Top Analyst Reports for McDonald's, ConocoPhillips & RTX
Thursday, November 9, 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 McDonald's Corporation (MCD), ConocoPhillips (COP) and RTX Corporation (RTX). 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 >>>
McDonald's shares have struggled this year, lagging the broader marekt (+1.4% vs. +15.2% for the S&P 500 index) and the Zacks Restaurants industry (+1.4% vs. +2.9%) on the back of lingering worries about the expected economic slowdown on the fast-food giant's business.
These worries notwithstanding, MacDonald's continues to outperform in operatging results, as was more than clear from the company's better-than-expected results on October 30th. The company’s top and the bottom line increased on a year-over-year basis. Robust comparable sales, menu price increase and positive guest counts backed the upside. Also, its emphasis on digital initiatives, campaigns and loyalty programs bodes well.
During the quarter, digital sales came in at $9 billion, contributing 40% to the company’s system-wide sales. Given the rise in digital adoption, the company remains optimistic and anticipates the initiatives to drive sales and average checks in the upcoming periods.
Earnings estimates for 2023 have increased in the past 30 days, depicting analysts’ optimism. However, inflationary pressures and stiff competition are primary headwinds.
(You can read the full research report on McDonald’s here >>>)
Shares of ConocoPhillips have outperformed the Zacks Oil and Gas - Integrated - United States industry over the past six months (+16.3% vs. +12.9%). The company has secured a solid production outlook, thanks to its decades of drilling inventories across its low-cost and diversified upstream asset base.
The resource base represents the company’s strong footprint in prolific acres in the United States, comprising Eagle Ford shale, Permian Basin and Bakken shale. Also, the company is better positioned to rely on its strong balance sheet to withstand any adverse business scenario.
However, due to the inflationary market, the company’s overall operating and production expenses continue to increase, hurting the bottom line. ConocoPhillips’ exploration and production activities are exposed to extreme volatility in oil and gas prices, making the overall business scenario of the upstream energy player extremely choppy.
(You can read the full research report on ConocoPhillips here >>>)
Shares of RTX have underperformed the Zacks Aerospace - Defense industry over the past year (-12.9% vs. -11.2%). The Zacks analyst believes that appreciating U.S. dollar has been burdening airlines, which may hurt the stock. Also, removals and inspections of engines from A32neo might increase costs for RTX.
It may also be affected if China enforces its announced sanctions against RTX’s missile and defense unit. Nevertheless, its wide range of combat-proven defense products, RTX continues to receive ample orders from the Pentagon and its foreign allies, which, in turn, bolsters its backlog count.
A steady recovery in commercial air traffic is boosting commercial OEM as well as commercial aftermarket sales for RTX. The stock holds a solid solvency position.
(You can read the full research report on RTX here >>>)
Other noteworthy reports we are featuring today include Merck & Co., Inc. (MRK), Moody's Corporation (MCO) and Emerson Electric Co. (EMR).
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
Solid Comps Growth Aid McDonald's (MCD) Amid High Costs
ConocoPhillips (COP) Banks On Prolific Shale Oil Reserves
Order Growth Continues to Aid RTX, Amid Jet Fuel Price Hike
Featured Reports
Keytruda to Remain Merck's (MRK) Key Top-Line Driver
The Zacks analyst expects Keytruda to drive Merck's (MRK) sales and see strong growth for the next 2-3 years despite concerns of how it will grow its business once Keytruda loses patent exclusivity.
Buyouts, Diversification Aid Moody's (MCO), High Costs Ails
Per the Zacks analyst, synergies from buyouts and efforts to diversify revenues will aid Moody's. Mounting costs, tough operating backdrop and pricing pressure due to stiff competition are concerns.
Digital Health Demand Aid ResMed (RMD), Stiff Rivalry Ail
The Zacks analyst is optimistic about ResMed leading the market in digital health technology, with more than 16 billion nights of medical data in the cloud. Yet, stiff rivalry remains a concern.
Steady User Growth & Premium Content Demand Aids Snap (SNAP)
Per the Zacks analyst, Snap benefits from an improving user growth driven by strong adoption of Augmented Reality (AR) Lenses and demand for premium content including Shows.
Strong Portfolio & Acquisitions to Drive PTC's Performance
Per the Zacks analyst, PTC's performance is being driven by robust demand for products like Creo and Windchill and strategic acquisitions. However, stiff competition is a headwind.
Gen Digital (GEN) Rides on Product and Customer Strength
Per the Zacks analyst, Gen Digital is gaining from solid demand for ID theft protection solutions such as dark web monitoring and ID advisor. Continued stabilization of customer count is a positive.
Denali (DNLI) Pipeline Progress Good, Targeted Market Tough
Per the Zacks analyst, Denali's pipeline of targeted therapeutic candidates for neurodegenerative diseases is promising. Strategic collaborations bode well but the targeted market is challenging.
New Upgrades
Emerson (EMR) Gains from Acquisitions & End-Market Strength
Per the Zacks analyst, strength across the process and hybrid end markets, and contributions from the acquisitions of National Instruments, Afag and Flexim augur well for Emerson's growth.
Higher Transaction Fees, Acquisitions Aid Cboe Global (CBOE)
Per the Zacks analys, Cboe Global is set to grow on higher transaction fees driven by trading volume growth given solid proprietary products. Also, buyouts have diversified its product portfolio.
Brand Strength to Drive Molson Coors' (TAP) Performance
Per the Zacks analyst, Molson Coors has been gaining from strength in Coors Light and Miller Lite brands. Also, its above premium portfolio and gains from Revitalization Plan act as growth drivers.
New Downgrades
Poor Solar Demand, Forex Risk May Hurt SolarEdge (SEDG)
Per the Zacks analyst, poor demand in the U.S. solar market may continue to impact SolarEdge's future revenues, at least in the near term. The stock also faces foreign currency exchange risk.
Norfolk Southern (NSC) Reels Under Lackluster Volumes
The Zacks analyst is worried about the below-par volumes due to the weak freight demand scenario. The recent technology outage is also a concern. The incident disrupted operations at NSC.
Waters (WAT) Suffers From Weakening Momentum in Asian Market
Per the Zacks analyst, weakness in Asian market due to soft demand conditions in China, is hurting Waters growth prospects.
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ConocoPhillips (COP) : Free Stock Analysis Report
Moody's Corporation (MCO) : Free Stock Analysis Report
Emerson Electric Co. (EMR) : Free Stock Analysis Report
Merck & Co., Inc. (MRK) : Free Stock Analysis Report
McDonald's Corporation (MCD) : Free Stock Analysis Report
RTX Corporation (RTX) : Free Stock Analysis Report
