Wednesday, October 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 AstraZeneca PLC (AZN), Accenture plc (ACN) and AT&T Inc. (T), as well as a micro-cap stock National Presto Industries, Inc. (NPK). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.

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 AstraZeneca have gained +18.0% over the year-to-date period against the Zacks Large Cap Pharmaceuticals industry’s gain of +22.7%. The company’s key drugs like Lynparza, Tagrisso, Imfinzi, Fasenra, Ultomiris and Farxiga should keep driving revenues. AstraZeneca’s pipeline is strong, with important pipeline data readouts lined up.

AstraZeneca has also been engaged in external acquisitions and strategic collaborations to boost its pipeline while investing in geographic areas of high growth like emerging markets. Backed by its new products and pipeline drugs, AstraZeneca believes it can post industry-leading top-line growth in the 2025-2030 period.  

However, AstraZeneca’s diabetes franchise faces stiff competition while pricing pressure hurts sales in the respiratory unit. Estimates are stable ahead of the Q3 earnings release. The company has a mixed record of earnings surprises in the recent quarters.

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

Accenture’s have gained +21.5% over the past year against the Zacks Computers - IT Services industry’s gain of +30.4%. The company’s shares are attractive due to technological prowess, contribution from acquisitions, strong growth prospects and dividend payouts.

Accenture continues to witness strong demand for application modernization and maintenance, cloud enablement and cybersecurity-as-a-service. These trends are boosting its managed services business across the world.  A disciplined acquisition strategy helps Accenture to channelize business in high-growth areas.

On the flip side, pricing pressure due to significant competition from strong companies like Genpact, Cognizant and Infosys, remains a concern. Accenture continues to acquire a large number of companies which adds to integration risk.

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

Shares of AT&T have outperformed the Zacks Wireless National industry over the past year (+56.7% vs. +52.5%). The company having a customer-centric business model, is likely to benefit from the increased deployment of mid-band spectrum and greater fiber densification. An integrated fiber expansion strategy is expected to improve broadband connectivity for enterprise and consumer markets, while steady 5G deployments are likely to boost end-user experience.

AT&T intends to leverage Ericsson technology to deploy a commercial-scale open radio access network across the country to help build a more robust ecosystem of network infrastructure providers and suppliers.

However, AT&T has offered a muted outlook for 2024 owing to a challenging macroeconomic environment. The steady decline in linear TV subscribers and legacy services is a potent headwind. Healthy discounts and freebies to woo customers dent margins. The high debt burden is worrisome.

(You can read the full research report on AT&T here >>>)

National Presto’s shares have gained +3.2% over the past year against the Zacks Diversified Operations industry’s gain of +21.1%. This microcap company with market capitalization of $520.67 million boasts a strong balance sheet with minimal debt and solid cash flow, providing stability and flexibility for growth initiatives, including acquisitions and shareholder returns. The company’s Defense segment has secured a $52 million option under a U.S. Army contract, enhancing its long-term revenue visibility.

National Presto’s Housewares segment benefits from innovation and strong branding, aligning with increasing demand for energy-efficient and smart appliances. A diversified business portfolio across defense, kitchen appliances and safety products helps mitigate risks and maintain stable performance.

However, rising raw material costs pose a threat to margins, particularly in the competitive kitchen appliance market dominated by large players. The company’s reliance on U.S. defense contracts introduces vulnerability to shifts in federal spending.

(You can read the full research report on National Presto Industries here >>>)

Other noteworthy reports we are featuring today include Blackstone Inc. (BX), Airbnb, Inc. (ABNB) and Cencora, Inc. (COR).

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

Key Drugs Aid AstraZeneca (AZN) Sales; Pipeline Strong

ATI Solutions Buyout Aids Accenture (ACN) Amid Talent Cost

AT&T (T) Rides on Fiber Densification, Accelerated 5G Rollout

Featured Reports

AUM & Global Presence Aid Blackstone (BX) Amid Rising Costs
Per the Zacks analyst, Blackstone's solid assets under management balance, global presence and a strong balance sheet will aid its financials. Yet, high costs and weak capital distributions are woes.

Airbnb (ABNB) Banks on Strong Nights & Experiences Bookings
Per the Zacks analyst, strengthening gross nights booked in high-density urban areas, and recovery in both long-distance and cross-border travel are benefiting Airbnb's Nights & Experience bookings.

Solid Healthcare Demand Helps Cencora (COR) Offset Headwinds
Per the Zacks analyst, Cencora continues to gain from the strength in its U.S. Healthcare solutions and improving earnings. However, stiff competition and contract renewals remain a cause for concern.

Strong Transaction and Subscription revenues Aids Block (SQ)
Per the Zacks analyst, growing momentum across transaction and subscription revenues is driving Block's top-line growth.

Cost Management & Regulated investment Aid Exelon (EXC)
Per the Zacks analyst Exelon's cost management initiatives will have positive impact on margins and its planned $34.5B investments through 2027 will strengthen its operation.

Sysco (SYY) Gains on Growing Food-Away-From-Home Channel
Per the Zacks analyst, Sysco is benefiting from upswing in its Food-Away-From-Home channel. In the fourth quarter of fiscal 2024, the company saw a 3.5% increase in U.S. Foodservice volume.

MAP 2025 Initiatives Aid RPM's Performance, Currency Woes Ail
Per the Zacks analyst, RPM benefits from strong infrastructural demand and MAP 2025 initiatives. However, increased cost structure and foreign currency woes are headwinds.

New Upgrades

Growth Projects, Rallying Gold Prices Aid Agnico Eagle (AEM)
Per the Zacks analyst, the advancement of key growth projects will provide additional growth in production and cash flows. Surging gold prices will also drive the company's margins.

Healthy Demand for Premier Office Spaces Aids SL Green (SLG)
Per the Zacks analyst, healthy demand for premier office spaces, a solid tenant base with long-term leases and opportunistic investments bode well for SL Green.

Amicus (FOLD) Rides on Robust Galafold Sales Performance
Per the Zacks analyst, Amicus' lead drug, Galafold, has shown solid uptake since launch. The drug has blockbuster potential. Approval of Pombiliti+Opfolda for treating Pompe disease also aids sales.

New Downgrades

North Sea Drilling Suspension to Hurt APA Corporation (APA)
The Zacks analyst believes that APA's decision to suspend new drilling in the North Sea, citing an unfavorable tax and policy environment, diminishes its global footprint.

Weak Demand in China & Rising Costs Hurt A. O. Smith (AOS)
Per the Zacks analyst, soft demand for A. O. Smith's residential water treatment products in China due to challenges in the real estate market are weighing on its results. High costs remain a concern.

Exposure to Cat Loss, High Cost Ail Selective Insurance (SIGI)
Per the Zacks analyst, Selective Insurance's exposure to cat loss poses an inherent risk to the P &C insurance business inducing volatility to results. Rising expenses weigh on margin expansion.

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

AstraZeneca PLC (AZN) : Free Stock Analysis Report

Blackstone Inc. (BX) : Free Stock Analysis Report

AT&T Inc. (T) : Free Stock Analysis Report

Accenture PLC (ACN) : Free Stock Analysis Report

Cencora, Inc. (COR) : Free Stock Analysis Report

National Presto Industries, Inc. (NPK) : Free Stock Analysis Report

Airbnb, Inc. (ABNB) : Free Stock Analysis Report

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