Top Research Reports for Alibaba, PepsiCo & ConocoPhillips
Tuesday, August 1, 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 Alibaba Group Holding Limited (BABA), PepsiCo, Inc. (PEP) and ConocoPhillips (COP). 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 >>>
Alibaba shares have outperformed the Zacks Internet - ecommerce industry over the past year (+8.1% vs. +3.7%) as well as Amazon (+8.1% vs. -1.1%). The company’s solid momentum across the international commerce retail businesses is driving its top-line growth.
The Zacks analyst expects Alibaba’s revenues to increase +4.4% in fiscal 2024 on a year-over-year basis. Strength in Trendyol, Lazada and AliExpress continues to contribute well.
Additionally, solid momentum across financial services, education and automobile industries remains a positive for the company’s cloud business. This apart, strength across the local consumer services and Cainiao logistics services, Alibaba Health and Freshippo is contributing well.
However, weak in China microenvironment is a headwind. Sluggish China commerce business is a concern. Additionally, softness in digital media business is a headwind. Rising expenses associated with new initiatives are overhangs.
(You can read the full research report on Alibaba here >>>)
Shares of PepsiCo have outperformed the Zacks Beverages - Soft drinks industry over the past six months (+12.4% vs. +9.8%). The company reported the seventh straight quarter of double-digit organic revenue growth in the second quarter.
The results reflect strength and resilience in its diversified portfolio, modernized supply chain, improved digital capabilities, flexible go-to-market distribution systems and robust consumer demand trends. Resilience and strength in the global beverage and convenient food businesses also aided results.
However, PepsiCo witnessed cost pressures driven by impacts of supply-chain disruptions and inflationary labor, transportation and commodity costs. Adverse currency rates also remain headwinds.
(You can read the full research report on PepsiCo here >>>)
Shares of ConocoPhillips have outperformed the Zacks Oil and Gas - Integrated - United States industry over the past year (+30.0% vs. +20.6%). The company holds a bulk of acres in the unconventional plays of Eagle Ford shale, Permian Basin and Bakken shale. Significant opportunities are there for the company in the Bakken Shale, where it owns about 750 undrilled locations that could provide access to huge reserves.
ConocoPhillips projects its 2023 production at 1.78-1.8 MMBoe/d, suggesting an increase from 1.74 MMBoe/d last year. COP’s balance sheet is significantly less leveraged than the industry it belongs to. Additionally, the company announced its 2023 planned return of capital to shareholders of $11 billion.
However, ConocoPhillips is highly exposed to oil price fluctuations, which makes things challenging for the company. Also, the company been generating lower dividend yield than the industry for the past few years. As such, the stock warrants a cautious stance.
(You can read the full research report on ConocoPhillips here >>>)
Other noteworthy reports we are featuring today include QUALCOMM Incorporated (QCOM), Lockheed Martin Corporation (LMT) and 3M Company (MMM).
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
Wholesale & Cloud Businesses Momentum Aids Alibaba (BABA)
PepsiCo's (PEP) Investments in Business Drive the Top Line
ConocoPhillips (COP) Banks On Oil-Rich Bakken Shale Assets
Featured Reports
Qualcomm (QCOM) Rides on 5G Traction, Automotive Strength
Per the Zacks analyst, Qualcomm is likely to benefit from a healthy 5G traction, greater visibility and a diversified revenue stream along with solid momentum in IoT and automotive sectors.
Order Growth Boosts Lockheed (LMT), Tiff With Turkey Ails
Per the Zacks analyst, steady order flow continues to boost Lockheed's revenue growth. Yet, the U.S. government's tiff with Turkey over its involvement in Russia's S-400 may hurt F-35 program.
Cost Controls to Back 3M (MMM) Amid Demand Softness
Per the Zacks analyst, cost-controls and restructuring actions are expected to help 3M stay afloat as it grapples with lower disposable respirator and consumer electronics demand.
McKesson's (MCK) Deals Buoys Optimism Amid Sluggish Market
Per the Zacks analyst, McKesson has been pursuing deals and acquisitions to drive growth. It is a dominant player in the Distribution market which is facing weaker generic pharmaceutical pricing trend
MasTec (MTZ) Rides on Solid Backlog Level Amid High Costs
Per the Zacks analyst, solid backlog trend, accretive buyouts and focus on non-Oil and Gas segments aid MasTec. However, ongoing inflation, project delays, labor shortage are pressing concerns.
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.
Dullness in Home-Furnishings Space Ails Overstock.com (OSTK)
Per the Zacks analyst, Overstock.com is suffering from weakness in the home-furnishing market. Stiff competition, particularly from Wayfair, its nearest peer in home furnishing, is a concern.
New Upgrades
Solid Cash App Adoption & Square Ecosystem Aid Block (SQ)
Per the Zacks analyst, Block is benefiting from strong Cash App engagement and its growing active customer base. Further, the company's growing momentum across Square Ecosystem remains a positive.
Air-Travel Demand & Fleet Upgrade Aid United Airlines (UAL)
The Zacks analyst is impressed with United Airlines' efforts to modernize its fleet. Also, rising air-travel demand is a tailwind.
Murphy USA (MUSA) Gains from Proximity to Walmart Stores
The Zacks analyst likes the proximity of Murphy USA's fuel stations to Walmart supercenters and the consistent traffic that these stores attract, thereby driving above-average fuel sales volume.
New Downgrades
COVID-19 Impacts & Weak Solvency Hurt Hawaiian Electric (HE)
Per the Zacks analyst, Hawaiian Electric's liquidity may continue to be moderately impacted due to higher fuel prices and lingering COVID-19 impact. Also, its weak solvency position remains a concern.
Higher Costs, Subdued Mortgage Business Hurt Synovus (SNV)
Per the Zacks analyst, mounting expenses are likely to limit Synovus' bottom-line growth. Huge commercial loan concentration and dismal mortgage business are other major headwinds.
Weak Demand, Higher Input Costs Ail Chemours (CC)
Per the Zacks analyst, weaker demand in the company's Titanium Technologies unit will hurt volumes. Higher raw material costs will also weigh on its margins.
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Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
ConocoPhillips (COP) : Free Stock Analysis Report
3M Company (MMM) : Free Stock Analysis Report
PepsiCo, Inc. (PEP) : Free Stock Analysis Report
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
