Thursday, October 20, 2022
Zacks Research Daily presents the best research results of our analyst team. Today’s Research Daily features new research reports on 12 major stocks, including Intuit Inc. (INTU), Diageo plc (DEO) and Sony Group Corp. (SONY). These research reports have been selected from around 70 reports published by our analyst team today.
You can do it see all research reports today here >>>
Intuit shares underperformed the Zacks Computer – Software industry over the year (-37.3% vs. -32.2%). The company faces macroeconomic and geopolitical headwinds that could harm small business operations, thereby posing risks for Intuit’s top-line growth. Additionally, higher costs and expenses due to increased investment in marketing and engineering teams will likely continue to impact bottom line results in the near term.
However, Intuit is benefiting from strong momentum in its online revenue ecosystem and solid professional tax revenue. The TurboTax Live offering is also driving growth in the Consumer tax business. Solid momentum in the company’s lending product, QuickBooks Capital, remains positive.
Moreover, the company’s strategy of moving its business to a cloud-based subscription model will help generate stable revenues in the long term. We expect Intuit’s earnings to grow at a CAGR of 14.66% through fiscal 2023-2025.
(You can do it read the full Intuit research report here >>>)
to Diageo shares have underperformed the Zacks Beverages – Alcohol industry over the past year (-17.8% vs. -7.1%). Continued inflationary pressure and currency headwinds are a concern for the company. However, recovery in the on-trade channel, strong consumer demand in the off-trade and market share gains helped Diageo’s fiscal 2022 results.
It witnessed sales, operating margin and earnings growth driven by organic sales growth in all regions. Price/mix derived from a positive mix due to robust growth of super-premium-plus brands, particularly scotch, tequila and Chinese white spirits.
DEO’s margin trends turned favorable in fiscal 2022, thanks to premiumization efforts, recovery in markets, pricing actions and supply productivity savings, which mostly offset cost inflation. It provided a decent outlook for fiscal 2023, with expected net sales growth across North America, Europe and Asia-Pacific.
(You can do it read the full Diageo research report here >>>)
to Sony shares are down -41.7% over the past year versus the Zacks Audio Video Production industry’s decline of -42.3%. Due to weak macro-economic conditions, the company cut its operating profit guidance for fiscal 2022.
Operating income is expected to fall 8% against a previously expected decline of 3.5%. The company expects that the operating margin is likely to be affected by the decrease in revenue in the Game & Network Services operating unit. Fierce competition and high cost of goods sold cause concerns.
However, Sony’s performance derives from continued strength in the Music and Pictures segments. The company remains focused on the premium segment of branded products in the market to maximize growth.
For fiscal 2022, the company now expects sales to increase 16% due to higher sales of the Music, Pictures and E&TS segment. Strategic acquisitions and joint ventures bode well for the long term. The company continues to expect 18-million-unit sales for its PlayStation 5
(You can do it read the full Sony research report here >>>)
Other notable reports we’re featuring today include ServiceNow, Inc. (NOW), The Southern Co. (SO), and Boston Scientific Corp. (BSX).
Mark Vickery
Senior Editor
Note: Sheraz Mian heads the Zacks Equity Research department and is a renowned expert on consolidated returns. He is frequently quoted in print and electronic media and publishes weekly Income Trends and Earnings Preview reports. If you would like an email notification whenever Sheraz publishes a new article, please click here>>>
Must Read Now
Intuit (INTU) Rides on Product Refresh, Higher Subscriptions
Diageo (DEO) Focuses on Premium Brands to Drive Growth
Higher Profits in Music and Pictures Sales SONY Amid Rising Costs
Featured Reports
Growing Customer Base and Partnerships Aid ServiceNow (NOW)
According to the Zacks analyst, ServiceNow is benefiting from increasing use of its workflows by companies undergoing digital transformation. Also, strategic alliances with the likes of Microsoft are a tailwind.
New Buyouts Aid Boston Scientific (BSX), Core CRM Grows
According to the Zacks analyst, Boston Scientific is gaining from its strategic purchases of Preventice, Farapulse and Lumenis Surgical. In core Cardiac Rhythm Management (CRM), stronger S-ICD sales aid growth.
Arthur J. Gallagher (AJG) Buyouts Aid, Cost Woes Linger
According to the Zacks analyst, several acquisitions have helped Arthur J. Gallagher improve its capabilities and drive growth. However, high costs remain an overhang.
Fastenal (FAST) Gains From E-Commerce, Inflation Hurts
According to the Zacks analyst, the continued improvement of daily sales through e-commerce will drive Fastenal’s growth. However, inflationary pressures, tight supply chains and labor shortages are risks.
Sustainable Investment and Renewable Focus Aid Eversource (ES)
According to the Zacks analyst, Eversource’s investment of $18.1 billion over the 2022-2026 time period will boost clean power generation, strengthen its infrastructure and increase its service reliability
Customer Retention Aid Rollins (ROL), Rising Costs Ail
According to Zacks analyst, Rollins’ organic revenue growth rate is healthy driven by strong technician and customer retention. Rising costs remain a concern.
Intra-Cellular (ICPT) Evolved in Caplyta, Overdependence a Concern
According to Zacks analyst, Intra-Cellular’s CNS disorder drug Caplyta has witnessed higher sales and strong usage since approval. However, Caplyta’s only hope for earnings remains a headwind.
New Upgrades
Southern Company (SO) Built by Regulated Customer Growth
The Zacks analyst believes that continued growth in Southern Company’s regulated business customer base should support its earnings growth.n
Tapestry’s (TPR) Strong Digital Endeavors to Boost Sales
According to the Zacks analyst, Tapestry is directing resources toward expanding digital and data analytics capabilities. In the fourth quarter, global digital sales rose in the high single digits.
Higher Rate, Loan Demand Support Washington Federal (WAFD)
According to the Zacks analyst, higher interest rates, steady growth in loan demand and a solid balance sheet and liquidity position will likely continue to help Washington Federal’s top line growth.
New Downgrades
SM Energy (SM) Will Accept Potential Loss Through Hedging
Despite a strong hedging position, SM Energy is likely to incur significant hedging losses due to high commodity prices. This may affect the future generation of cash flow, according to the Zacks analyst.
Higher Costs, Weaker Demand Ail ArcelorMittal (MT)
According to the Zacks analyst, higher iron ore, coal and energy costs will weigh on the company’s margins. A slowdown in global steel demand is also a concern.
Supply Chain Constraints Hurt Philips’ ( PHG ) Prospects.
According to the Zacks analyst, global supply chain challenges, rising inflation and the Russia-Ukraine war have hurt Philip’s high-margin business segments, negatively impacting growth prospects.
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Southern Company The (SO): Free Stock Analysis Report
Boston Scientific Corporation (BSX) : Free Stock Analysis Report
Intuit Inc. (INTU) : Free Stock Analysis Report
Diageo plc (DEO) : Free Stock Analysis Report
ServiceNow, Inc. (NOW): Free Stock Analysis Report
Sony Corporation (SONY) : Free Stock Analysis Report
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