Top Analyst Reports for Amazon.com, Morgan Stanley & Fortinet
Wednesday, February 22, 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 Amazon.com, Inc. (AMZN), Morgan Stanley (MS) and Fortinet, Inc. (FTNT). 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 Amazon.com have underperformed the Zacks Internet - Commerce industry over the past year (-34.7% vs. -27.9%). The company is facing inflationary pressure, supply-chain constraints, geopolitical tensions and foreign currency headwinds, all which remain concerns. Further, softness in online shopping activities remains a negative for its online stores.
Nevertheless, Amazon’s fourth quarter results were driven by Prime and AWS momentum. Strengthening AWS services portfolio and its growing adoption rate contributed well. Ultrafast delivery services and its expanding content portfolio were beneficial. Strengthening relationships with third-party sellers remained a positive for the company. A robust advertising business contributed well.
Improving Alexa skills, along with robust smart home products offerings, were tailwinds. Amazon’s strong global presence and solid momentum among the small and medium businesses look good for the company, as well. Considering the abovementioned facts, the Zacks analyst expect 2022 revenue to be up 5% from 2021.
(You can read the full research report on Amazon.com here >>>)
Morgan Stanley’s shares have outperformed the Zacks Financial - Investment Bank industry over the past year (+4.3% vs. +2.9%). The company is undertaking steps, including strategic buyouts, to become less dependent on capital-market-driven revenue sources. These efforts, along with a focus on corporate lending and higher rates, are expected to aid revenues. Our estimates for total revenues indicate a CAGR of 3.1% by 2025.
However, Morgan Stanley’s fourth-quarter 2022 results reflected weak investment banking (IB) performance. Ambiguity of the performance of the capital markets remains a concern and is expected to affect the Institutional Securities segment. The Zacks analyst expects the segment’s revenues to decline 2% in 2023.
Also, muted investment banking performance is a major headwind. Elevated costs due to investments in franchises and inflation are likely hamper profits, and our estimates show a CAGR of 2% by 2025.
(You can read the full research report on Morgan Stanley here >>>)
Shares of Fortinet have outperformed the Zacks Security industry over the past year (+4.9% vs. +2.9%). The company is benefiting from rising demand for security and networking products amid a growing hybrid working trend. It is also benefiting from robust growth in Fortinet Security Fabric, cloud and Software-defined Wide Area Network (SD-WAN) offerings. Continued deal wins, especially those of high value, are a key driver.
Higher IT spending on cybersecurity is further expected to aid Fortinet to grow faster than the security market. The focus on enhancing its unified threat management (UTM) portfolio through product development and acquisitions is a tailwind for Fortinet. The Zacks analyst estimates suggest Fortinet’s revenues will grow at a CAGR of 22% through 2023-2025.
However, intensifying competition due to increasing consolidation in the security industry poses concerns. Increased hiring and mergers & acquisitions spends remain overhangs on margin.
(You can read the full research report on Fortinet here >>>)
Other noteworthy reports we are featuring today include W.W. Grainger, Inc. (GWW), M&T Bank Corp. (MTB) and Align Technology, Inc. (ALGN).
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
Prime Momentum & Growing AWS Adoption Benefit Amazon (AMZN)
Buyouts Support Morgan Stanley (MS), Capital Markets A Woe
Fortinet (FTNT) Rides on Product Strength, Marketing Efforts
Featured Reports
Buyouts, Higher Rates Aid M&T Bank (MTB), Rising Costs a Woe
Per the Zacks analyst, higher rates, a solid balance sheet and acquisitions with an aim to reduce costs aid M&T Bank. Yet, deteriorating credit quality and rising expenses are near-term headwinds.
Innovations Aid Align (ALGN) amid Macro-economic Pressure
The Zacks analyst is impressed that, despite FX issues, Align shows sequential growth in Systems and Services. The Clear Aligner shipments growth banks on strong sales of the new Invisalign products.
Robust Demand & Digital Efforts to Aid Clorox's (CLX) Growth
Per the Zacks analyst, Clorox has been gaining from solid demand for its products and brands, continued strength in the international segment and digital investments. This led to Q3 sales growth.
Robust Digital Ordering Aid Domino's (DPZ), High Costs Ail
Per the Zacks analyst, a solid digital ordering system and higher global retail sales bode well for Domino's. However, staffing challenges, supply chain problems and inflationary pressures hurts.
Digitization Holds Key to BJ's Wholesale (BJ) Sales Growth
Per the Zacks analyst BJ's Wholesale has been investing on enhancing digital capabilities in order to better engage with members. Digitally-enabled sales rose 43% in the third quarter of fiscal 2022.
Iridium's (IRDM) Performance Gains from Higher Subscribers
Per the Zacks analyst, Iridium's performance is gaining from increasing subscribers. The company expects commercial service revenues to benefit from growth in IoT and ongoing activations.
Viper Energy (VNOM) Continues to Bank on Royalty Income
Viper Energy generates strong and steady royalty income from mineral interests in the prolific Permian Basin. But, rising operating expense per barrel of oil equivalent concerns the Zacks analyst.
New Upgrades
Strong Customer Base, Volume Growth to Aid Grainger (GWW).
Per the Zacks analyst, Grainger is poised well to gain on volume and customer growth in its end markets. Efforts to improve price and cost control and investments in marketing will aid results.
Acquisitions, Strong Demand to Aid Reliance Steel (RS)
According to the Zacks analyst, the company will gain from strong demand in the majority of its end markets and its strategy to drive operating results by acquiring high-quality businesses.
Voya Financial (VOYA) Benefits From Investment Management
Per the Zacks analyst, solid performance at the Investment Management segment backed by increased investment capital revenue and higher fee-based margin has been driving revenue growth at the company.
New Downgrades
Huge Debt Load, Rising Costs Hurt Crestwood's (CEQP) Margins
The Zacks analyst worries about Crestwood's increasing debt load, which can lead to volatile earnings. The partnership's rising operation and maintenance costs are concerning.
Rising Reinsurance Costs To Hurt Lincoln's (LNC) Life Unit
Per the Zacks analyst, growing reinsurance costs will keep Lincoln National's life insurance business under pressure. Also, unfavorable equity markets will keep curbing annuities segment's growth.
Vulcan (VMC) Ails From Inflationary Pressure & High Cost
Per the Zacks analyst, higher fuel and labor costs, and inflationary pressures for many other parts and supplies are hurting Vulcan.
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Morgan Stanley (MS) : Free Stock Analysis Report
M&T Bank Corporation (MTB) : Free Stock Analysis Report
Align Technology, Inc. (ALGN) : Free Stock Analysis Report
W.W. Grainger, Inc. (GWW) : Free Stock Analysis Report
Fortinet, Inc. (FTNT) : Free Stock Analysis Report
