Monday, November 4, 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 The Home Depot, Inc. (HD), McDonald's Corp. (MCD) and Comcast Corp. (CMCSA), as well as a micro-cap stock Tile Shop Holdings, Inc. (TTSH). 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 Home Depot have gained +15.1% over the year-to-date period against the Zacks Building Products - Retail industry’s gain of +16.7%. The company gains from its “One Home Depot” plan focused on expanding supply chain facilities, technology and improving the digital experience.

The interconnected retail strategy and strong technology infrastructure have consistently boosted web traffic in recent quarters. HD is also advancing investments to build a Pro ecosystem. HD’s sales saw modest recovery in second-quarter fiscal 2024 driven by contributions from the recent SRS acquisition.

However, Home Depot’s stock has lagged the industry in the past three months due to higher interest rates and macroeconomic uncertainty, dampening consumer demand for home improvement. While Home Depot exceeded sales and EPS estimates in the fiscal second-quarter, EPS declined year over year. Inflationary pressures, including lumber prices, continue to hurt financial performance.

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

McDonald's shares have outperformed the Zacks Retail - Restaurants industry over the past six months (+12.2% vs. +8.5%). The company reported third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis. The company is benefiting from technological enhancements, unit expansion and a loyalty program.

McDonald’s is focusing on menu innovation, as it believes that the strengthening of the core menu and solid marketing are likely to pave the way for additional growth in the upcoming periods. Also, the emphasis on the Accelerating the Arches strategy bodes well.

Earnings estimates for 2024 have increased in the past 30 days, depicting analysts’ optimism regarding the stock growth potential. However, dismal comps, macroeconomic challenges and elevated commodity and wage costs are headwinds.

(You can read the full research report on McDonald's here >>>)

Shares of Comcast have outperformed the Zacks Cable Television industry over the year-to-date period (+2.0% vs. -0.5%). The company is benefiting from continued momentum in domestic wireless subscribers and Peacock, offset by a declining broadband subscriber base. The company’s plan to transition to DOCSIS 4.0 is noteworthy.

The technology will expand it much faster and at a lower cost compared with its competitors. Decreasing programming and production costs bode well for Comcast’s profitability. Its streaming service, Peacock, is a key catalyst in driving broadband sales. Strong free cash flow generation ability is noteworthy.

However, the company persistently suffers from video-subscriber attrition due to cord-cutting. Moreover, broadband prospects are suffering from increased competition from fixed wireless and fiber businesses. Additionally, a leveraged balance sheet is a major concern for the company.

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

Tile Shop’s shares have gained +32.2% over the past year against the Zacks Building Products - Retail industry’s gain of +37.3%. This microcap company with market capitalization of $304.07 million have seen strong liquidity, with $25.3 million in cash and no debt, along with a $75 million credit line, provides financial stability.

E-commerce growth of more than 25% underscores successful digital investments, while the Superior private label brand bolstered professional customer engagement and enhanced market penetration.

However, a 6.9% decline in comparable store sales, rising selling, general and administrative (SG&A) expenses, and a 75.9% decline in net income to $1.2 million raise concerns about sustained profitability. Persistent margin erosion and declining cash flow may pressure the stock amid a tough retail environment.

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

Other noteworthy reports we are featuring today include FirstEnergy Corp. (FE), Huntington Bancshares Inc. (HBAN) and EMCOR Group, Inc. (EME).

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>>>