Top Analyst Reports for Salesforce, BP & Southern Co.
Wednesday, May 8, 2024
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 Salesforce, Inc. (CRM), BP p.l.c. (BP) and The Southern Co. (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 >>>
Shares of Salesforce have outperformed the Zacks Computer - Software industry over the past year (+37.9% vs. +33.4%). The company is benefiting from a robust demand environment as customers are undergoing a major digital transformation. Its sustained focus on aligning products with customer needs is driving the top line.
Continued deal wins in the international market are another growth driver. The buyout of Slack has positioned the company as a leader in enterprise team collaboration and improved its competitive standing versus Microsoft Teams. Salesforce’s strategy of continuously expanding generative AI offerings will help it tap the growing opportunities in the space.
However, stiff competition and unfavorable currency fluctuations are concerns. Also, softening IT spending amid ongoing macroeconomic uncertainties could hurt its growth prospects.
(You can read the full research report on Salesforce here >>>)
BP’s shares have gained +6.4% over the past year against the Zacks Oil and Gas -- Integrated -- International industry’s gain of +11.2%. The company has a strong portfolio of upstream projects, supporting notable growth in production. The integrated energy company exhibits robust upstream growth with the start-up of major projects like Seagull, which boosts its production capacity.
Diversification into renewables through the Lightsource BP acquisition supports long-term sustainability amid energy transitions. The divestment strategy aims to reach $25 billion by 2025, enhancing the balance sheet and returning capital to shareholders.
However, a high debt-to-capitalization ratio raises financial flexibility and balance sheet concerns. Also, despite resolving significant litigation expenses from the 2010 oil spill, BP had to sell valuable assets. These divestitures could potentially limit future cash generation. Refining margins may face pressure due to narrower crude differentials.
(You can read the full research report on BP here >>>)
Southern Company’s shares have outperformed the Zacks Utility - Electric Power industry over the past year (+7.2% vs. +1.7%). The company is leveraging the demographics of its operating territories, as in healthy population and job growth, it has gradually increased its customer base.
With good rate base growth, constructive regulation, and with the power supplier’s recent success in bringing the Vogtle nuclear project online, Southern is expected to generate steady earnings and dividend growth going forward.
However, the utility’s high leverage restricts financial flexibility, while an increased focus on nuclear energy could face opposition amidst growing environmental concerns. As it is, the utility sector remains sensitive to interest rate fluctuations and market sentiment. 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 PayPal Holdings, Inc. (PYPL), Arthur J. Gallagher & Co. (AJG) and Edwards Lifesciences Corp. (EW).
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 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
Salesforce (CRM) Rides on Portfolio Strength and Buyouts
Key Upstream Projects Benefit BP, Refining Margins Weak
Southern Company (SO) Buoyed by Regulated Customer Growth
Featured Reports
PayPal (PYPL) Benefits From Increasing Total Payment Volume
Per the Zacks analyst, PayPal's total payment volume is rising owing to solid adoption of Venmo and merchant services. Further, growing momentum across PayPal Checkout experiences is positive.
Improving Fees and Commissions Aid Arthur J. Gallagher (AJG)
Per the Zacks analyst, Arthur J. Gallagher is poised to grow on improving fees and commissions that in turn is driving organic revenues growth. However, rising expenses weighing on margin concerns.
Edwards (EW) Rides on Solid TMTT Arm Growth Amid Forex Woes
The Zacks analyst is impressed with Edwards's TMTT segment growth in the first-quarter 2024 led by expanded adoption and new site activation of PASCAL system. Foreign exchange woes remain a concern.
Kimberly-Clark's (KMB) Cost-Cutting Aid Amid Rising Costs
Per the Zacks analyst, Kimberly-Clark has been taking robust steps to lower costs amid inflationary pressure. The company generated nearly $120 million in gross productivity in the first quarter.
Cost Actions and Project Investment Aid Dow (DOW)
Per the Zacks analyst, Dow will benefit from cost synergy savings and productivity initiatives and its investment in high-return growth projects amid headwinds from weaker demand in Europe.
Cummins (CMI) Rides on Meritor Acquisition Amid Cost Woes
While the buyout of Meritor has strengthened Cummins' Components business, the Zacks analyst is worried about the firm's high SG&A and R&D costs, which are likely to limit margins.
Solid Construction Demand & Buyout Plans Aid EMCOR (EME)
Per the Zacks analyst, EMCOR is benefiting from increased project flow under its Construction segments along with accretive acquisition strategies. This is reflected in its solid RPOs growth.
New Upgrades
United Therapeutics' (UTHR) PAH Portfolio Drives Growth
The Zacks Analyst believes that demand for United Therapeutics' PAH medicines is strong. Potential approvals for expanded use of Orenitram and Tyvaso and its pipeline can drive long-term growth
SkyWest's (SKYW) Fleet-Upgrade Initiatives Boost Prospects
SkyWest's fleet modernization program is praiseworthy. The Zacks analyst is also impressed by the company's shareholder-friendly approach.
Strategic Initiatives & Cash Collections Aid PRA Group (PRAA)
Per the Zacks Analyst, strategic initiatives like acquisitions and collaborations should enhance PRA Group's capabilities, positioning it well for growth. Improving cash collections also bode well.
New Downgrades
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
Qorvo (QRVO) Plagued by Margin Woes, Incessant Pricing Wars
Per the Zacks analyst, Qorvo is likely to be plagued by increased pricing pressure with low barriers to entry and soft demand trends for high-tech products owing to global macroeconomic uncertainty.
Bank of Hawaii (BOH) Hurt by High Costs & Low Fee Income
Per the Zacks analysts, Bank of Hawaii face challenges due to higher expenses and lower fee income. Additionally, lending portfolio concentration in the Hawaii region is another concern.
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Southern Company (The) (SO) : Free Stock Analysis Report
BP p.l.c. (BP) : Free Stock Analysis Report
Salesforce Inc. (CRM) : Free Stock Analysis Report
Edwards Lifesciences Corporation (EW) : Free Stock Analysis Report
Arthur J. Gallagher & Co. (AJG) : Free Stock Analysis Report
PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
