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Top Stock Reports for Costco, Walt Disney & AstraZeneca

Thursday, February 29, 2024

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 Costco Wholesale Corp. (COST), The Walt Disney Co. (DIS) and AstraZeneca PLC (AZN). 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 >>>

Costco’s shares have outperformed the Zacks Retail - Discount Stores industry over the past year (+60.9% vs. +30.8%). A consumer defensive stock, Costco has been surviving the market turmoil pretty well.

The discount retailer’s key strengths are strategic investments, a customer-centric approach, merchandise initiatives and an emphasis on membership growth. These factors have been helping it register decent sales and earnings numbers.

This outlook reflects Costco’s ability to navigate the challenging operating environment, generate solid sales and register high membership renewal rates. A favorable product mix, steady store traffic, pricing power and strong liquidity position should help Costco keep outperforming. While trading at a premium to its peers, its long-term growth prospects should help the stock see solid upside.

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

Shares of Walt Disney have outperformed the Zacks Media Conglomerates industry over the past year (+12.8% vs. +1.2%). The company’s first-quarter fiscal 2024 results reflect a solid revival in international theme park and resort businesses. Recent attractions like the Frozen theme land at Hong Kong Disneyland and Walt Disney Park in Paris, as well as the Zootopia theme land at Shanghai Disney, are expected to boost the prospects of the theme park business.

Disney’s declining ad revenues, due to fewer impressions, has been a headwind for some time now. Disney+’s profitability is expected to be negatively impacted by higher investments in content, which will increase programming and production costs at Media and Entertainment Distribution.

Its leveraged balance sheet remains a concern. Disney+ is facing tough competition in the streaming market from the likes of Netflix and Amazon Prime Video.

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

AstraZeneca shares of have gained +2.4% over the past year against the Zacks Large Cap Pharmaceuticals industry’s gain of +35.3%. The company’s key drugs like Lynparza, Tagrisso, Imfinzi, Fasenra and Farxiga should keep driving revenues.  

AstraZeneca has also been engaged in external acquisitions and strategic collaborations to boost its pipeline, while investing in geographic areas of high growth like emerging markets. Backed by its new products and pipeline drugs, AstraZeneca believes it can post industry-leading top-line growth in the 2025-2030 period.

However, AstraZeneca’s diabetes franchise faces stiff competition, while pricing pressure hurts sales in the respiratory unit. Sales have slowed down in its key market, China. Estimates have gone up slightly ahead of the Q4 earnings release. The company has a positive record of earnings surprises in the recent quarters.

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

Other noteworthy reports we are featuring today include O'Reilly Automotive, Inc. (ORLY), Restaurant Brands International Inc. (QSR) and Arch Capital Group Ltd. (ACGL).

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

Decent Comparable Sales Run to Fuel Costco's (COST) Top Line

Improvement In Resorts & Park Businesses Aids Disney (DIS)

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Key Drugs Aid AstraZeneca (AZN) Sales; Pipeline Strong

Featured Reports

Rising Store Count to Aid O'Reilly (ORLY), High Capex Ails
The Zacks analyst is optimistic about O'Reilly's plan to open 190-200 stores in 2024, which is set to fuel sales. However, high capex to develop advanced superior offerings might limit its cash flows.

Restaurant Brands (QSR) Banks on Unit Expansion, Costs High
Per the Zacks analyst, Restaurant Brands is likely to benefit from unit growth, strong digital ordering and a healthy balance of check-in traffic. However, elevated cost pressures is a headwind.

Product Diversification, Rate Hike Aid Arch Capital (ACGL)
Per the Zacks analyst, Arch Capital is set to grow on rate increases and growth in existing accounts. Global operations and compelling product portfolio provides diversification and earnings stability

Biogen's (BIIB) New Drugs Skyclarys & Others Can Revive Growth
The Zacks analyst believes Biogen's new products like Leqembi for Alzheimer's disease, Skyclarys for Friedreich's ataxia and Zurzuvae for depression can help revive growth in the long term

Omnicom (OMC) Gains From Diversification Amid Low Liquidity
Per the Zacks analyst, Omnicom has a diversified business, with service offerings across areas of functional expertise and geographical regions. Low liquidity is concerning.

Digital Transformation and Acquisitions Aid Amdocs (DOX)
Per the Zacks analyst, Amdocs is benefiting from ongoing digital transformations and adoption of its cloud services. Moreover, strategic acquisitions like Astadia and Openet are a positive.

APA Corporation (APA) to Gain from Suriname Portfolio
The Zacks analyst believes that APA's significant drilling success in Suriname points to significant cash flow potential but is worried about the oil explorer's high debt burden.

New Upgrades

Organic Growth & Solid AUM Support T. Rowe Price (TROW)
Per the Zacks analyst, solid AUM balance, broadening distribution reach and business diversification efforts aid T. Rowe Price's top-line. Solid liquidity aids sustainable capital distributions.

Strong Demand for IVL Aids ShockWave Medical's (SWAV) Growth
Per the Zacks analyst, sustained clinical acceptance and penetration of IVL is promising for ShockWave Medical. The fiscal 2023 results were driven by strength across the entire Shockwave franchise.

AMERISAFE (AMSF) Benefits From Policy Retention & No Debt
Per the Zacks analyst, AMERISAFE's strong policy retention, prudent investments and solid financial position with no debt will produce favorable returns to investors.

New Downgrades

Fluctuating Commodity Price, Competition Ail Murphy (MUR)
Per the Zacks analyst Murphy Oil future prospects can be adversely impacted by the fluctuating commodity prices, while competitive industry can affect its profitability.

Lower Fertilizer Prices, High Debt Ail Nutrien (NTR)
Per the Zacks analyst, lower fertilizer prices partly due to weaker demand will weigh on the company's bottom line. Its high debt level also poses a concern.

Higher Costs and Stiff Competition To Hurt Ciena (CIEN)
Per the Zacks analyst, Ciena's performance is affected by increasing research and development to fend off stiff competition are headwinds. Also, the leveraged balance sheet is a concern.

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

AstraZeneca PLC (AZN) : Free Stock Analysis Report

O'Reilly Automotive, Inc. (ORLY) : Free Stock Analysis Report

Costco Wholesale Corporation (COST) : Free Stock Analysis Report

The Walt Disney Company (DIS) : Free Stock Analysis Report

Arch Capital Group Ltd. (ACGL) : Free Stock Analysis Report

Restaurant Brands International Inc. (QSR) : Free Stock Analysis Report

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Zacks Investment Research