Thursday, December 7, 2023

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 AbbVie Inc. (ABBV), NIKE, Inc. (NKE) and BHP Group Ltd. (BHP). 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 >>>

AbbVie’s shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past six months (+8.6% vs. +4.9%). The company has several new drugs in its portfolio with the potential to drive the top line and make up for lost Humira revenues.

Newer products, Skyrizi and Rinvoq, are performing extremely well, bolstered by approval in new indications, which should support top-line growth in the next few years. The company has several early/mid-stage candidates that have potential to drive long-term growth.

Though revenues are expected to decline in 2023, AbbVie expects to return to robust sales growth in 2025. However, the company faces several near-term headwinds like Humira’s loss of exclusivity, increasing competitive pressure on Imbruvica and economic pressure on Juvederm sales.

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

Shares of NIKE have outperformed the Zacks Shoes and Retail Apparel industry over the past six months (+10.1% vs. +4.7%). Continued progress on Consumer Direct Acceleration strategy, compelling product innovation and digital leadership have been drivers for the company.

This aided retail sales across Nike Direct and wholesale businesses in first-quarter fiscal 2024. The digital business has been gaining from robust consumer trends, including momentum in the NIKE mobile app led by improved traffic and increased member buying frequency. The company posted top and bottom-line growth in first-quarter fiscal 2024.

Backed by solid consumer momentum, a robust innovation pipeline and strong inventory, management provided a solid outlook for fiscal 2024. However, NIKE has been witnessing gross margin pressures owing to the rising inflation. Elevated demand creation expenses lead to higher SG&A expenses.

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

Shares of BHP have gained +5.3% over the past six months against the Zacks Mining - Miscellaneous industry’s gain of +11.4%. The company’s fiscal 2024 iron ore production guidance is 254-264.5 Mt, indicating 1% year-over-year growth at the midpoint. Production of copper is expected to be 1,720-1,910 kt (5.7% year-over-year growth at the midpoint) and nickel at 77-87 kt (2.5%).

Iron ore prices have been low on weak demand in China. Hopes of a pickup in demand in China, owing to a fresh round of stimulus measures for boosting its struggling property sector have lifted prices lately. Going forward, iron ore prices will be supported by demand in the automotive sector, infrastructure and housing market.

Copper and nickel prices will be fueled by demand for electric vehicles. BHP’s investment in projects with a focus on future--facing commodities like copper, nickel and potash will aid growth. Efforts to make operations more efficient through technology will aid earnings.

Other noteworthy reports we are featuring today include American Electric Power Co., Inc. (AEP) and Block, Inc. (SQ).

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

AbbVie's (ABBV) Skyrizi, Rinvoq Key to Top-Line Growth

NIKE's (NKE) Digital Business to Aid Sales in the Near Term

Investments to Drive BHP Group (BHP) Amid Price Volatility

Featured Reports

Improving Clearing and Transaction Fees Aid CME Group (CME)
Per the Zacks analyst, CME is set to grow on higher clearing and transaction fees as market position, diverse derivative product lines and global reach drive volumes. However, escalating expense ails.

Capex Aid American Electric (AEP) Amid Supply Chain Issue
Per the Zacks analyst, solid capital expenditure in transmission, distribution and renewables will benefit American Electric. Yet, steady supply chain disruption might hurt its future cash flow.

Solid Cash App Adoption & Square Ecosystem Aid Block (SQ)
Per the Zacks analyst, Block is benefiting from strong Cash App engagement and its growing active customer base. Further, the company's growing momentum across Square Ecosystem remains a positive.

Verisk (VRSK) Gains From Opta Buyout, Operational Risks Stay
Per the Zacks analyst, the Opta acquisition has expanded Verisk's footprint in the Canadian market. Chances of security breach remains as a concern.

Baker Hughes (BKR) Likely to Benefit From Higher LNG Demand
Per the Zacks analyst, Baker Hughes is poised to gain from the expansion of its international LNG opportunities, with forecasts suggesting continued growth through 2026 and beyond.

High Infrastructure Demand Aids Quanta (PWR), High Costs Ail
Per the Zacks analyst, Quanta is benefiting from high demand for its infrastructure solutions and increased renewable generation project activities. However, high costs are restricting prospects.

BSO & Growth Plans Aid Citizens Financial (CFG), Costs Up
Per the Zacks Analyst, Citizens Financials' focus on strategic growth plans and BSO efforts are its key strengths. However, higher costs on expansion strategies will likely limit bottom-line growth.

New Upgrades

Higher Transaction Fees, Acquisitions Aid Cboe Global (CBOE)
Per the Zacks analyst, Cboe Global is set to grow on higher transaction fees driven by trading volume growth given solid proprietary products. Also, buyouts have diversified its product portfolio.

Aspen (AZPN) To Benefit From Diversified Product Portfolio
Per the Zacks analyst, Aspen benefits from increased demand for its products across various markets like upstream and midstream energy and refining. Also, synergies from acquisition is a tailwind.

Service Corporation (SCI) Gains on Robust Cemetery Segment
Per the Zacks analyst, Service Corporation is gaining on solid Cemetery sales for a while. During third-quarter consolidated Cemetery revenues increased 5.5% year over year to $447.1 million.

New Downgrades

Softer Lithium Prices, Specialties Unit Ail Albemarle (ALB)
Per the Zacks analyst, Albemarle faces headwinds from weaker lithium market pricing. The softness in consumer and industrial electronics markets will also hurt its Specialties segment.

Overdependence on SET Platform Continue to Ail Masimo (MASI)
The Zacks analyst is worried about Masimo's overdependence on its Signal Extraction Technology or SET platform to derive the majority of its revenues.

Phirbo (PAHC) Grappled With Regulatory Issues, Macro Woes
The Zacks Analyst is worried about FDA's regulatory actions surrounding Mecadox, one of the prime products of Phirbo. Challenging macroeconomic issues continue to concern.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

CME Group Inc. (CME):Free Stock Analysis Report

NIKE, Inc. (NKE):Free Stock Analysis Report

BHP Group Limited Sponsored ADR (BHP):Free Stock Analysis Report

American Electric Power Company, Inc. (AEP):Free Stock Analysis Report

AbbVie Inc. (ABBV):Free Stock Analysis Report

Block, Inc. (SQ):Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research