Thursday, January 19, 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 PepsiCo, Inc. (PEP), Verizon Communications Inc. (VZ) and The Sanofi (SNY). 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 PepsiCo have modestly lagged rival Coca Cola over the past year (-2.3% vs. -1.1%), but they have done notably better than the Zacks Consumer Staples sector (down -5.7%) and the S&P 500 index (down -14.7%). The company is undoubtedly faced with near-term margin pressures on account of higher expenses, but it is nevertheless well positioned to profitably operate in this environment.
PepsiCo’s revenues and earnings beat the Zacks Consensus Estimate and improved year over year in the third quarter. This marked the 17th straight quarter of sales beat. The company benefits from the resilience and strength of global beverage and convenient food businesses.
It expects to benefit by delivering convenience, variety and value proposition to customers through its brands. It raised its revenue view for 2022.
(You can read the full research report on PepsiCo here >>>)
Shares of Verizon Communications have underperformed the Zacks Wireless National industry over the past year (-25.3% vs. -11.7%). The company reiterated its soft guidance for 2022 due a to challenging macroeconomic environment. An intensely competitive market and hefty expenses on promotions and lucrative discounts to attract customers are likely to hurt profitability. Spectrum crunch with a saturated wireless market is another headwind.
However, Verizon plans to accelerate the availability of the 5G Ultra Wideband network with C-Band deployment, focusing on 5G mobility, nationwide broadband, mobile edge compute and business solutions. It is offering various mix-and-match pricing in both wireless and home broadband plans.
Verizon is also aggressively expanding its fiber optics network to support 4G LTE, 5G wireless standards and wireline connections. Customer-focused planning, disciplined engineering and continued network upgrades will likely augment its market position.
(You can read the full research report on Verizon Communications here >>>)
Shares of Sanofi have underperformed the Zacks Large Cap Pharmaceuticals industry over the past year (-5.6% vs. +13.2%). The company is facing headwinds which includes weak performance of diabetes drugs and recent negative pipeline developments. Shares have underperformed the industry this year so far.
However, Sanofi’s Specialty Care unit is on a strong footing, particularly with the regular label expansion of Dupixent. Dupixent has become the key top-line driver for Sanofi. With outside U.S. revenues accelerating and multiple approvals for new indications, its sales are expected to be higher. Sanofi possesses a leading vaccine portfolio, which has become the primary top-line driver.
Its R&D pipeline is strong. Several data read-outs are expected in 2023. Sanofi’s Consumer unit is delivering above-markett sales growth. It has also launched several new drugs in the past couple of years and is expanding its pipeline through M&A deals.
(You can read the full research report on Sanofi here >>>)
Other noteworthy reports we are featuring today include Vale S.A. (VALE), Synopsys, Inc. (SNPS) and Paychex, Inc. (PAYX).
Director of Research
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
Momentum in PepsiCo's (PEP) Snacking Business to Aid Growth
Verizon (VZ) Rides on 5G Focus, Fiber Optics Network Growth
Sanofi (SNY) Relies on Dupixent and Vaccines to Drive Growth
Rising Iron Ore Prices to Aid Vale (VALE) Amid High Costs
Per the Zacks analyst, the recent pickup in iron ore prices, focus on improving quality and productivity and lowering costs will boost Vale's results despite high costs.
Synopsys (SNPS) Banks on Strong Product Menu, Contract Wins
Per the Zacks analyst, Synopsys' focus on strengthening its product portfolio is helping it cater to the growing demand in the EDA market. Deal wins at leading semiconductor companies is a tailwind.
Paychex (PAYX) Gains From Flock Buyout, Rising Costs Ail
Per the Zacks analysts, the Flock acquisition has brought a benefits administration software capable of delivering a suite of digital services to Paychex's portfolio. Rising expenses remain a concern.
Chemed (CHE) Banks on Roto Rooter Business amid Stiff Rivalry
Per Zacks analyst Chemed's (CHE) Roto-Rooter business is well-positioned for growth post-pandemic banking on the company's brand awareness. Yet, Stiff rivalry remains a concern.
Two-platform Business Model, Clients Aid MDU Resources (MDU)
Per the Zacks analyst MDU Resources, two-platform business model and its rising electric and natural gas customers base are going to drive its performance over the long-run.
Tenet (THC) to Gain From Declining Costs & Strategic Buyouts
Decreasing operating expenses will drive Tenet Healthcare's margins in the days ahead, believes the Zacks analyst. Also, acquisitions and strategic alliances are growing its scale of business.
OUTFRONT Media (OUT) to Ride on Rebounding Advertising Demand
Per the Zacks Analyst, OUTFRONT Media's portfolio of billboard and transit sites is well-poised to benefit from the rebound in demand for advertising. Yet, stiff competition from peers is a key woe.
Strong Buildings & Infrastructure Unit Aids Trimble (TRMB)
Per the Zacks analyst, strong civil construction business and contributions from e-Builder, Viewpoint and SketchUp are benefiting Trimble's Buildings & Infrastructure segment.
Tapestry (TPR) Likely to Benefit From 2025 Growth Strategy
Per the Zacks analyst, Tapestry is set to gain from 2025 Growth Strategy, which focuses on customer acquisition and retention; product innovation; omni-channel strengt; and balanced regional growth.
Nabors (NBR) to Benefit from High-Quality Rig Fleet
The Zacks analyst believes that Nabors Industries is well positioned with a sound mix of high-performance rigs and new rigs working in the key shale plays like Bakken and Permian.
Declining Gas Gathering Volumes Hurt Crestwood (CEQP)
The Zacks analyst is concerned about Crestwood since the partnership estimates lower fourth-quarter gas gathering volumes in the prolific Delaware and Powder River basins.
Asbury (ABG) Suffers From Tight Inventory, Elevated Leverage
Low inventory levels, particularly in the new vehicle segment, are likely to limit Asbury's top line. High debt to capitalization of 56% also concerns the Zacks analyst.
Supply Chain & Inflation Woes Hurt Armstrong's (AWI) Growth
As per the Zacks analyst, supply chain woes, increased input cost due to inflation, labor constraints and softening market tighten Armstrong's (AWI) growth potential.
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