst, high debt levels, limited cash position and subdued performance of the Insurance segment are likely to hurt LendingTree. A lower chance of share buyback sustainability is a woe.

5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

CocaCola Company (The) (KO) : Free Stock Analysis Report

KLA Corporation (KLAC) : Free Stock Analysis Report

Republic Services, Inc. (RSG) : Free Stock Analysis Report

Aon plc (AON) : Free Stock Analysis Report

Espey Mfg. & Electronics Corp. (ESP) : Free Stock Analysis Report

Enphase Energy, Inc. (ENPH) : Free Stock Analysis Report

Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report

Mobile Infrastructure Corporation (BEEP): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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