Wednesday, September 06, 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 JPMorgan Chase & Co. (JPM), ServiceNow, Inc. (NOW) and American Express Co. (AXP). 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 JPMorgan Chase have outperformed the Zacks Banks - Major Regional industry over the year-to-date period (+10.7% vs. -3.8%). High interest rates, buyouts, global expansion efforts and a decent loan demand will aid net interest income (NII), while rising funding costs will weigh on it to an extent.

With green shoots visible in the investment banking (IB) business, IB fees are likely to witness a reversal next year. Yet, the volatile nature of the capital markets business and high mortgage rates are likely to make fee income growth tough.

Nonetheless, aided by solid earnings strength and balance sheet position, the company will be able to sustain enhanced capital distributions.

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

ServiceNow’s shares have outperformed the Zacks Computers - IT Services industry over the year-to-date period (+53.8% vs. +22.9%). The company has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation.

ServiceNow had 1724 total customers with more than $1 million in annual contract value at the end of the second quarter. ServiceNow’s expanding global presence, solid partner base and strategic buyouts are positives. New solutions — Automated service suggestions, Service Request Playbook and Workplace Scenario Planning — are helping it win new customers.

Expanding portfolio with new generative AI solutions is expected to drive top-line growth. Strategic alliances with the likes of Microsoft remain tailwinds. However, ServiceNow is suffering from high inflation, unfavorable forex, stiff competition, and a challenging macro-economic environment.

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

Shares of American Express have outperformed the Zacks Financial - Miscellaneous Services industry over the year-to-date period (+9.5% vs. +7.9%). The company’s several growth initiatives, such as launching new products, reaching new agreements and forging alliances, are boosting its revenues.

Consumer spending on T&E, which carry higher margins for AmEx, is advancing well. Its balance sheet looks strong with manageable debt. Solid cash-generation abilities enable the pursuit of business investments and prudent deployment of capital.

However, with higher utilization of the firm’s cards, expense in the form of card member services and card member rewards is likely to go up and strain the margins. Marketing and business development expense is expected to rise. A high debt burden induces a rise in interest expenses. As such, the stock warrants a cautious stance.

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

Other noteworthy reports we are featuring today include Airbnb, Inc. (ABNB), Aon plc (AON) and 3M Company (MMM).

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>>>