News

Tuesday, December 10, 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 Alphabet Inc. (GOOGL), Oracle Corporation (ORCL) and Merck & Co., Inc. (MRK), as well as two micro-cap stocks, Canterbury Park Holding Corporation (CPHC) and CompX International Inc. (CIX). These research reports have been hand-picked from roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Alphabet shares have lagged the broader Tech sector this year (+25.3% vs. +33.1%) as well as the S&P 500 index (+25.3% vs. +28.2%), mostly reflecting regulatory uncertainty. The Zacks analyst believes that the company’s Google Cloud Platform products are benefiting from accelerated growth across AI infrastructure, enterprise AI platform Vertex and generative AI solutions. Its dominant position in the search engine market is a strong growth driver. Major search updates and removal of bad ads to enhance the search results continue to boost traffic on Google’s search engine.

However, increasing litigation issues and expenses remain concerns. Rising cloud competition from Microsoft and Amazon is a concern.

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

Oracle shares have outperformed the Zacks Computer - Software industry over the past year (+65.4% vs. +23.4%). The Zacks analyst believes that solid adoption of strategic cloud applications, autonomous database offerings and Oracle Cloud Infrastructure and recovery in cloud revenue growth have been benefiting the company. The recent partnership with Amazon for Oracle Database@AWS and general availability of Oracle Database@Google bodes well.

Yet, higher spending on product enhancements, especially toward the cloud platform amid increasing competition in the cloud domain remain major causes of concern.

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

Shares of Merck have underperformed the Zacks Large Cap Pharmaceuticals industry over the past year (-0.5% vs. +12.9%). Per the Zacks analyst, generic competition for several drugs, rising competitive pressure on diabetes franchise and declining Gardasil sales in China may pose challenges for the company. There are concerns about Merck’s ability to grow its non-oncology business ahead of Keytruda’s loss of exclusivity in 2028.

However, Keytruda, and new products have been driving Merck’s sales. Animal health and vaccine products are core growth drivers. Merck boasts a strong cancer pipeline, including Keytruda, which should drive long-term growth.

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

Canterbury Park’s shares have underperformed the Zacks Gaming industry over the last six months (-4.9% vs. +19.8%). The Zacks analyst believes that weak casino revenues and substantial losses from equity investments have ailed the company. Increased competition also remains a concern. Canterbury Park faces ongoing regulatory hurdles, particularly with the introduction of 500 on-track ADW historical horse racing terminals, which are currently subject to legal challenges and legislative scrutiny.

Yet, Canterbury Park's Canterbury Commons Development offers significant long-term revenue potential through diversified projects like an amphitheater, Winners Circle and residential units, driving growth beyond traditional gaming. Also, the company’s vision of a regional destination is progressing, with leasing success indicating solid demand.

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

CompX’s shares have outperformed the Zacks Office Supplies industry over the last six months (+31.8% vs. -11.1%). The Zacks analyst believes that a diversified customer base, strategic inventory management and growth in the company’s Security Products segment, which includes mechanical and electrical cabinet locks has been aiding the company.

Yet, the Marine Components segment has been declining in sales due to reduced towboat demand. Rising raw material costs and and exposure to macroeconomic conditions and competitive pressures in mature markets also pose risks.

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

Other noteworthy reports we are featuring today include Wells Fargo & Company (WFC), Morgan Stanley (MS) and Southern Copper Corporation (SCCO).

Director of Research

Sheraz Mian

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

Alphabet (GOOGL) Benefits From Cloud & Search Initiatives

Oracle (ORCL) Gains from Cloud Suite Adoption & Partnerships

Keytruda to Remain Merck's (MRK) Key Top-Line Driver

Featured Reports

Kinder Morgan (KMI) Banks on Secured Take-or-Pay Contracts
Kinder Morgan's resilient business model, backed by take-or-pay contracts, ensures steady earnings. However, reduced project backlog concerns the Zacks analyst.

Expansion Actions to Drive Southern Copper (SCCO), Costs Ail
The Zacks analyst believes Southern Copper is poised well to gain from its industry-leading copper reserves and expansion actions. However, higher labor costs will hurt margins.

Pilgrim's Pride's (PPC) Operational Excellence to Fuel Sales
Per the Zacks analyst, Pilgrim's Pride's focus on quality, service, and innovation has been enhancing its performance. Net sales of $4,585 million jumped 5.2% year over year in the quarter.

Rising Premiums Aid Molina Healthcare (MOH), High MCR Ratio Hurts
Per the Zacks analyst, Molina Healthcare's rising revenues can be attributed to strong premium revenues and solid membership growth. A high medical care ratio remains a concern.

Restructuring Efforts, Acquisitions Aid Morgan Stanley (MS)
Per the Zacks analyst, relatively high rates, strategic alliances, global footprint and Morgan Stanley's focus on less capital-markets dependent operations will support its financials, going forward.

Deposit Growth Aid Wells Fargo (WFC), Lower Loan Balance Ail
Per the Zacks Analyst, Wells Fargo's rising deposit balance will support the company's financials. However, a lower loan balance due to the asset cap will impede growth.

Solid Bookings & Fleet Expansion to Aid Royal Caribbean (RCL)
Per the Zacks analyst, Royal Caribbean is likely to benefit from robust booking trends, fleet expansion and digital initiatives. Also, strength in consumer onboard spending bodes well.

New Upgrades

Triumph Group (TGI) Gains on Defense Orders & Air Traffic
As per the Zacks analyst, Triumph Group is likely to benefit from increasing defense order growth from the Pentagon and US allies. Also, improving commercial air traffic should boost its growth.

Strength in Aerospace Unit Boosts Plexus (PLXS) Performance
Per the Zacks analyst, momentum in the Aerospace/Defense sector is propelling Plexus' performance, with new program ramp-ups anticipated to fuel growth across all three divisions in fiscal 2025.

Robust Afirma Sales, LT Growth Drivers Aid Veracyte (VCYT)
Per the Zacks analyst, the robust volume growth of Veracyte's Afirma test is backed by its performance evidence and ease of use. Progress with long-term (LT) growth drivers look promising.

New Downgrades

Ironwood's (IRWD) Overdependence on Linzess Poses Concern
Per the Zacks analyst, Ironwood's heavy dependence on its sole marketed drug Linzess for growth is a woe. Also, competition for Linzess in the target market is intensifying, which is an overhang.

Unfavorable Demand, Supply Issue May Hurt Enphase (ENPH)
Per the Zacks analyst, unfavorable demand in parts of Europe may continue to hurt Enphase Energy's performance. Supply constraints for semiconductors can also impact the company.

Knight-Swift (KNX) Grapples With Rising Operating Expenses
Per the Zacks Analyst, high costs related to driver wages, equipment, maintenance, fuel and other expenses are increasing Knight-Swift's operating expenses. This is likely to weigh on the bottom line.

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Wells Fargo & Company (WFC) : Free Stock Analysis Report

Morgan Stanley (MS) : Free Stock Analysis Report

Merck & Co., Inc. (MRK) : Free Stock Analysis Report

Oracle Corporation (ORCL) : Free Stock Analysis Report

Southern Copper Corporation (SCCO) : Free Stock Analysis Report

Alphabet Inc. (GOOGL) : Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.