Friday, May 27, 2022
The Zacks Research Daily presents the best research from our team of analysts. Today’s Research Daily features new research reports on 16 major stocks, including Meta Platforms, Inc. (FB), Visa Inc. (V) and Verizon Communications Inc. (VZ). These research reports have been selected from the approximately 70 reports published today by our team of analysts.
You can view all current research reports here >>>
meta platforms Stocks are down -41.7% over the past year, compared to the -59.0% fall in the Zacks Internet – Software Industry and the -4.4% fall in the broader S&P 500 Index. Changes to Apple’s iOS and exposure-related headwinds weigh on the stock. Apple’s iOS changes have made ad targeting more difficult, which in turn has increased the cost of driving results. Measuring these outcomes has also become difficult. Meta expects these factors to weigh on ad revenue growth throughout 2022. Meta’s guidance for the second quarter reflects macroeconomic and FX concerns. Cost inflation and supply chain disruptions are expected to impact advertiser budgets.
However, Meta is benefiting from steady user growth across all regions, particularly Asia Pacific. Increased engagement with its products such as Instagram, WhatsApp, Messenger and Facebook has been a key growth driver.
(You can Read the full research report on Meta Platform here >>>)
Visas Shares are down -7% over the past year, while competitor Mastercard is down -1.7% and the Zacks financial transaction services industry is down -31.6%. The company’s market-leading position offers a degree of stability and visibility in the current uncertain environment, but still faces a number of near-term challenges, including weak margin prospects as a result of rising operating expenses and the negative impact of ramping up customer incentives for revenue growth and engagement in the situation between Russia and Ukraine.
However, numerous acquisitions and alliances paved the way for long-term growth and drove sales sustainably. The company’s investments in technology solidify its position in the payments market. Switching payments to the digital mode is a blessing. The launch of coronavirus vaccines and the gradual revival of consumer confidence will further boost spending and in turn increase business volume. The company remains committed to increasing shareholder value based on its strong cash position. His balance sheet strength is commendable.
(You can Read the full Visa research report here >>>)
Verizon Communications Shares are down -5.2% over the past year while the Zacks Wireless National industry is down -5.3%. The company offered a muted outlook for 2022 due to the challenging macroeconomic environment. A highly competitive market and heavy spending on promotions and lucrative discounts to attract customers are likely to hurt profitability. High auction costs for mid-band spectrum are likely to further impact margins.
However, the company plans to accelerate the availability of its 5G ultra-broadband network with C-band deployment, which will cover 175 million people by the end of 2022. Its growth strategy includes 5G mobility, nationwide broadband and mobile edge computing and business solutions. Verizon is building the entire network infrastructure to bring customers the most amazing 5G experience. It offers various mix-and-match pricing for both wireless and home broadband plans, which has resulted in solid customer access.
(You can Read the full Verizon research report here >>>)
Other notable reports we feature today include JPMorgan Chase & Co. (JPM), United Parcel Service, Inc. (UPS) and Canadian Natural Resources Limited (CNQ).
Director of Research
Note: Sheraz Mian heads up Zacks Equity Research and is a respected expert on total returns. He is frequently quoted in print and electronic media and edits the weekly newspaper earnings trends and result preview reports. If you would like an email notification every time Sheraz publishes a new article, please click here>>>
Must read today
Solid user base, Instagram Strength Aid Meta Platforms (FB)
Visa (V) continues with improving sales and solid balance sheet
Verizon (VZ) benefits from growth in wireless subscribers and 5G traction
Higher interest rates, loan assistance JPMorgan (JPM), fee income a concern
According to the Zacks analyst, higher interest rates, solid credit demand, strategic acquisitions, opening new offices and digitizing operations are helping JPMorgan amid the challenges of fee income growth and rising costs.
E-commerce, dividends and buybacks boost UPS, cost issues disrupt
The Zacks analyst is impressed with the company’s efforts to reward its shareholders. Ecommerce growth is a bonus. However, escalated operating expenses limit earnings growth.
Investments in infrastructure and clean assets Aid Dominion (D)
According to the Zacks analyst, Dominion’s planned $37 billion investment through 2026 to improve clean power generation and strengthen its infrastructure will boost its profitability.
KLA (KLAC) benefits from growing Foundry/Logic investments
According to the Zacks analyst, KLA benefits from increasing investments across multiple nodes. This is driving growth in the Foundry/Logic market.
Dow (DOW) profits from cost actions, project investments
According to the Zacks analyst, Dow is well positioned to benefit from cost synergy savings and productivity initiatives, as well as its investments in high-return growth projects.
Fastenal (FAST) benefits from higher market demand, high costs
According to the Zacks analyst, improved volumes on most products to traditional manufacturing and construction customers have helped Fastenal. However, higher product and freight inflation is a risk
Teva (TEVA) could return to growth amid opioid litigation
With operational efficiencies/fundamentals improving and significant debt reduction, the Zacks analyst says Teva could return to growth in a couple of years. Opioid lawsuits and Justice Department investigations are a cause for concern.
Diverse production mix supports Canadian Natural (CNQ)
The Zacks analyst believes Canadian Natural’s diverse production mix of synthetic oil, heavy crude, natural gas and light crude enhances long-term value and reduces the risk profile.
Capacity expansion, cost reduction for Aid Albemarle (ALB)
According to the Zacks analyst, Albemarle should benefit from its moves to increase its global lithium derivatives capacity. Its cost-saving measures will also support margins.
An expanded portfolio continues to support AMN Healthcare (AMN).
The Zacks analyst is bullish on AMN Healthcare’s expanded portfolio, which serves a diverse and growing need for healthcare professionals. The recent acquisition of Connectics USA also gives cause for optimism.
Xerox (XRX) suffers from lower demand for paper-related products
The Zacks analyst believes falling demand for paper-related systems and products due to technological advances will hurt Xerox.
Higher freight costs hurt Abercrombie’s (ANF) gross margins.
According to the Zacks analyst, the volatile supply environment and higher freight costs have weighed on Abercrombie’s gross margin. Higher costs are expected to provide headwinds throughout fiscal 2022.
Margin Pressure, Increased Costs Hurt Hilltop Holdings (HTH)
According to the analyst at Zacks, Hilltop Holdings could continue to see margin pressures due to relatively low interest rates in the short term, despite expected rate hikes. Higher costs could reduce profits.
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JPMorgan Chase & Co. (JPM): Free Stock Research Report
Visa Inc. (V): Free Stock Research Report
Verizon Communications Inc. (VZ): Free Stock Research Report
United Parcel Service, Inc. (UPS): Free Stock Research Report
Canadian Natural Resources Limited (CNQ): Free Stock Research Report
Meta Platforms, Inc. (FB): Free Stock Research Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.