Top Analyst Reports for Microsoft, Amazon.com & Berkshire Hathaway
Thursday, February 22, 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 Microsoft Corp. (MSFT), Amazon.com, Inc. (AMZN) and Berkshire Hathaway Inc. (BRK.B). 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 >>>
Microsoft’s shares have outperformed the Zacks Computer - Software industry over the past year (+59.2% vs. +52.8%). The company’s second-quarter results gained from strong Intelligent Cloud, and Productivity and Business Processes revenues. Productivity and Business Processes rose due to a strong adoption of Office 365 Commercial solutions. Microsoft 365 Consumer subscribers grew to 78.4 million.
Continued momentum in the small and medium businesses, frontline worker offerings and a gain in revenue per user drove the top line. Intelligent Cloud revenues were driven by growth in Azure and other cloud services. Solid adoption of Azure AI, which now has a clientele of more than 53,000 customers, holds promise.
However, Office's declining commercial licensing has been a headwind due to the continued customer shift to cloud offerings. Higher operating expenses and spending on Azure enhancements amid stiff competition in the cloud space remains a concern.
(You can read the full research report on Microsoft here >>>)
Shares of Amazon.com have outperformed the Zacks Internet - Commerce industry over the past year (+75.9% vs. +47.6%). Strengthening AWS services portfolio and its growing adoption rate contributed well to AWS performance. Ultrafast delivery services and an expanding content portfolio were beneficial. Strengthening relationships with third-party sellers was also a positive.
A robust advertising business contributed well. Notably, improving Alexa skills, along with an array of smart home products offerings remain tailwinds. Amazon’s strong global presence and solid momentum among the small and medium businesses are positives, as well.
Growing capabilities in grocery, pharmacy, healthcare and autonomous driving are additional successes for Amazon. Also, a deepening focus on generative AI is a major plus. However, macroeconomic challenges are among its concerns.
(You can read the full research report on Amazon.com here >>>)
Berkshire Hathaway’s shares have outperformed the Zacks Insurance - Property and Casualty industry over the past year (+35.0% vs. +29.5%). The company is one of the largest property and casualty insurance companies, with numerous diverse business activities. A strong cash position supports earnings-accretive bolt-on buyouts, and is indicative of its financial flexibility.
Continued insurance business growth fuels an increase in its float, driving earnings and generating maximum returns on equity. The non-insurance businesses have also been doing well in the last few years. The addition of Pilot Travel Centers (PTC) has strengthened its energy business. A sturdy capital level provides further impetus.
However, exposure to catatrophic losses induces earnings volatility and also affects underwriting results. Huge capital expenditures remain a headwind. With the demise of Charles Munger, uncertainty looms over the company's performance.
(You can read the full research report on Berkshire Hathaway here >>>)
Other noteworthy reports we are featuring today include Abbott Laboratories (ABT), Sanofi (SNY) and BlackRock, Inc. (BLK).
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
Adoption of Cloud & Office 365 Strength Aid Microsoft (MSFT)
Amazon (AMZN) Banks on Growing AWS Adoption & Prime Momentum
Solid Insurance Business Aid Berkshire (BRK.B), Cat Loss Ail
Featured Reports
Strength in EPD Arm Aids Abbott (ABT), Covid Sales Dip
The Zacks Analyst is impressed that the solid performance in Abbott's Established Pharmaceuticals arm reflects the success of its unique business model. Yet, lower Covid testing sales hurt progress.
Dupixent to Remain Sanofi's (SNY) Key Top-Line Driver
The Zacks analyst expects Dupixent to remain Sanofi's key top-line driver for Sanofi as it enjoys strong demand trends. However, 2024 profits are expected to decline due to higher R&D costs and taxes.
Buyouts, Robust AUM Growth Aid BlackRock (BLK), Costs Ail
Per the Zacks analyst, BlackRock's acquisition efforts along with the continued rise in its assets under management balance will aid the top line. Higher administration costs will likely hurt profits.
Automotive OEM Unit Aids Illinois Tool (ITW) Amid Forex Woes
Per the Zacks analyst, Illinois Tool is benefiting from its Automotive OEM unit, driven by penetration gains in the rapidly growing EV markets. However, forex woes are an added concern.
Infrastructure Solution Demand Aids Jabobs (J), Costs Hurt
Per the Zacks analyst, Jacobs is expected to benefit from strong global trends in infrastructure modernization, energy transition & national security investments. However, higher overhead costs hurt.
Best Buy's (BBY) Total Tech Program to Fuel Growth
Per the Zacks analyst, Best Buy's Total Tech program stands out as a pivotal driver of growth, leveraging a comprehensive suite of services and benefits to enhance customer engagement and loyalty.
Commercial Sales Aid Triumph Group (TGI), High Fuel Cost Ail
Per the Zacks analyst, the recovering global passenger traffic boosts Triumph Group's commercial aerospace sales. Yet, high fuel prices may lead to lower jet orders and thereby impact its operations.
New Upgrades
Recurring Revenues & Technology Growth Aid Envestnet (ENV)
Per the Zacks analyst, Envestnet's business model ensures solid asset-based and subscription-based recurring revenue generation capacity. Also, focus on technology development is a tailwind.
Product Innovation & Cost Control to Drive Manitowoc (MTW)
Per the Zacks Analyst, focus on product innovation, growing its high-margin aftermarket business as well as on cost controls and increasing productivity are likely to drive Manitowoc's results.
Cambium (CMBM) Likely to Profit from Cost-Optimization Focus
Per the Zacks analyst, Cambium is well poised to benefit in the long run from a proprietary software and product ramp up, as it continues to take active initiatives to optimize its cost structure.
New Downgrades
Targa Resources (TRGP) Weighed Down by Massive Debt Burden
The Zacks analyst believes that Targa Resources' high debt-to-capitalization ratio of 74% is a concern, as it restricts the company's financial freedom to tap into growth opportunities.
Increasing Operational Costs To Hurt Viper Energy (VNOM)
Per the Zacks Analyst, Viper Energy is contending with high commodity price risk amid rising operational expenses.
Yelp (YELP) Hurt by Falling Delivery, Rising Competition
Per the Zacks analyst, declining food take-out and delivery order volumes due to reopening of economies is hurting transaction revenues. Competition from Google and Facebook is a major threat to Yelp.
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Sanofi (SNY) : Free Stock Analysis Report
Abbott Laboratories (ABT) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
BlackRock, Inc. (BLK) : Free Stock Analysis Report
Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
