Friday, March 3, 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 Analog Devices, Inc. (ADI), The Estée Lauder Companies Inc. (EL) and Aon plc (AON). 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 Analog Devices have outperformed the Zacks Semiconductor - Analog and Mixed industry over the past year (+17.6% vs. +13.8%). The company is riding on the strength across consumer, communications, industrial and automotive markets. Solid demand for high-performance analog as well as mixed signal solutions is a tailwind. Strong momentum across electric vehicle space on the back of its robust Battery Management System solutions is a positive.

Increasing power design wins are other positives. Solid momentum of HEV platform across cabin electronics ecosystem is a tailwind. The company also remains optimistic about the growth prospects related to 5G. Considering the abovementioned factors, we expect first-quarter fiscal 2023 total revenue to rise 15.3% year over year.

However, weak momentum across major applications and leveraged balance sheet are concerns. Pandemic induced supply-chain constraints and geopolitical tensions led by Russia-Ukraine war remain major overhangs.

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

The Estée Lauder shares have modestly outperformed the Zacks Cosmetics industry over the past six months (+0.2% vs. -1.6%) on the back of momentum in the company's online business. In the first quarter of fiscal 2023, its freestanding store in the U.S. saw impressive performance fueled by enhanced omnichannel capabilities and more demand for high-touch services.

The Estée Lauder’s strong presence in emerging markets has been a driver. Management is on track to expand its consumer reach in productive distribution across high-growth channels while strategically expanding brands into new countries.

However, the company expects the rest of fiscal 2023 to remain pressurized by temporary hurdles stemming from pandemic-led curbs in China, foreign currency headwinds, heightened inflation, supply-chain bottlenecks and the risk of sluggishness in certain markets globally.

(You can read the full research report on The Estee Lauder here >>>)

Shares of Aon have gained +2.7% over the past year against the Zacks Insurance - Brokerage industry’s gain of +2.9%. The company’s top line has been growing on buyouts and alliances, which have enhanced its capabilities and made it one of the largest insurance brokers. Solid Reinsurance Solutions and Commercial Risk Solutions segments continue to drive the top line.

Aon has been divesting non-core operations to streamline its business. It expects that focusing on more profitable operations will generate a higher return on equity. Its pooled employer plan has reached the milestone of $1 billion in U.S. assets and commitments.

The company engages in prudent capital deployment. It had around $6.7 billion fund left under its share buyback program as of Sep 30, 2022. However, elevated operating costs can put pressure on margins. A debt-laden balance sheet compared with a lower cash balance raises a concern.

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

Other noteworthy reports we are featuring today include Truist Financial Corporation (TFC), Synopsys, Inc. (SNPS) and Parker-Hannifin Corporation (PH).

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>>>