Friday, March 31, 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 SAP SE (SAP), Elevance Health, Inc. (ELV) and Diageo plc (DEO). 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 SAP have outperformed the Zacks Computer - Software industry over the past year (+13.9% vs. -6.1%), reflecting momentum in its cloud business (especially the new Rise with SAP solution) across all regions.

Momentum in SAP’s business technology platform particularly the S/4HANA solutions augurs well. The company’s restructuring plan is expected to better align its operating models and go-to-market approach with its accelerated cloud transformation. Frequent product launches like SAP Build and strategic collaborations bodes well.

However, the company’s performance is affected due to continued softness in software licenses and support business segment coupled with supply chain constraints, global macroeconomic weakness and geopolitical instability. Also, increasing research & development and sales & marketing expenses coupled with stiff competition in the cloud space are concerns.

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

Shares of Elevance Health have declined -8.1% over the past year against the Zacks Medical Services industry’s decline of -29.7%.

While margins pressures and a relatively debt-heavy balance sheet are causes for concern, Elevance Health is benefiting from improving top line on the back of premium rate increases and higher memberships. Acquisitions, collaborations and product expansions have enabled the company to strengthen its business portfolio.

Its well-performing Medicare and Medicaid businesses, coupled with several contract wins, are expected to drive its membership going ahead. Growing premiums, stemming from rate increases are aiding the company's results. Elevance Health utilizes excess capital to boost shareholder value.

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

Shares of Diageo have gained +6.8% over the past six months against the Zacks Beverages - Alcohol industry’s gain of +10.3%. The company’s robust sales growth, organic operating margin expansion, productivity savings and favorable currency impact aided first-half fiscal 2023 results. Effective marketing and exceptional commercial execution further aided the results.

Price/mix gained from a positive mix due to the robust growth in super-premium-plus brands, particularly scotch, tequila and Chinese white spirits. DEO’s margin trends were favorable in the first half, thanks to the its premiumization efforts, recovery in markets, pricing actions and supply productivity savings, which mostly offset the cost inflation.

The company retained its optimistic view for the medium to long term. However, inflationary pressures from higher glass, ocean freight and other transportation costs, and currency headwinds are concerning.

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

Other noteworthy reports we are featuring today include Schlumberger Limited (SLB), Petróleo Brasileiro S.A. - Petrobras (PBR) and Charter Communications, Inc. (CHTR).

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>>>