Friday, July 21, 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 Alphabet Inc. (GOOGL), The Procter & Gamble Company (PG) and Linde plc (LIN). 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 >>>

Alphabet shares have outperformed the broader market  this year (+36.3% vs. +18.9% for the S&P 500 index), though they have performed essentially in-line with the Zacks Tech sector. The company’s strong cloud division is aiding substantial revenue growth. Moreover, expanding data centers will continue to bolster its presence in the cloud space. Further, major updates in its search segment are enhancing the search results.

Also, strong focus on innovation of AI techniques and the home automation space should aid business growth in the long term. Further, its deepening focus on wearables category remains a tailwind. Also, Alphabet’s expanding presence in the autonomous driving space is contributing well. Its growing efforts to gain foothold in the healthcare industry are other positives. We expect to hear more about the company's AI efforts on the Q2 earnings call on July 25th.

However, sluggishness in the company’s advertisement business remains a major headwind. Also, its growing litigation issues and increasing expenses are concerns.

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

Shares of Procter & Gamble have modestly outperformed the Zacks Soap and Cleaning Materials industry over the past six months (+8.1% vs. +7.2%). The company continued its robust top and bottom-line surprise trend for the third consecutive quarter in third-quarter fiscal 2023. Also, sales and earnings grew year over year.

The company’s organic sales grew, driven by robust pricing and a favorable mix, along with strength across segments. It has been focused on productivity and cost-saving plans to boost margins. Consequently, it raised the sales view to 1% growth compared with our estimate of a 1.1% rise for fiscal 2023.

However, the company has been witnessing supply-chain issues, higher transportation costs, geopolitical challenges, currency headwinds and rising inflation. As a result, the company retained its drab earnings view for fiscal 2023. Also, an unfavorable currency has been concerning.

(You can read the full research report on Procter & Gamble here >>>)

Linde shares have outperformed the Zacks Chemical - Specialty industry over the past year (+35.6% vs. +14.9%). The company is making the world more productive by the day with wide range of applications for its industrial gases. Linde’s primary products in industrial gases include oxygen, which is used as life support in hospitals.

Linde has long-term contracts with on-site customers backed by minimum purchase requirements, thereby securing stable cashflows. In the profitable industrial gas market, the merger of Praxair and Linde has created an efficient player with considerable size advantages.

However, declining free cashflow is a concern, reflecting weakness in operating activities. Moreover, the company is extremely vulnerable to uncertainty associated with the slowdown of economic growth, as this could hurt demand for its industrial gases.

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

Other noteworthy reports we are featuring today include Comcast Corporation (CMCSA), Intuitive Surgical, Inc. (ISRG) and Elevance Health, Inc. (ELV)

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>>>