Friday, July 8, 2022

Zacks Research Daily features top research results from our team of analysts. Today’s Research Daily features new research reports on 16 major stocks, including ExxonMobil Corp. (XOM), Alibaba Group Holding Ltd. (BABA) and The Charles Schwab Corp. (SCHW). These research reports have been handpicked from the approximately 70 reports published today by our team of analysts.

You can see all research reports from today here >>>

ExxonMobil shares have outperformed industry Zacks Oil and Gas – Integrated – International over the past year (+47.5% vs. +31.0%). The Zacks analyst believes the company’s leadership status and an optimal integrated capital structure that has historically produced industry-leading returns make it a relatively low-risk energy sector.

The company has made three oil discoveries in the Stabroek Block, which will increase its recoverable resource estimate to 11 billion barrels of oil equivalent. In addition, its debt exposure is significantly lower than that of other large integrated companies.

ExxonMobil increased its share buyback program from $10 billion to $30 billion. The company plans to run the buyouts through next year. However, the energy giant’s above-average capital expenditure program has investors worried.

In addition, the integrated energy major reported lower oil-equivalent production volumes, which could affect net income. As such, the title warrants a cautious stance.

(You can read the full research report on Exxom Mobil here >>>)

Ali Baba since the beginning of the year (+3.0% against -27.2%). The company’s fiscal fourth quarter results were driven by strong momentum across its retail business. Growing business in China and international trade remained positive.

In addition, the strength of cloud, Cainiao and local consumer services contributed well. In particular, its solid New Retail strategy, which is gaining ground in the market, remains a major asset. This contributes to the growth of the department stores Tmall Import, Freshippo and Intime.

Additionally, the company’s strengthening of the cloud business through expanding its customer base continues to drive its performance. However, the increasing competition from domestic and foreign e-commerce companies poses a serious risk. Additionally, regulatory concerns and the resurgence of COVID cases in China remain major headwinds.

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

Charles Schwab shares are down -8.2% over the past year against the industry decline of -18.9% Zacks Financial – Investment Bank. The Zacks analyst believes that despite recent rate hikes, relatively low interest rates will likely continue to hurt margins in the near term. High operating expenses could hamper the growth of the company’s results to some extent.

However, strategic acquisitions are likely to be accretive and have strengthened Schwab’s position as a major brokerage player. The commission-free trading offer has resulted in an increase in client assets and brokerage accounts, thereby improving trading revenue. Schwab’s efficient capital deployments reflect a strong balance sheet position, through which it will increase shareholder value.

(You can read the full research report on Charles Schwab here >>>)

Other noteworthy reports we feature today include The Home Depot, Inc. (HD), The Estée Lauder Companies Inc. (EL), and Automatic Data Processing, Inc. (ADP).

Marc Vickery
Senior Writer

Note: Sheraz Mian leads the equity research department at Zacks and is a well-known expert on overall earnings. He is frequently quoted in the written and electronic press and publishes the weekly Earnings Trends and Earnings Overview reports. If you would like to receive an email notification whenever Sheraz publishes a new article, please click here>>>

To read today

ExxonMobil (XOM) benefits from discoveries on the Stabroek block

Retail and cloud business momentum benefits Alibaba (BABA)

Helping Schwab (SCHW) Strategic Acquisitions with Cost Challenges

Featured Reports

Focus on business customers to help Home Depot’s top line (HD)
According to the Zacks analyst, Home Depot’s Pro segment has been a key driver of sales growth for several quarters. It is on track with investments to build a Pro ecosystem. Professional sales overtook DIY sales in the first quarter

The Estee Lauder Companies (EL) benefits from skincare sales
According to the Zacks analyst, The Estee Lauder Companies has enjoyed strong skincare sales for some time now. Category sales increased 6% year-over-year in the third quarter of fiscal 2022.

High recurring revenue helps ADP despite low current ratio
The Zacks analyst is optimistic about ADP’s strong business model, strong recurring revenue, strong margins and solid customer retention. Meanwhile, its low current ratio is a headwind.

Growing Demand for Energy Solutions Aid Generac (GNRC)
According to the Zacks analyst, Generac Holdings is profiting from its home standby generators and PWRcell energy storage system solutions. Supply chain issues and fierce competition remain a concern.

Markel (MKL) continues to benefit from strategic acquisitions
According to the Zacks analyst, the strategic acquisitions have helped Markel achieve profitable growth in insurance operations and build its bonding capabilities.

Zimmer Biomet (ZBH) sales rebound despite rising costs
The Zacks analyst is encouraged by Zimmer Biomet’s robust revenue growth in the US, thanks to the ongoing recovery from the impact of COVID-19. Yet escalating operating costs remain a concern.

Multi-Basin Assets and Cost Reduction Aid Murphy Oil (MUR)
According to the Zacks analyst, Murphy Oil’s focus on developing high-margin, multi-basin assets and ongoing cost-cutting initiatives will drive its long-term performance.

New upgrades

Strong Demand, Strategic Acquisitions Facilitate Additional Space (EXR)
According to the Zacks analyst, high brand value, favorable fundamentals in the self-storage industry, a strong presence in key cities and strategic acquisitions are the main growth drivers for Extra Space Storage.

Strong demand, Aid Ashland (ASH) cost reduction actions
According to the Zacks analyst, Ashland is enjoying strong demand in its industrial end markets. Actions to reduce operational costs should also support its margins.n

Apogee (APOG) Bets on Momentum in Segments, Pricing Stocks
According to the Zacks analyst, improved performance of architecture services and framing systems, pricing actions and benefits from recently completed restructuring actions will drive Apogee’s results.

New downgrades

Weaker demand for memory chips will hurt Micron (MU) sales
Weakening consumer spending on personal computers and smartphones is expected to negatively impact demand for Micron’s memory chips in the near term, the Zacks analyst said.

Rising Commodity Inflation Hurts Cheesecake Factory (CAKE)
Zacks analyst says rising commodity inflation and labor spending are hurting Cheesecake Factory. For fiscal 2022, the company expects low to mid double-digit commodity inflation on an annual basis.

Currency issues and current low ratio affect Omnicom (OMC)
The Zacks analyst is pessimistic about the decline in Omnicom’s current ratio (OMC). In addition, its vast international base exposes it to risks related to adverse fluctuations in exchange rates.

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Automatic Data Processing, Inc. (ADP): Free Inventory Analysis Report

Exxon Mobil Corporation (XOM): Free Stock Analysis Report

The Charles Schwab Corporation (SCHW): Free Stock Analysis Report

The Home Depot, Inc. (HD): Free Inventory Analysis Report

The Estee Lauder Companies Inc. (EL): Free Stock Analysis Report

Alibaba Group Holding Limited (BABA): Free Stock Analysis 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.