Thursday, March 2, 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 Schlumberger Limited (SLB), Becton, Dickinson and Company (BDX) and Marathon Petroleum Corporation (MPC). 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 >>>

Schlumberger shares have outperformed the Zacks Oil and Gas - Field Services industry over the past year (+42.5% vs. +24.3%), reflecting the company's status as the largest oilfield services player, with a presence in every energy market across the globe. Being the leading provider of technology for complex oilfields, the firm is well-poised to take up new offshore projects in international markets.

Higher oil prices is aiding its overall business. SLB reported strong fourth-quarter results driven by strong activities in land and offshore resources in North America and Latin America. It made significant progress in its sustainability initiatives in 2022. SLB expects its Transition Technologies portfolio to cross the $1 billion revenue mark in 2023.  

However, the company’s balance sheet has massive debt exposure compared with the composite stocks in the industry. Also, the aggressive capital budget remains a headwind for the company. As such, the stock warrants a cautious stance.

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

Shares of Becton, Dickinson have underperformed the Zacks Medical - Dental Supplies industry over the past year (-14.9% vs. -9.3%). The company has reported year-over-year fall in revenues, BD Life Sciences and international revenues were worrying. Lower COVID-only testing revenues are discouraging from a business perspective. BD’s operations in a highly consolidated medical technology industry and a stiff competitive space are worrying. Forex woes prevail.

Nevertheless, BD’s improvement in the overall base revenues and the year-over-year uptick in bottom-line results in fourth-quarter fiscal 2022 were impressive. Robust results by majority arms and in the United States were promising. The expansion of both margins bodes well.

Regulatory approvals and launches were encouraging. BD’s strategic deals augur well. A strong solvency position is an added plus. BD’s results in fiscal fourth quarter were better than expected.

(You can read the full research report on Becton, Dickinson here >>>)

Marathon Petroleum shares have outperformed the Zacks Oil and Gas - Refining and Marketing industry over the past year (+67.0% vs. +23.5%). The company’s sale of its Speedway retail business for $21 billion provided the downstream operator with a much-needed cash infusion. The deal also comes with a 15-year fuel supply agreement per which Marathon Petroleum will supply 7.7 billion gallons of gasoline per year to 7-Eleven, thus ensuring a steady revenue stream.

But while refining fundamentals have certainly brightened from the covid lows, the sector is not out of the woods yet in terms of cash flows that remain anaemic and well below the pre-crisis levels. In particular, the weakness in business travel demand remains a complicating factor.

The continued increase in costs and expenses over the past few quarters and execution risks related to renewables foray are other negatives in the Marathon Petroleum story. As such, the stock warrants a cautious stance.

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

Other noteworthy reports we are featuring today include Northern Trust Corporation (NTRS), Twilio Inc. (TWLO) and Molson Coors Beverage Company (TAP).

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>>>