For Immediate Release
Chicago, IL – October 22, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Visa Inc. V, Netflix, Inc. NFLX, Merck & Co., Inc. MRK and Hovnanian Enterprises, Inc. HOV.
Here are highlights from Monday’s Analyst Blog:
Top Research Reports for Visa, Netflix and Merck
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 Visa Inc., Netflix, Inc. and Merck & Co., Inc., as well as a micro-cap stock Hovnanian Enterprises, Inc. 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 Visa have gained +10.9% over the year-to-date period against the Zacks Financial Transaction Services industry’s gain of +16.1%. The company’s strategic acquisitions and alliances are fostering long-term growth and consistently driving its revenues. Visa, fueled by persistent increases in payments, cross-border volumes and sustained investments in technology, is witnessing significant profit growth.
The ongoing shift to digital payments is advantageous for Visa, with strong domestic volumes supporting its overall performance. A robust cash position enables the company to enhance shareholder value. However, elevated operating expenses pose margin challenges.
The Zacks analyst expect adjusted operating expenses to jump more than 10% in fiscal 2024. It is witnessing a volatile cash volume from the Asia Pacific and CEMEA regions. Consumer spending growth is also drying up. Moreover, rising client incentives will affect its adjusted revenues. As such, the stock warrants a cautious stance.
(You can read the full research report on Visa here >>>)
Netflix’s shares have outperformed the Zacks Broadcast Radio and Television industry over the year-to-date period (+74.1% vs. +32.8%). The company’s third-quarter 2024 results benefited from its growing subscriber base, thanks to a robust localized and foreign-language content portfolio and healthy engagement levels with about two hours of viewing per member per day, indicating strong member retention.
The planned launch of an in-house ad tech platform in 2025 signals Netflix's commitment to maximizing this new revenue stream, with ad revenues expected to roughly double year-over-year in 2025. Netflix has raised its guidance for full year 2024, projecting revenue growth at the high end of its previous 14-15% range.
However, stiff competition in the streaming space from the likes of Apple, Amazon Prime Video and Disney+ is a headwind. NFLX’s leveraged balance sheet and a higher streaming obligation are concerns.
(You can read the full research report on Netflix here >>>)
Shares of Merck have gained +0.1% over the year-to-date period against the Zacks Large Cap Pharmaceuticals industry’s gain of +22.7%. The company’s products like Keytruda and Gardasil have been driving sales. With continued label expansion into new indications, particularly earlier-stage launches, Keytruda is expected to see continued growth. Animal health and vaccine products are core growth drivers.
Merck boasts a strong cancer pipeline, including Keytruda. However, generic competition for several drugs and rising competitive pressure, mainly on the diabetes franchise, will continue to be overhangs on the top line.
There are concerns about Merck’s ability to grow its non-oncology business ahead of Keytruda’s loss of exclusivity later in the decade. Estimates have declined slightly ahead of Q3 results. Merck has a positive record of earnings surprises in recent quarters.
(You can read the full research report on Merck here >>>)
Hovnanian’s shares have outperformed the Zacks Building Products - Home Builders industry over the past year (+175.6% vs. +89.3%). This microcap company with a market capitalization of $1.25 billion has demonstrated strong financial performance in fiscal third-quarter 2024, with an 11% revenue increase to $722.7 million, driven by higher home deliveries and sales prices.
The company saw a 38% rise in income before taxes and a 30.8% rise in net income, supported by improved EBITDA of $127.9 million. Key growth drivers include a 24% increase in community count and a 34% rise in lots controlled, setting the stage for future revenue gains. Favorable mortgage rate declines and strong buyer demand, evidenced by a 23% increase in contracts and surging web traffic, support the company’s outlook.
Hovnanian’s strategic focus on high-margin markets and diversified geographic and product mix enhances its resilience and profitability. With upward revisions to 2024 revenue and EBITDA guidance, HOV remains well-poised for continued growth in a strong housing market.
(You can read the full research report on Hovnanian here >>>)
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Merck & Co., Inc. (MRK) : Free Stock Analysis Report
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Hovnanian Enterprises Inc (HOV) : Free Stock Analysis Report
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