Top Research Reports for Berkshire Hathaway, Adobe & Alibaba
Tuesday, September 5, 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 Berkshire Hathaway Inc. (BRK.B), Adobe Inc. (ADBE) and Alibaba Group Holding Limited (BABA). 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 year-to-date period (+17.3% vs. +11.8%). The company is one of the largest property and casualty insurance companies measured by premium volume. Berkshire's inorganic growth story remains impressive with strategic acquisitions.
A strong cash position supports earnings-accretive bolt-on buyouts and indicates the 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 >>>)
Shares of Adobe have outperformed the Zacks Computer - Software industry over the year-to-date period (+67.4% vs. +41.3%). The company is benefiting from strong demand for its creative products. The company’s Creative Cloud, Document Cloud and Adobe Experience Cloud products are driving the top-line growth. Rising subscription revenues and solid momentum across the mobile apps are major positives.
Additionally, growth in emerging markets and robust online video creation demand remain tailwinds. Additionally, solid demand for Adobe’s commerce offerings and growing adoption of Acrobat. We remain optimistic about Adobe’s market position, compelling product lines and continued innovation.
However, the ongoing tensions between Russia and Ukraine remain major headwinds for Digital Media segment. Also, high acquisition expenses do not bode well for its margin expansion.
(You can read the full research report on Adobe here >>>)
Alibaba shares have gained +7.9% over the year-to-date period against the Zacks Internet - Commerce industry’s gain of +43.9%, reflecting the macroecnomic uncertainty surrounding its home maket. The company’s solid momentum across the China and international commerce retail businesses is driving its top-line growth. Notably, China commerce retail business is driven by rising online physical goods GMV at Taobao and Tmall.
Further, International retail business is riding on solid combined order growth. Moreover, strength across the Cainiao logistics services, owing to robust domestic consumer logistics and international fulfillment solution services is a plus.
This apart, strength across cloud computing business and local services is a tailwind. However, macroeconomic uncertainties are concerns. Additionally, normalization of cloud demand as offline activities are resuming, is an overhang.
(You can read the full research report on Alibaba here >>>)
Other noteworthy reports we are featuring today include Novartis AG (NVS), Blackstone Inc. (BX) and Mitsubishi UFJ Financial Group, Inc. (MUFG).
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 Insurance Business Aid Berkshire (BRK.B), Cat Loss Ail
Adobe (ADBE) Rides on Growing Adoption of Cloud Applications
Retail & Cloud Businesses Momentum Benefits Alibaba (BABA)
Featured Reports
Entresto, New Drugs Fuel Novartis (NVS) Amid Competition
Per the Zacks analyst, drugs like Entresto, Kesimpta, Zolgensma, Kisqali and Leqvio continue to fuel Novartis' growth. However, generic competition and pipeline setbacks remain concerns.
Inflows Aid Blackstone's (BX) Asset Growth, High Costs a Woe
Per the Zacks analyst, net inflows, diversified products and revenue mix will likely drive Blackstone's assets under management growth. Higher costs due to investments in franchise might hurt profits.
Inorganic Moves Aid Mitsubishi (MUFG) Amid Low Interest Rates
Per the Zacks analyst, Mitsubishi UFJ's inorganic growth efforts are aimed at further expansion of its retail business in Asia. Yet, domestic low-rate environment is a woe for NII growth.
Mondelez (MDLZ) Gains on Solid Chocolate & Biscuit Categories
Per the Zacks analyst, Mondelez has been gaining on its focus on expanding the core chocolate & biscuit categories. Both these categories registered double-digit growth in the second quarter of 2023.
HVAC & Controls Aids Johnson Controls (JCI) Amid Cost Woes
The Zacks analyst is encouraged by continued improvement in HVAC & Controls within the Building Solutions North America unit. However, rising cost of sales pose a threat to the company's bottom line.
Aptiv (APTV) Gains From Wind River Buyout, Rising Costs Ail
Per the Zacks analyst, the Wind River acquisition has expanded Aptiv's position in the automotive software solutions market. Rising expenses remain a concern.
Telefonica (TEF) To Benefit From Strong Product Portfolio
Per the Zacks analyst, Telefonica's performance benefitted from strong revenue growth across Telefonica Brasil and Tech business segment. However, stiff competition is a major concern
New Upgrades
MercadoLibre (MELI) Gains From Total Payment Volume Growth
Per the Zacks analyst, MercadoLibre benefits from solid total payment volume growth which is driven by strong momentum across Mercado Pago and mobile-point-of-sale business.
Central Garden & Pet's (CENT) Garden Unit is Performing Well
Per the Zacks analyst, Central Garden & Pet's Garden unit net sales grew 2% in third quarter. Strength in Live Goods, Packet Seed and Wild Bird helped offset soft sales in Distribution and Grass Seed.
Meritage Homes' (MTH) Focus on Entry-Level Buyers Bodes Well
The Zacks analyst stresses, Meritage Homes' strategic shift to a pure-play entry-level and first-move-up builder is expected to yield higher absorptions.
New Downgrades
Huge Debt Load, Rising Expenses Likely to Hurt BP's Margins
Per the Zacks analyst, BP's debt-laden balance sheet can lead to volatile earnings, limiting its financial flexibility. The company's rising exploration expenses are also concerning.
Labor Costs, Poor Financials Hurt Spirit AeroSystems (SPR)
Per the Zacks analyst, labor and supply-chain cost growth on the B787 program as well as forward loss related to these might hurt Spirit AeroSystems. It also boasts a weak financial position
BioPharma Softness, Inflationary Costs Ail Bio-Rad (BIO)
The Zacks analyst is worried about Bio-Rad's Life Science business affected by the weaker demand from BioPharma and continued soft sales in emerging biotech companies. Higher costs dent gross margin.
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Blackstone Inc. (BX) : Free Stock Analysis Report
Novartis AG (NVS) : Free Stock Analysis Report
Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
Adobe Inc. (ADBE) : Free Stock Analysis Report
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
Mitsubishi UFJ Financial Group, Inc. (MUFG) : Free Stock Analysis Report
