Top Research Reports for Berkshire Hathaway, Procter & Gamble & Southern Company

Monday, August 29, 2022

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 Berkshire Hathaway Inc. (BRK.B), The Procter & Gamble Company (PG) and The Southern Company (SO). 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 >>>

Berkshire Hathaway shares have outperformed the Zacks Insurance - Property and Casualty industry over the past year (+1.6% vs. -5.4%) and the -11.7% decline for the S&P 500 index. The company is one of the largest property and casualty insurance companies measured by premium volume, with an impressive growth-through-acquisitions track record characteristic of Warren Buffett. 

A strong cash position supports earnings-accretive bolt-on buyouts and indicates the company's financial flexibility. Continued insurance business growth fuels increase in float, drive earnings and generates maximum return on equity. The non-insurance businesses are delivering improved results with increased revenues over the past few years. A sturdy capital level provides further impetus.

However, exposure to catastrophe loss induces earnings volatility and also affects the property and casualty underwriting results of Berkshire. Huge capital expenditure remains a headwind for the company.

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

Procter & Gamble’s shares have outperformed the Zacks Soap and Cleaning Materials industry over the past year (+1.9% vs. -1.9%) on the back of a stable and improving business outlook despite macroeconomic headwinds. The company’s earnings and sales improved year over year in the latest quarterly report, with robust pricing and a favorable mix helping drive results. Improved productivity amid cost headwinds also aided the results.

Management issued a favorable view for fiscal 2023. It witnessed SG&A expense leverage, owing to savings from overhead and marketing expenses, and cost leverage gains due to higher sales and real estate.

However, unfavorable mix, commodity cost inflation, increase in freight costs, product and packaging investments and other impacts hurt margins. It expects higher commodity and freight costs to persist in fiscal 2023

(You can read the full research report on Procter & Gamble here >>>)

Southern Company’s shares have outperformed the Zacks Utility - Electric Power industry over the past year (+22.6% vs. +11.8%). The company is leveraging the demographics of its operating territories, as in healthy population and job growth, Southern Company has gradually increased its customer base.

With good rate base growth and constructive regulation, the power supplier is expected to generate steady earnings and dividend growth in the coming years. However, its elevated leverage, along with continued timing and cost overrun issues over its Vogtle project, are major overhangs.

While the electric utility holding company’s debt-to-capitalization of 60.8% restricts financial flexibility, its $25-billion Vogtle nuclear plant has already exceeded budget and is years behind schedule. Therefore, Southern Company warrants a cautious stance from the investors.

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

Other noteworthy reports we are featuring today include Uber Technologies, Inc. (UBER), Restaurant Brands International Inc. (QSR), and CBRE Group, Inc. (CBRE).

Sheraz Mian
 
Director of Research

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

Berkshire (BRK.B) Continues to Gain From Insurance Business

High Demand & Productivity Plan Drives P&G's (PG) Growth

Southern Company (SO) Buoyed by Regulated Customer Growth

Featured Reports

Uber (UBER) Rides on Delivery Business Amid Rising Expenses
The Zacks Analyst likes Uber's efforts to expand its Delivery operations in response to the surge in business. However rising costs and expenses are concerning as they pose a threat to its bottom line

Solid Comps Aid Restaurant Brands (QSR), High Cost Ail
Per the Zacks analyst, Restaurant Brands' solid expansion efforts, various sales building strategies and robust comps is likely to benefit Restaurant Brands. However, high cost hurts the company.

Growth in Occupier Outsourcing to Drive CBRE Group (CBRE)
Per the Zacks Analyst, improving occupier outsourcing business, strategic buyouts and solid balance sheet strength will aid CBRE Group. However, macroeconomic uncertainty is a key concern.

A Strong Specialty Lenses Suite Aids Cooper Companies (COO)
The Zacks analyst is upbeat about Cooper Companies' strength in the specialty lenses markets, supported by Biofinity and Clariti products, despite its operation in a tough competitive space.

Investments, Customer Growth Aid Essential Utilities (WTRG)
Per the Zacks analyst, Essential Utilities' (WTRG) $3 billion investment to fortify water and natural gas infrastructure and demand from expanding customer base are going to boost its performance.

Karuna Therapeutics' (KRTX) Pipeline Development Fuels Growth
While Karuna Therapeutics' progress with its pipeline is impressive, the Zacks Analyst is concerned about a lack of stable stream of income as the company has no marketed drugs in its portfolio.

Robust Bookings Growth Aids Bruker (BRKR) Amid High Costs
The Zacks analyst is optimistic about Bruker's impressive bookings growth in the BSI segment. However, mounting operating expenses continue to weigh on the company's bottom line.

New Upgrades

EPAM Systems (EPAM) Gains From Increase in Digital Spending
Per the Zacks analyst, EPAM Systems is gaining from a strong uptick in spending on digital transformation, which is further helping it grow across all its industry verticals and maximum locations.

Paylocity Holding (PCTY) Benefits From Growing Customer Base
Per the Zacks Analyst, Paylocity Holding is benefiting from its differentiated employee strategy, comprehensive product offerings and on-demand pay facility, that are helping it win new customers.

Dycom (DY) Banks on Telecommunication Business For Growth
Per the Zacks analyst, Dycom's business primarily benefits higher demand arising from broad constructions or enhancement of significant wireline networks across broad sections of the country.

New Downgrades

Rising Input Costs & High Capex Beset Oshkosh (OSK)
Per the Zacks analyst, Oshkosh's operating margins are strained by elevated raw material costs, worsened by the geopolitical conflict. Also, soaring capital expenditure is likely to dent cash flows.

Macro Weakness and Supply Troubles Ail Western Digital (WDC)
Per the Zacks analyst, Western Digital's performance is being affected by lower HDD shipments. Weak macroeconomic conditions, lingering supply-chain woes and component shortages remain concerns.

Conagra (CAG) Gross Margin Hurt by High Cost of Goods Sold
Per the Zacks analyst, Conagra's gross margin is being hurt by cost of goods sold inflation, which is likely to linger in fiscal 2023. In fourth quarter, adjusted gross margin fell 147 basis points.

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Southern Company The (SO) : Free Stock Analysis Report
 
Procter & Gamble Company The (PG) : Free Stock Analysis Report
 
Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
 
Restaurant Brands International Inc. (QSR) : Free Stock Analysis Report
 
CBRE Group, Inc. (CBRE) : Free Stock Analysis Report
 
Uber Technologies, Inc. (UBER) : Free Stock Analysis Report
 
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