News

Friday, February 16, 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 Fomento Económico Mexicano, S.A.B. de C.V. (FMX), Palo Alto Networks, Inc. (PANW) and Shopify Inc. (SHOP). 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 FMX have outperformed the Zacks Beverages - Soft drinks industry over the past year (+52.9% vs. +9.1%). The company’s bottom-line improved year over year on robust sales growth, improved gross margin and lower interest expense.

Revenues improved on gains across all business units resulting from effective growth strategies and robust demand across markets. The company’s digital initiatives and business expansion endeavors have also been aiding results. Its efforts to expand in the U.S. specialized distribution segment bodes well.

However, FEMSA witnessed operating margin decline due to contraction at Proximity Americas, Health, and Fuel divisions due to higher labor expenses related to the labor reforms in Mexico and the inclusion of Proximity Europe.

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

Palo Alto Networks shares have outperformed the Zacks Internet - Software industry over the past six months (+76.8% vs. +46.5%). The company is benefiting from continuous deal wins and the increasing adoption of its next-generation security platforms, attributable to the rise in the hybrid work environment and the heightened need for stronger security.

PANW’s strong back-to-back quarterly performances reflect its sustained focus on product innovation, a shift in its business model to subscription-based services, platform integration and continued investments in the go-to-market strategy. The normalization of the supply chain is also aiding growth across the Products, Services and Subscription segments.

However, softening IT spending amid macroeconomic headwinds might hurt its near-term prospects. Forex headwinds and higher marketing and sales expenses are likely to continue hurting its profitability. Also, high acquisition-related expenses are denting margins.

(You can read the full research report on Palo Alto Networks here >>>)

Shares of Shopify have outperformed the Zacks Internet - Services industry over the past year (+92.6% vs. +52.5%). The company is benefiting from strong growth in the merchant base. In 2023, 35% more merchants from outside North America launched and grew their businesses on Shopify’s platform compared with 2022, reflecting growing international penetration.

It has been focused on winning merchants regularly based on a unified commerce platform and new merchant-friendly applications like Bill Pay, Tax Platform, Collective and the Marketplace Connect app. Strong adoption of these solutions holds promise.

Integration of Shop Pay Installments into the point-of-sale terminal and general availability of Pro makes it easier for merchants to discover and engage their customers. An expanding partner base that includes TikTok, Snap, Pinterest and Criteo is expected to expand its merchant base. However, raging inflation and cautious consumer spending are headwinds.t

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

Other noteworthy reports we are featuring today include Cadence Design Systems, Inc. (CDNS), Canadian Natural Resources Limited (CNQ) and The PNC Financial Services Group, Inc. (PNC).

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

Featured Reports

Diverse Production Mix to Aid Canadian Natural (CNQ)
The Zacks analyst believes Canadian Natural's diverse product mix as facilitating long-term value and reducing risk profile but is worried about the company's debt maturities each year out till 2027.

Solid Balance Sheet Aids PNC Financial (PNC), High Costs Ail
Per the Zacks analyst, PNC Financial's solid balance sheet and strategic initiatives will support its financials. However, an elevated cost base and loan portfolio concentration are concerning.

Solid RevPAR Growth & Expansion Efforts Aid Hilton (HLT)
Per the Zacks analyst, Hilton is benefiting from solid RevPAR growth owing to increased occupancy rates and ADR. Also, focus on unit expansion, hotel conversions and strategic partnerships bode well.

Manulife (MFC) is Poised to Grow on Solid Asia Business
Per the Zacks analyst, Manulife Financial is set to grow on solid Asia business, expanding Wealth and Asset Management business and cost control. However, increase in expenses weighing on margin ails.

Healthcare Business Growth Aid STERIS (STE) Amid Forex Woes
The Zacks analyst is impressed with STERIS' growth in Healthcare business led by the addition of surgical instrumentation assets purchased from BD. Yet, foreign exchange woes remain a concern.

Solid Budget Aids Curtiss-Wright (CW) Amid Fuel Price Hike
Per the Zacks analyst, increasing U.S. defense budget should boost demand for Curtiss-Wright's nuclear propulsion equipment. Yet rising fuel price might hurt airline industry and in turn the stock

Syfovre Sales Boost Apellis (APLS), Regulatory Setbacks A Woe
Per the Zacks Analyst, Empaveli and Syfovre sales have been driving revenues for Apellis. However, the recent regulatory setback in the EU for pegcetacoplan to treat GA is a woe.

New Upgrades

Cadence (CDNS) to Benefit From Strong Portfolio & Buyouts
Per the Zacks analyst, Cadence's performance is gaining from strong demand for its products. Robust design activity due to generational trends such as AI and 5G is expected to boost top line.

Gap's (GPS) Power Plan 2023 Strategy Appear Promising
Per the Zacks analyst, Gap is on track with the execution of its Power Plan 2023, which focuses on opening Old Navy and Athleta stores while closing the underperforming Gap and Banana Republic stores.

Allison (ALSN) Rides on Frequent Product Launches
The Zacks analyst believes that Allison's regular product launches including FracTran, TerraTran and the 3414 Regional Haul Series fully automatic transmission are boosting sales growth.

New Downgrades

Intense Competition and Currency Risk Ail for Avis Budget (CAR)
Per the Zacks analyst, Avis Budget strives in a market, where competition emanates from small and large players. Foreign currency exchange risk tends to trouble the company.

Lower Volumes, Supply Constraints Ail Dover's (DOV) Results
Per the Zacks Analyst, softness in volumes is likely to impact Dover's margins. Input cost inflation and component shortages are other woes.

Weak Cutting & Marking Hurts IPG Photonics' (IPGP) Prospects
Per the Zacks analyst, IPG Photonics is suffering from weakness in cutting and marking applications, particularly in China, amid challenging macroeconomic conditions and stiff competition.

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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.