Friday, January 6, 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 Caterpillar Inc. (CAT), Equinor ASA (EQNR) and GSK plc (GSK). 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 >>>

Caterpillar shares have been standout performers lately, handily outperforming the broader market over the past year (+10.7% vs. -19.8% for the S&P 500 index). The company’s cost-saving actions, strong end-market demand and pricing actions has offset the impact of the supply chain snarls and cost pressures. The Zacks analyst expect that Caterpillar’s adjusted earnings per share for 2022 to grow at 29.2% and revenues are predicted to rise 13.5%.

The Construction Industries segment is expected to benefit from the rising construction activities in the United States and other parts of the world. Backed by demand for commodities fueled by the energy-transition trend, a thriving mining sector will aid the Resource Industries segment.

Its dividend yield and payout ratio are higher than its peers. A strong liquidity position, investments in expanding services and digital initiatives will help Caterpillar deliver outsized returns.

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

Shares of Equinor have gained +16.1% over the past year against the Zacks Oil and Gas - Refining and Marketing industry’s gain of +25.3%. This company which is one of the premier integrated energy companies, with operations spreading across 30 countries. In 2021, the company completed 21 exploration wells, with 8 commercial discoveries.

The company stated its production growth expectations at 1% for 2022. To combat climate change, the company is actively investing in renewable energy projects, comprising power generation from solar and wind energy. Also, the company’s board increased the extraordinary cash dividend to 70 cents per share from 50 cents per share for the third quarter of 2022.

However, the company’s balance sheet has significant debt exposure as compared to the composite stocks in the industry. Also, the company is not being able to capture the potential profit growth from commodity prices that have reached record highs. As such, the stock warrants a cautious stance.

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

Shares of GSK have underperformed the Zacks Medical - Biomedical and Genetics industry over the past year (-37.1% vs. -16.4%). The company is facing generic competition for key drug, Advair is hampering sales of GSK’s respiratory products, which we believe may not be compensated by new respiratory drugs. Competitive pressure on HIV drugs has risen.

According to the Zacks analyst estimates the GSK’s top line suggest a CAGR decline of around 3.5% over the next three years. Estimate movements have been stable ahead of Q4 results. However, GSK’s specialty products like Dovato, Nucala, Trelegy Ellipta, Shingrix, Juluca are driving sales, making up for a decline in Established Pharmaceuticals due to generic erosion.

The continued recovery in Shingrix sales is encouraging. GSK has made significant progress in its pipeline. Several pipeline readouts are expected in the near term. The spin-off of the Consumer unit this year has allowed it to focus on drug development.

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

Other noteworthy reports we are featuring today include Boston Scientific Corporation (BSX), Sysco Corporation (SYY) and AmerisourceBergen Corporation (ABC).

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>>>