Wednesday, April 12, 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 JPMorgan Chase & Co. (JPM), AbbVie Inc. (ABBV) and NextEra Energy, Inc. (NEE). 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 JPMorgan Chase have outperformed the Zacks Banks - Major Regional industry and the broader market over the past year (+0.9% vs. -16.7% for the industry and -8.2% for the S&P 500 index). The stock has lagged the broader market as well as the industry over the past month or so since the banking problems took center stage.

The stock was up in response to the last quarterly release on January 13th when the company handily beat estimates and provided reassuring commentary on broader business trends. Ahead of Q1 earnings release before the market's open this Friday (April 14th), estimates have largely been unchanged. A lot will be riding on management's characterization of business conditions following the Silicon Valley episode.

Higher rates and a steady loan demand are expected to have aided net interest income (NII) growth in the Q1 report. Yet, the volatile nature of the capital markets business and higher mortgage rates are likely to have made fee income growth challenging. We expect non-interest income (managed) to be relatively stable this year.

However, steadily rising costs is a major woe, and we expect the same to rise 5.8% in 2023. Given the possibility of an economic slowdown, provisions are likely to keep rising, with we projecting the same to jump 53.1% in 2023.

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

AbbVie shares have gained +4.5% over the past year against the Zacks Large Cap Pharmaceuticals industry’s gain of +7.5%. The company has several new drugs in its portfolio that have the potential to drive the top line to make up for lost Humira revenues. Skyrizi and Rinvoq have established outstanding launch trajectories bolstered by the approval in new indications.

It has several early/mid-stage candidates that have blockbuster potential. However, there are concerns about long-term sales growth since Humira generics have entered the U.S. market. Slowing consumer demand due to economic pressure is hurting the aesthetics franchise’s sales.

Nonetheless, though revenues are expected to decline in 2023, AbbVie expects to return to robust sales growth in 2025. Estimates have declined ahead of Q1 earnings. AbbVie has a positive record of earnings surprises in recent quarters.

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

Shares of NextEra Energy have gained +8.4% over the past six months against the Zacks Utility - Electric Power industry’s gain of +13.7%. The company continues to expand its operations through the efficient execution of organic projects and strategic acquisitions. The company currently has many renewable projects in its backlog and their completion will ensure reduced emissions.

The merger of Gulf Power and FPL strengthens NextEra’s position in Florida. FPL’s customer base is expanding as Florida’s economy improves and continues to boost demand for its services. NextEra has ample liquidity to meet its near-term debt obligations and efficient debt management acting as tailwinds. Its shares have lost narrower than industry in the past one year.

However, the nature of its business is subject to complex federal, state and other regulations. Risk in operating nuclear units, unfavorable weather conditions and an increase in supply costs adversely impact earnings.

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

Other noteworthy reports we are featuring today include The Boeing Company (BA), BP p.l.c. (BP) and Canadian Natural Resources Limited (CNQ).

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>>>