Thursday, February 8, 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 Microsoft Corporation (MSFT), Exxon Mobil Corporation (XOM) and Toyota Motor Corporation (TM). 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 >>>

Microsoft shares have outperformed the Zacks Computer - Software industry over the past year (+58.5% vs. +54.0%). The company is riding on strong growth from Intelligent Cloud and Productivity and Business Processes. Intelligent Cloud revenues have been driven by growth in Azure and other cloud services.

Productivity and Business Processes revenues continues to increase due to strong adoption of Office 365 Commercial solutions. Continued momentum in the small and medium businesses and frontline worker offerings, as well as gain in revenue per user drove top-line growth.

However, More Personal Computing revenues are suffering from continued weakness in Windows and Devices businesses. Steady performance in Talent Solutions aided LinkedIn revenues. Also, declining gaming revenues has been a headwind. Increasing spend on Azure enhancements amid stiff competition in the cloud space remains a concern.

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

Shares of Exxon Mobil have underperformed the Zacks Oil and Gas - Integrated - International industry over the past year (-7.5% vs. -3.5%). The company is lagging its peers when it comes to shareholders’ returns. The energy giant’s financials were weakened by years-long significant spending on low-return developments and the coronavirus pandemic. Also, high input cost is hurting refining operations.

Nevertheless, ExxonMobil's bellwether status and an optimal integrated capital structure that has historically produced industry-leading returns make it a relatively lower-risk energy sector play. In Stabroek Block, located offshore Guyana, ExxonMobil has made many major discoveries that significantly improve its production outlook.

The advantaged growth projects of Guyana have lower greenhouse gas intensity than most of the oil and gas-producing resources across the globe. ExxonMobil’s deal to acquire Pioneer Natural will bolster its presence in the prolific Permian Basin.

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

Toyota Motor’s shares have outperformed the Zacks Automotive - Foreign industry over the past year (+56.5% vs. +38.2%). The company’s continued demand for vehicles and a robust lineup of trucks and sport utility vehicles are set to fuel Toyota’s sales volumes.

The Japanese auto giant aims to generate 40% of its global sales from electric vehicles by 2025 and 70% by 2030. It plans to invest 4 trillion yen ($35 billion) for a lineup of 30 battery electric vehicles by 2030. For fiscal 2024, Toyota projects vehicle sales of 9.6 million units, indicating an increase from 8.82 million units sold in fiscal 2023. Its investor-friendly moves also spark optimism.

However, commodity cost inflation is expected to continue to weigh on the company’s margins. High capex and R&D expenses on the development of electric and autonomous vehicles are likely to dent its near-term margins and cash flows. The stock warrants a cautious stance at present.

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

Other noteworthy reports we are featuring today include GSK plc (GSK), Chipotle Mexican Grill, Inc. (CMG) and Carrier Global Corporation (CARR).

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>>>