Friday, December 15, 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 JPMorgan Chase & Co. (JPM), Abbott Laboratories (ABT) and Qualcomm Inc. (QCOM). 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 have outperformed the Zacks Banks - Major Regional industry over the past year (+29.8% vs. +17.7%). High interest rates, buyouts, global expansion efforts and decent loan demand will aid net interest income (NII), though rising funding costs will weigh on it.
According to the Zacks analyst estimates for NII (managed) and loans imply a CAGR of 9.8% and 7.2%, respectively, by 2025. Aided by solid earnings strength and balance sheet, it will be able to sustain capital distributions. Despite visibility of some greenshoots in the investment banking (IB) business, IB fees are less likely to improve soon.
This, along with the volatile nature of the capital markets business and high mortgage rates, will likely hamper fee income growth. Owing to these challenges, we expect total non-interest income (managed) to witness a CAGR of just 3.6% by 2025. Mounting costs are a woe and we expect it to rise 11% in 2023.
(You can read the full research report on JPMorgan here >>>)
Abbott shares have outperformed the Zacks Medical - Products industry over the past year (+2.1% vs. -0.1%). The company is strategically expanding its global presence to address the unmet demand for advanced medical technologies. Within the EPD business, which is solely based in emerging markets, the Zacks analyst expects Abbott to register a sales CAGR of nearly 6% through fiscal 2025.
Within Core Diagnostics, Abbott is gaining market share following the end of the public health emergency, particularly in the United States and Europe region. Within Diabetes Care, Abbott is scaling up the production of Libre and gaining reimbursement approval in several countries. Innovations and market expansion efforts are helping it offset the impact of inflation and supply disruptions.
However, a steep year-over-year decline in COVID testing-related sales hurt growth. Further, the decision to exit the pediatric nutrition business in China continue to impede overall growth in Nutrition.
(You can read the full research report on Abbott here >>>)
Shares of Qualcomm have outperformed the Zacks Wireless Equipment industry over the past year (+24.6% vs. +9.2%). The company is well poised to benefit from solid 5G traction, greater visibility and a diversified revenue stream. Strength in the snapdragon portfolio is an additional tailwind as exemplified by the multi-year.
Apple deal for 5G modems for iPhones. It is focusing on a seamless transition from a wireless communications firm for the mobile industry to a connected processor firm for the intelligent edge. Qualcomm is also witnessing solid momentum in IoT.
However, it reported relatively soft fourth-quarter fiscal 2023 results owing to a challenging macroeconomic environment, inflationary pressures and soft recovery in China, resulting in lower-than-expected demand and elevated inventory levels.
Weakness in the smartphone industry and cautious client approach are weighing on margins. Rising geopolitical conflicts and high debt burden remain headwinds.
(You can read the full research report on QUALCOMM here >>>)
Other noteworthy reports we are featuring today include Johnson & Johnson (JNJ), Fomento Económico Mexicano, S.A.B. de C.V. (FMX) and BHP Group Ltd. (BHP).
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
J&J's (JNJ) Innovative Medicine & MedTech Units Drive Growth
J&J's Innovative Medicine sales are being driven by existing key drugs and new products. Per the Zacks analyst, the MedTech unit is showing improving trends due to recovery in surgical procedures.
Investments to Drive BHP Group (BHP) Amid Price Volatility
The Zacks analyst believes BHP's strong cash flow, focus on lowering debt, investment in growth projects and operational efficiency will aid growth despite decline in iron ore prices so far this year.
MetLife's (MET) Cost-Cut Efforts & Strategic Buyouts Aid
Per the Zacks analyst, MetLife's cost-control measures are driving margins, while acquisitions are expanding its portfolio. However, volatile variable investment income is concerning.
Hess (HES) Banks On Oil-Rich Offshore Guyana Resources
Hess achieves numerous world-class oil findings in the Stabroek Block, securing a strong production outlook. However, increasing operating costs concern the Zacks analyst.
IQVIA Benefits From Global IT Infrastructure, Liquidity Low
Per the Zacks Analyst, IQVIA's strong healthcare-specific global IT infrastructure places it firmly in the life sciences space. Low liquidity remains a concern.
Investments & Growing Regulated Base Aid FirstEnergy (FE)
Per the Zacks analyst, FirstEnergy's investment of $12 billion through 2025, will strengthen its existing operations. Energizing the Future program will boost its regulated transmission capabilities.
Robust Sports Betting & Expansion Efforts Aid MGM Resorts (MGM)
Per the Zacks analyst, MGM Resorts is likely to benefit from international expansion and sports betting. Also, its focus on asset light strategy and strategic partnerships bode well.
Investments in Specialized Distribution to Aid FEMSA (FMX)
Per the Zacks analyst, FEMSA has been on track with its strategy of creating a national distribution platform in the United States, through the expansion in the specialized distribution industry.
Casey's (CASY) Gains From Grocery & Prepared Food Businesses
Per the Zacks analyst, solid performance of Casey's Grocery & Prepared Food businesses, fueled by strength in bakery, whole pizza pies and dispensed beverage categories, will lend momentum to it.
SkyWest (SKYW) Rides on Buybacks & Fleet Upgrade Efforts
SkyWest's fleet modernization program is praiseworthy. The Zacks analyst is also impressed by the company's shareholder-friendly approach.
Sluggish Smartphone Market Hurts Skyworks' (SWKS) Prospects
Per Zacks analyst, Skyworks is struggling due a weak smartphone market and stiff competition from the likes of Qorvo.
Subdued IB Business, High Costs Hurt Raymond James (RJF)
Per the Zacks analyst, volatile nature of the investment banking business makes us apprehensive about Raymond James' prospects. Mounting expenses are expected to hurt the company's bottom line.
Rising costs and Stiff Rivalry Impede Envista' (NVST) Growth
The Zacks analyst is worried about Envista facing challenging macroeconomic conditions resulting in a significant escalation in its costs and expenses. Stiff rivalry remains a concern.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.