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Top Analyst Reports for Union Pacific, Starbucks & Duke Energy

Wednesday, March 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 Union Pacific Corporation (UNP), Starbucks Corporation (SBUX) and Duke Energy Corporation (DUK). 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 Union Pacific have underperformed the Zacks Transportation - Rail industry over the past year (-26.1% vs. -18.7%). The company is facing the heat due to the escalation in fuel costs, as oil prices move north which is worrisome. This phenomenon induced a 20% rise in operating expenses in 2022. Fuel costs surged 68% last year. The same is likely to be high in the March quarter as well.

However, Union Pacific's efforts to reward its shareholders even in the current uncertain scenario please us. The company hiked dividend twice in 2021. In May 2022, UNP further upped its quarterly dividend by 10%. The railroad operator is also active on the buyback front.

In 2022, UNP bought back shares worth $6,282 million. The railroad operator paid dividends worth $3,159 million in 2022. UNP's strong free cash flow generating ability supports its shareholder-friendly activities. The uptick in overall volumes (up 2% year over year in 2002) as labor woes ease is an added positive.

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

Starbucks shares have outperformed the Zacks Retail - Restaurants industry over the past year (+14.0% vs. +7.8%). The company is benefitting from solid global brand recognition supporting which management focuses on increasing global market share by judiciously opening stores in new and existing markets, and remodeling existing stores.

North America comps continue to impress investors. The company also aids from successful menu innovations and digital initiatives along with its exceptional loyalty programs.

However, its performance continues to be negatively impacted by dismal China results, higher-than-expected inflationary pressures, increased costs and a tight labor market. Earnings estimate for fiscal 2023 declined in the past 60 days depicting analysts’ concern over its growth prospects.

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

Shares of Duke Energy have underperformed the Zacks Utility - Electric Power industry over the past year (-10.3% vs. -7.8%). The company’s ability to achieve a net-zero target by 2050 at a cost-effective price could be at risk due to higher technological resource prices. A comparative analysis of the stock’s trailing 12-month Enterprise Value/Sales ratio shows a gloomy picture that may concern investors.

Nevertheless, Duke Energy is a premier utility service provider which focuses on expanding its scale of operations and implementing modern technologies at its facilities by investing heavily in infrastructure and expansion projects. During the 2023-2027 period, the company plans capital investments of $65 billion. It also plans to expand in the electric vehicle segment.

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

Other noteworthy reports we are featuring today include Eni S.p.A. (E), Copart, Inc. (CPRT) and HP Inc. (HPQ).

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

Dividends & Buybacks Aid Union Pacific (UNP), Cost Woes Stay

Store Growth Aids Starbucks (SBUX), Dismal China Comps Hurts

Solid Investments Aid Duke Energy (DUK), Weak Solvency Woes

Featured Reports

Eni (E) to Gain From Natural Gas Discovery at Barents Sea
The Zacks analyst believes that Eni's latest natural gas discovery in the Barents Sea will strengthen its position in the north and has the potential to uncover possibilities in the region.

Digitization & Low Debt Aid Copart (CPRT) Amid High Costs
Leverage of less than 1% and stepped-up e-commerce efforts, including the launch of Copart Max, boost Copart's prospects. However, high G&A costs may dent margins, per the Zacks analyst.

HP (HPQ) Hurt by Declining Demand, High Inventory Levels
Per the Zacks analyst, HP is hurt by declining demand for its consumer and commercial PCs. Also, high inventory levels at channel partners are leading to order delays.

Robust Snacks Business Aids Kellogg (K), High Costs a Woe
Per the Zacks analyst, Kellogg has been benefiting from strength in its world-class snack brands. However, the company is grappling with rising input cost inflation for a while.

Rising Investment Income, Acquisitions Aid Owl Rock (ORCC)
Per the Zacks analyst, the company's revenues are driven by higher investment income, thanks to its improved interest income. Buyouts enhance its capabilities and diversify the business.

Strong Image Processing Chip Demand Aid Ambarella (AMBA)
Per the Zacks analyst, strong demand for video compression and image processing chips are aiding Ambarella's growth. Recovery in the automotive market is also a positive.

NuVasive's (NUVA) Globus Medical Merger to Aid Strategically
The Zacks analyst is pleased with NuVasive's $3.1-billion merger deal with Globus Medical. This will bring together two major players in the musculoskeletal space that is now valued at $50 billion.

New Upgrades

Government Services Group segment Benefits Tetra Tech (TTEK)
Per the Zacks analyst, Tetra Tech is benefitting from its Government Services Group Segment, driven by robust water and environmental programs. A strong backlog level will also be beneficial.

Robust Investment Banking Arm Aid Evercore (EVR), Costs Up
Per the Zacks analyst, strong investment banking business, expansion of geographic footprint and client base will aid Evercore's revenues. Yet, rising expenses and stiff competition are headwinds.

Reduced Costs to Drive America Eagle's (AEO) Bottom Line
Per the Zacks analyst, American Eagle has been witnessing solid merchandise margin, reduced product costs as well as lower compensations and delivery costs. This led Q4 bottom line to rise 5.7%.

New Downgrades

Gol Linhas (GOL) Continues to Grapple With Higher Fuel Costs
The Zacks analyst is worried about the escalating fuel prices as they are likely to keep the bottom line under pressure.

Silicon Motion (SIMO) Hurt by High Inventory, Supply-Chain Woes
Per the Zacks analyst, high inventory levels in the post-pandemic market, supply chain constraints and uncertain geopolitical conditions are likely to hurt the margins of Silicon Motion.

Higher Input Cost Inflation Hurt Louisiana-Pacific (LPX)
Per the Zacks analyst, high raw material, freight and labor costs, and economic uncertainty hurt Louisiana-Pacific's growth prospects.

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

HP Inc. (HPQ) : Free Stock Analysis Report

Duke Energy Corporation (DUK) : Free Stock Analysis Report

Union Pacific Corporation (UNP) : Free Stock Analysis Report

Starbucks Corporation (SBUX) : Free Stock Analysis Report

Eni SpA (E) : Free Stock Analysis Report

Copart, Inc. (CPRT) : Free Stock Analysis Report

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Zacks Investment Research