Monday, February 5, 2024

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 Meta Platforms, Inc. (META), Eaton Corporation plc (ETN) and The Cigna Group (CI). 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 >>>

Meta Platforms shares have outperformed the Zacks Internet - Software industry over the past year (+155.3% vs. +65.4%), with the blockbuster December-quarter results adding to the stock's momentum. The company is benefiting from steady user growth across all regions, particularly Asia Pacific. Increased engagement for its offerings like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver.

Meta Platforms’ is leveraging AI to recommend Reels content, which is driving traffic on Instagram and Facebook. Its innovative portfolio, which includes Threads, Reels and Llama 2, is likely to aid prospects.

However, challenging macroeconomic conditions remain a headwind for Meta’s advertising revenues, along with targeting and measurement headwinds due to Apple’s iOS changes. Slow monetization of Reels, along with mounting operating losses at Reality Labs, are concerns.

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

Shares of Eaton have outperformed the Zacks Manufacturing - Electronics industry over the past year (+69.4% vs. +28.4%). The company’s research and development are allowing it to develop new products to provide efficient power management solutions.

It will benefit from improving end-market conditions, increasing demand from the new AI data center and contributions from its organic assets. Eaton is expanding via acquisitions and its rising backlog shows demand for its products. Its strategy to manufacture in the region of its end market has helped it cut costs.

However, Eaton’s global operations expose it to unpredictable currency translation, cyber security threats, changes in tax rates and security breaches, which might impact operations. The shortage of raw materials and supplier insolvencies might impact production and operations.

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

Cigna shares have outperformed the Zacks Medical - HMOs industry over the past year (+14.3% vs. +7.7%). The company’s revenues have been increasing consistently for the past few years, driven by acquisitions, superior operating performance and a high-quality product portfolio. It expects adjusted revenues to jump 20% in 2024.

Value-enhancing divestitures will help it to focus on core growth areas. High membership on the back of a diversified portfolio, wide agent network and superior service are major positives. It reported strong Q4 results, driven by higher memberships. The company has been resorting to prudent capital deployment moves through share repurchases and dividend payments.

However, high leverage can affect its financial flexibility. Rising operating costs due to higher pharmacy and other service costs are a concern. As such, the stock warrants a cautious stance.

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

Other noteworthy reports we are featuring today include Colgate-Palmolive Company (CL), Parker-Hannifin Corporation (PH) and Amphenol Corporation (APH).

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>>>