Friday, January 20, 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 Exxon Mobil Corp. (XOM), Fomento Económico Mexicano, SAB de CV (FMX) and Prologis, Inc. (PLD). 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 >>>
Shares of Exxon Mobil have outperformed the Zacks Oil and Gas – Integrated industry over the past year (+52.0% vs. +31.8%). The company’s bellwether status and an optimal integrated capital structure that has historically produced industry-leading returns make it a relatively lower-risk energy sector play.
Exxon Mobil has made more than 30 discoveries in offshore Guyana since 2015. Exxon Mobil also has a strong presence in the prolific Permian Basin, where it delivered record production in the third quarter. Considering the low cost of production in both assets, it will continue to generate handsome returns. Also, a strong presence in chemicals and refining operations is noteworthy.
However, the company has constantly been bearing the brunt of increasing expenses, adversely affecting its income. Also, the integrated energy giant’s financials were weakened by years-long significant spending on low-return developments and the coronavirus pandemic.
(You can read the full research report on Exxon Mobil here >>>)
Shares of Mexican Economic Development have outperformed the Zacks Beverages – Soft Drinks industry over the past year (+2.7% vs. +0.5%). The company’s revenues improved year over year, driven by gains across all business units resulting from effective growth strategies and robust demand across markets. Its bottom line surpassed the Zacks Consensus Estimate in Q3, while the revenues lagged.
FEMSA’s digital initiatives and business expansion endeavors have also been helping results. Its efforts to expand in the US specialized distribution segment bodes well. The company displays strong financial flexibility.
However, FEMSA continued to witness gross margin decline due to contraction at Proximity, Health, Fuel, Logistics & Distribution and Coca-Cola FEMSA segments. Supply-chain disruptions and higher raw material costs hurt results.
(You can read the full research report on Formento Economico Mexicano here >>>)
Prologis’ shares have underperformed the Zacks REIT and Equity Trust – Other industry over the past year (-21.3% vs. -16.8%). The company is facing rising supply of industrial real estate in several markets is likely to intensify competition and curb pricing power. Rising interest rates add to its woes. The recent estimate revision trend for 2023 funds from operations (FFO) per share indicates an unfavorable outlook.
However, Prologis’ fourth-quarter 2022 results reflected healthy leasing activity with solid rent growth. Given its capacity to offer high-quality facilities in key markets, the firm is poised to capitalize on the favorable industrial real estate industry trends.
Along with the fast adoption of e-commerce, this asset category is set to gain from a likely rise in inventory levels. Hence, with a healthy operating platform, strategic buyouts and a solid balance sheet, it is expected to prosper.
(You can read the full research report on Prologis here >>>)
Other noteworthy reports we are featuring today include Chubb Ltd. (CB), Marsh & McLennan Companies, Inc. (MMC) and Becton, Dickinson and Co. (BDX).
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 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
ExxonMobil (XOM) Gains From Discoveries at Stabroek Block
Continued Digital Investments to Drive FEMSA’S (FMX) Growth
Expansion Moves Amid Industry Tailwinds to Aid Prologis (PLD)
Featured Reports
Better Pricing, New Business Growth Drive Chubb Limited (CB)
Per the Zacks analyst, Chubb is set to grow on better pricing, new business growth and high renewal rates. However, exposure to cat loss induces earnings volatility while rising costs weigh on margins
Rising Revenues Aid Marsh & McLennan (MMC) Amid High Expenses
Per the Zacks analyst, its increasing top line, courtesy of diverse product offerings and solid client retention rates, has led to significant growth. However, higher costs might hamper margins.
A Slew of Product Launches Aid BD (BDX) Amid Stiff Competition
The Zacks analyst is upbeat about BD’s series of product launches over the past few months despite its operation in a highly competitive market.
Acquisitions to Aid Heico (HEI), Supply Chain Issue Woes
Per the Zacks analyst, disciplined acquisition strategy has been driving Heico’s overall performance. However, supply chain disruptions have been impacting the company’s material prices
Digital Prowess Aids Interpublic (IPG), Seasonality Aids
Per the Zacks analyst, Interpublic has been enhancing its digital capabilities to maintain growth in the dynamic media sector. Seasonality has a major impact on its business in the first quarter.
Qorvo (QRVO) Rides on Manufacturing Scale, Portfolio Strength
Per the Zacks analyst, Qorvo is well-poised for long-term growth by leveraging its diversified portfolio, systems-level expertise, manufacturing scale and internal assembly and test capabilities.
CyberArk (CYBR) Benefits From Strategic Buyouts & Deal Wins
Per the Zacks analyst CyberArk is benefiting from its strategic acquisitions like IDaptive Holding and Vaultive. Also deal wins in new as well as add-on business mostly from advisory firm are tailwind
New Upgrades
Acquisitions, Strong Demand to Aid Reliance Steel (RS)
According to the Zacks analyst, the company will gain from strong demand in the majority of its end markets and its strategy to drive operating results by acquiring high-quality businesses.
Solid Demand, Margin Expansion Efforts to Aid OI Glass (OI)
Per the Zacks analyst, OI Glass will gain from the growing consumer preference for glass as the healthy, premium and sustainable packaging option. Its margin-expansion initiative will aid earnings.
Growing International Activity to Aid Oceaneering (OII)
The Zacks analyst believes that the outlook for Oceaneering International’s ‘Subsea Robotics’ unit is particularly impressive due to growing activity outside North America.
New Downgrades
High Non-Interest Expenses Hurt Signature Bank (SBNY) Growth
Per the Zacks analyst, Signature Bank is suffering from escalating non-interest expenses as well as costs related to private client banking team expansion.
High Labor Costs Key Headwind for Fresenius Medical Care (FMS)
Per the Zacks analyst, Fresenius Medical Care’s sales were adversely affected by the strong US dollar in the third quarter. The company estimates the impact of currency movement to be $300 million for 2022.
Increased Incentive and IT Expenses Hurt Jacobs’ (J) Growth
As per the Zacks analyst, increased incentive expenses, IT investments and cutthroat industry competition affect Jacobs’ (J) potential growth.
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Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
Prologis, Inc. (PLD) : Free Stock Analysis Report
Becton, Dickinson and Company (BDX) : Free Stock Analysis Report
Chubb Limited (CB) : Free Stock Analysis Report
Fomento Economico Mexicano SAB de CV (FMX) : Free Stock Analysis Report
Marsh & McLennan Companies, Inc. (MMC) : Free Stock Analysis Report
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