Friday, April 28, 2023

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including American Express Co. (AXP), Enbridge Inc. (ENB) and Micron Technology, Inc. (MU). 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 American Express have outperformed the Zacks Financial - Miscellaneous Services industry over the past six months (+7.6% vs. -2.5%). The company has adopted several growth initiatives, such as launching new products, reaching new agreements and forging alliances, are boosting its revenues. We expect the top line at $60.8 billion in 2023.

Consumer spending on T&E, which carry higher margins for AmEx, is advancing well. Its balance sheet looks strong with manageable debt. Solid cash-generation abilities enable the pursuit of business investments and capital deployment.

However, with higher utilization of the company’s cards, expenses in the form of card member services and card member rewards are likely to strain the margins. Also, marketing and business development expense is expected to rise. As such, the stock warrants a cautious stance.

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

Enbridge’s shares have outperformed the Zacks Oil and Gas - Production and Pipelines industry over the past six months (+4.3% vs. +4.1%). The company has the longest and most sophisticated oil and liquids pipeline system in the world, which spreads across 17,809 miles. Hence, a significant portion of the midstream operator’s earnings is generated from transportation operations, driven by a string of long-term contracts.

ENB sanctioned C$8 billion of organic growth projects in 2022, bringing its total backlog to C$17 billion. The firm expects to put more than C$10 billion growth projects into service in 2024 and beyond. This is expected to generate significant EBITDA growth in the coming years.

However, ENB’s significant debt exposure is concerning. ENB reported weak fourth-quarter results due to lower contributions from the Renewable Power Generation segment. Also, it has mostly been yielding lower dividends than the industry.  As such, the stock warrants a cautious stance.

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

Shares of Micron Technology have outperformed the Zacks Semiconductor Memory industry over the past six months (+17.0% vs. +14.9%). The company is witnessing growing demand for memory chips from cloud-computing providers and acceleration in 5G (fifth-generation) cellular network adoptions.

Rising mix of high-value solutions, 5G adoption in Internet of Things devices and wireless infrastructure, enhancement in customer engagement and improvement in cost structure are growth drivers.

Nonetheless, Micron near-term prospect looks gloomy as weakening consumer spending is negatively impacting demand for memory chips used in personal computers (PCs) and smartphones. Bit shipments for the DRAM and NAND memory chips may decline in the near-term as PC makers are adjusting their inventory due to weakened demand.

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

Other noteworthy reports we are featuring today include Old Dominion Freight Line, Inc. (ODFL), The AES Corp. (AES) and Nordson Corp. (NDSN).

Mark Vickery
Senor Editor

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>>>