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Top Stock Reports for ConocoPhillips, Medtronic & PayPal

Monday, February 6, 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 ConocoPhillips (COP), Medtronic plc (MDT) and PayPal Holdings, Inc. (PYPL). 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 >>>

ConocoPhillips’ shares have outperformed the Zacks Oil and Gas - Integrated - U.S. industry over the past six months (+15.5% vs. +13.5%). The company holds bulk acreages in the unconventional plays of Eagle Ford shale, Permian Basin and Bakken shale. Significant opportunities are there for the firm in the Bakken Shale, where it owns about 750 undrilled locations that could provide access to huge reserves.

COP projects its 2022 production at 1.74 million barrels of oil equivalent per day (MMBoe/d), suggesting an increase from 1.6 MMBoe/d last year. COP’s balance sheet is significantly less leveraged than the industry it belongs to. Also, it approved a $20-billion increase in the existing share repurchase program to $45 billion.

However, COP is highly exposed to oil price fluctuations, which makes things challenging for the company. Also, it been generating lower dividend yields than the industry over the past few years. As such, the stock warrants a cautious stance.

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

Shares of Medtronic have declined -14.6% over the past year against the Zacks Medical - Products industry’s decline of -35.2%. The company’s innovations and market expansion efforts are helping it offset the impact of the high inflation and supply disruptions. The Zacks analyst believes in fiscal 2024, adjusted earnings are expected to grow 1.5% on 2.9% growth in revenues.

However, Medtronic is strategically expanding its global presence to address the unmet demand for advanced medical technologies. We expect Medtronic to register an international sales CAGR of 1.5% through 2025. Within cardiovascular, Medtronic is gaining market share, banking on product launches. Within MedSurg, Medtronic is scaling production of Hugo RAS.

Medtronic’s strong liquidity position should allow it to meet its near-term debt obligations. All these factors support our bullish stance on the stock.

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

Shares of PayPal have declined -29.5% over the past year against the Zacks Internet - Software industry’s decline of -31.0%. The company trimmed its guidance for revenue growth in anticipation of an economic downturn, which might slow down consumer spending. Further, intensifying market competition and foreign exchange headwinds remain risks.

However, PayPal is benefiting from growing total payments volume owing to increasing net new active accounts. Strengthening customer engagement on the company’s platform is a major positive. Further, Venmo’s improving monetization efforts and rising adoption rate across various platforms are aiding the total active accounts growth.

Solid momentum across core peer to peer, merchant services, PayPal Checkout experiences remains a tailwind. We believe accelerating transaction revenues of PayPal are likely to continue driving revenues. Considering the abovementioned facts, we expect net revenues in 2022 to rise 8.4% from 2021.

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

Other noteworthy reports we are featuring today include Mondelez International, Inc. (MDLZ), The Hershey Co. (HSY) and DTE Energy Co. (DTE).

Mark Vickery
Senior Editor

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

ConocoPhillips (COP) Banks On Oil-Rich Bakken Shale Assets

Medtronic (MDT) Gains in Market Share, MedSurg Growth Robust

PayPal (PYPL) Benefits From Increasing Total Payment Volume

Featured Reports

Mondelez (MDLZ) Gains on Solid Chocolate & Biscuit Categories
Per the Zacks analyst, Mondelez has been gaining on its focus on expanding the core chocolate & biscuit categories. Both these categories registered double-digit growth in the fourth quarter of 2022.

Solid Investments Aid DTE Energy (DTE), Weak Solvency Woes
Per the Zacks analyst, DTE Energy's investment in infrastructure and expansion projects tend to boost its long-term growth prospects. However, its weak solvency position remains a bottleneck.

United Therapeutics' (UTHR) PAH Portfolio Drives Growth
The Zacks Analyst believes that demand for United Therapeutics' treprostinil medicines is strong. Newly launched Orenitram and Tyvaso and pipeline have the potential to drive long-term growth.

Demand for Boilers to Aid A. O. Smith (AOS) Amid High Costs
Per the Zacks analyst, robust demand for A. O. Smith's commercial and residential boilers and water treatment products should drive its growth. However, high operating costs are concerning for it.

Landstar (LSTR) Rides on Dividends & Buyback, Expenses Ail
The Zacks analyst likes the shareholder-friendly measures adopted by Landstar. However, rising operating expenses are concerning as they are likely to keep the bottom line under pressure.

Timberland Diversity & Buyouts Aid Rayonier's (RYN) Growth
Per the Zacks analyst, Rayonier to gain from its portfolio of high-quality timberlands in United States and New Zealand and strategic buyouts though softer demand could weigh on pricing realizations.

Acquisitions Aid Revenue Growth at Ensign Group (ENSG)
Per the Zacks analyst, a number of acquisitions of nursing operations and real estate made by the company has expanded its business portfolio which in turn has driven revenue growth.

New Upgrades

Hershey (HSY) Benefits From Prudent Buyouts & Solid Pricing
Per the Zacks analyst, contributions from buyouts and higher prices are driving growth for Hershey. In the fourth quarter, net sales included a 3.6-point benefit from the Pretzels and Dot's buyouts.

Maxar (MAXR) To Benefit From Diversified Product Portfolio
Per the Zacks analyst, Maxar will benefit from increased demand across all business segment. Also rising contract wins from the U.S. government, other international governments are tailwinds.

Brand Strength to Drive Abercrombie & Fitch's (ANF) Top Line
Per the Zacks analyst, Abercrombie & Fitch is gaining from continued momentum across brands, particularly the Abercrombie brand and the women's business. It expects FY22 sales growth of 1-2%.

New Downgrades

Stanley Black (SWK) Hurt by Soft Demand & Forex Woes
The Zacks analyst is concerned about the company's bearish forecast for 2023 due to a soft demand environment and lower volumes. Unfavorable foreign currency movements are added concerns.

Inflation & Weather Related Risks Hurt Martin's (MLM) Growth
As per the Zacks analyst, Martin's growth is affected by inflationary pressures, adverse weather conditions and supply chain constraints.

Lower Demand & Currency Headwind Hurt Masco's (MAS) Growth
As per the Zacks analystu, lower demand, higher operational costs and additional foreign currency headwinds are hurting Masco's growth.

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

ConocoPhillips (COP) : Free Stock Analysis Report

DTE Energy Company (DTE) : Free Stock Analysis Report

Medtronic PLC (MDT) : Free Stock Analysis Report

Hershey Company (The) (HSY) : Free Stock Analysis Report

Mondelez International, Inc. (MDLZ) : Free Stock Analysis Report

PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report

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Zacks Investment Research