Tuesday, October 10, 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 United Parcel Service, Inc. (UPS), Booking Holdings Inc. (BKNG) and Lockheed Martin Corporation (LMT). 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 >>>
 

UPS shares have lagged the broader market as well as rival FedEx (FDX) this year (-11.4% vs. +14.3% for the S&P 500 & +47.7% for FDX). The company now expects revenues in 2023 to be around $93 billion. The new forecast is not only below the previous outlook of $97 billion but also much lower than 2022's actual figure.

Management cited costs associated with the labor deal, inked with 330,000 unionized workers, and declining package volumes induced by the labor negotiations as reasons for lowering the outlook. The five-year deal with the International Brotherhood of Teamsters for better pay and working conditions is worth less than $30 billion. It is likely to keep labor cost at high levels.

However, UPS is looking to drive growth in this uncertain scenario by improving efficiencies. Efforts to reward its shareholders also bode well for UPS. The company's strong free cash flow generating ability is encouraging and supports its shareholder-friendly activities.

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

Shares of Booking Holdings have outperformed the Zacks Internet - Commerce industry over the year-to-date period (+49.3% vs. +33.2%). The company is benefiting from a substantial improvement in booking trends driven by growing demand for travel. This, in, turn, is helping lower cancellation rates.

Booking Holdings expects room night growth to increase at a low double-digit rate on a year-on-year basis in the third quarter. Solid growth in domestic bookings is driving growth. The company is experiencing solid momentum in international regions, which is a positive. Strong growth in rental cars, airline ticket units and booked room nights is another positive.

Solid momentum across the agency, merchant, advertising and other businesses is a tailwind. Further, strengthening alternative accommodation business and flight capabilities are major positives. However, intensifying competition is a headwind.


Lockheed Martin shares have outperformed the Zacks Aerospace - Defense industry over the past year (+9.0% vs. -0.1%). The company keeps on securing big defense contracts from the Pentagon and other U.S. allies, which in turn add up to solid backlog count. Its strong backlog boosts long-term growth.

Lockheed remains the largest U.S. defense contractor with a steady order flow from its leveraged presence in the Army, Air Force, Navy and IT programs. The solid U.S. defense budgetary provisions should boost its business. Lockheed boasts strength in the international defense market.

Yet, America and Turkey's tiff as a result of the latter accepting Russian products may hurt its component supply from Turkey. It is facing performance issues concerning some of its products, which may hurt its results. An uncertainty regarding the possible sanction by China on Lockheed might impact the latter.

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

Other noteworthy reports we are featuring today include CME Group Inc. (CME), Intercontinental Exchange, Inc. (ICE) and General Dynamics Corporation (GD).

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>>>