Main research reports for ConocoPhillips, SAP and CSX
Wednesday, July 6, 2022
Zacks Research Daily features the best research results from our team of analysts. Today’s Research Daily features new research reports on 16 major stocks, including ConocoPhillips (COP), SAP SE (SAP) and CSX Corp. (CSX). 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 >>>
Conoco Phillips shares have gained +43.4% over the past year against US industry Zacks Oil and Gas – Integrated’s +45.9% gain. The Zacks analyst believes there are significant opportunities for the company in the Bakken shales, where it has about 750 undrilled locations that could provide access to huge reserves.
Notably, the company has revised up its scheduled 2022 return of capital to shareholders to $10 billion, reflecting an increase from the previously mentioned $8 billion. In addition, the company’s balance sheet is significantly less leveraged than that of the sector to which it belongs.
However, ConocoPhillips is heavily exposed to fluctuations in oil prices, which makes things difficult for the company. In addition, it has generated a lower dividend yield than composite stocks belonging to the energy sector in recent years.
(You can read the full research report on ConocoPhillips here >>>)
SAP shares are down -39.6% over the past year against Zacks Computer – Software industry decline of -15.4%. The Zacks analyst believes the suspension of Russian operations amid the ongoing war in Ukraine is expected to affect both the company’s revenue and non-IFRS operating profit in the near term.
Low adoption of software licenses and support offerings remains a headwind. Fierce competition and rising costs to improve cloud-based offerings are also likely to put pressure on the company’s profitability.
However, SAP’s performance is gaining strength in its cloud business, including the new Rise with SAP solution. The momentum of the SAP Business Process Intelligence platform, particularly S/4HANA solutions, as well as the consistent traction seen in SuccessFactors Employee Central, Ariba and Fieldglass, Qualtrics and other cloud-based offerings are noteworthy.
(You can read the full SAP research report here >>>)
Shares of CSX declined -13.6% over the past year compared to the -9.4% decline in the Zacks Transportation – Rail industry. The Zacks analyst believes supply chain disruptions are hurting company operations. Weakness in the commodity segment due to lower auto volumes is a concern. High costs, primarily due to escalating fuel expenses, pose a threat to CSX’s bottom line. CSX’s high capital expenditures are also concerning.
However, CSX benefits from higher coal export volumes, domestic intermodal shipments and favorable pricing. With the demand scenario expected to remain strong, despite the current bloodbath in the market, management expects double-digit operating profit and revenue growth for 2022 compared to the respective figures released a year ago.
(You can read the full CSX research report here >>>)
Other noteworthy reports we feature today include Alnylam Pharmaceuticals, Inc. (ALNY), DTE Energy Co. (DTE), and NVR, Inc. (NVR).
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 Revenue overview reports. If you would like to receive an email notification whenever Sheraz publishes a new article, please click here>>>
To read today
ConocoPhillips (COP) bets on oil-rich Bakken Shale assets
Strong Momentum in Cloud Business Drives SAP Performance
Healthy freight demand helps CSX despite supply chain issues
Alnylam’s (ALNY) marketed drugs contribute to growth in the face of competition
According to the Zacks analyst, Alnylam’s portfolio of approved drugs has seen strong adoption since its launch, while the pipeline is progressing well. However, fierce competition in the target market remains a problem
Strong DTE Energy (DTE) investment support, low solvency issues
According to the Zacks analyst, DTE Energy’s investments in infrastructure and expansion projects tend to boost its long-term growth prospects. However, its weak solvency position remains a bottleneck.
Growth of Skechers direct-to-consumer (SKX) commercial aids
According to the Zacks analyst, Skechers’ direct-to-consumer business is benefiting from growth in both international and domestic markets. During the first quarter of 2022, direct-to-consumer sales increased by 15.7%.
Expansion strategies help Evercore (EVR), rising costs all
According to the Zacks analyst, Evercore’s efforts to build its customer base in consulting solutions could support revenue growth. However, rising compensation costs will likely keep earnings under pressure.
National Vision (EYE) Robust new store growth despite cost concerns
Significant growth in National Vision’s store count for the America’s Best and Eyeglass World brands is expected to help revenue, according to the Zacks analyst. Margin squeezes on rising spending are daunting.
NVR benefits from a disciplined business model and high inflation
According to the Zacks analyst, NVR’s disciplined business model and focus on maximizing liquidity and minimizing risk bodes well. Still, supply chain issues and inflationary pressures are pressing concerns.
Acquisitions benefit Toll Brothers (TOL), higher tariffs for all
According to the Zacks analyst, the lack of competition in the luxury new home market and buyout synergies have been driving Toll Brothers. However, higher mortgage rates are risks.
Watts Water (WTS) will benefit from a strong product portfolio
According to the Zacks analyst, Watts Water benefits from a diversified product portfolio, geographic expansion and effective cost management. A solid balance sheet and buyout synergies are tailwinds.
Capacity expansion, cost reduction to help Albemarle (ALB)
According to the Zacks analyst, Albemarle should take advantage of its shares to increase its global capacity in lithium derivatives. Its cost reduction actions will also support margins.
Kronos Worldwide (KRO) Gains on Rising TiO2 Demand and Prices
According to the Zacks analyst, higher demand for titanium dioxide (TiO2) will boost the company’s sales volumes. Higher average selling prices for TiO2 will also support its margins.
Rising spending, growing competition Garlic MercadoLibre (MELI)
According to the Zacks analyst, MercadoLibre is hurt by rising spending on warehousing, free shipping subsidies and mPOS discounts. In addition, increased competition in e-commerce poses risks.
Falling Marketplace GMS and assembly costs are hurting Etsy (ETSY)
According to the Zacks analyst, a slowdown in consumer spending is hurting Etsy Marketplace’s gross merchandise sales. Additionally, rising costs due to the move to off-site ads remain a concern for its profitability.
Escalating Costs and High Debts Harm Community Health (CYH)
According to the Zacks analyst, the company’s high costs can put pressure on margins. The increase in debt remains a concern as it leads to an increase in interest charges.
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Alnylam Pharmaceuticals, Inc. (ALNY): Free Stock Analysis Report
ConocoPhillips (COP): Free Stock Analysis Report
CSX Corporation (CSX): Free Stock Analysis Report
DTE Energy Company (DTE): Free Inventory Analysis Report
SAP SE (SAP): Free Inventory Analysis Report
NVR, Inc. (NVR): Free Stock Analysis Report
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