Friday, April 12, 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 PepsiCo, Inc. (PEP), Canadian Pacific Kansas City Limited (CP) and MercadoLibre, Inc. (MELI). 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 PepsiCo have underperformed the Zacks Beverages - Soft drinks industry over the past year (-6.0% vs. -3.9%). The company witnessed soft volume trends across both businesses, which impacted reported revenues in the fourth quarter. Adverse currency rates also remain headwinds.

Nevertheless, PepsiCo banks on strength and resilience in its categories, diversified portfolio, modernized supply chain, improved digital capabilities, flexible go-to-market distribution systems and robust consumer demand trends. These factors along with robust pricing aided PepsiCo’s earnings and organic revenues fourth-quarter 2023.

The company witnessed organic revenue growth across the global beverage and convenient food businesses. Additionally, the company’s productivity and cost-management initiatives bode well. For 2024, PEP expects to deliver organic revenues revenue growth of at least 4%.

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

Canadian Pacific Kansas City shares have outperformed the Zacks Transportation - Rail industry over the year-to-date period (+9.4% vs. +3.3%). Following the approval of the merger with Kansas City Southern, the company is known as Canadian Pacific Kansas City Limited. The deal is anticipated to draw synergies (annually) of $1 billion within three years.

The merged entity has started to offer a daily premium intermodal service between the U.S. Midwest and Mexico. The Zacks analyst is impressed with Canadian Pacific Kansas City's efforts to reward its shareholders through dividends and share repurchases. On the flip side, high operating expenses continue to weigh on the company's bottom line. Elevated fuel costs are leading to increased operating expenses.

Even though fuel prices have come down from the highs witnessed earlier, the same remains at an elevated level. High debt levels are worrisome as well. Canadian Pacific Kansas City does not have enough cash to meet its current debt levels.

(You can read the full research report on Canadian Pacific Kansas City here >>>)

Shares of MercadoLibre have underperformed the Zacks Internet - Commerce industry over the year-to-date basis (-4.3% vs. +14.1%). The company’s mounting expenses related to warehousing and mPOS discounts is a major headwind. Rising e-commerce competition from players like Amazon & Rakuten remains a concern.

Nevertheles, MercadoLibre is benefiting from accelerating commerce and fintech revenues. Rising gross merchandise volume (GMV) is acting as a key catalyst. Strong momentum across the company's advertising services is a major positive. Strengthening shipment growth is also contributing well to its top-line growth.

Increasing total payment volume (TPV), courtesy of the robust Mercado Pago, is another positive. Growing momentum across the MELI+ loyalty program and its expanding credit card offerings are acting as tailwinds. Solid uptake of online-to-offline offerings is a plus.

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

Other noteworthy reports we are featuring today include Hess Corporation (HES), Lululemon Athletica Inc. (LULU), and Manulife Financial Corporation (MFC).

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>>>