Monday, March 18, 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 Amazon.com, Inc. (AMZN), American Express Company (AXP) and Philip Morris International Inc. (PM). 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 >>>

Amazon.com shares have outperformed the Zacks Internet - Commerce industry over the past year (+78.5% vs. +53.4%). The company is gaining on solid Prime momentum owing to ultrafast delivery services and strong content portfolio. Strengthening relationship with third-party sellers is a positive.

Additionally, strong adoption rate of AWS is aiding the company’s cloud dominance. Expanding AWS services portfolio is continuously helping Amazon in gaining further momentum among the customers. Robust Alexa skills and expanding smart home products portfolio are positives.

The company’s strong global presence and solid momentum among the small and medium businesses remain tailwinds. Growing capabilities in grocery, pharmacy, healthcare and autonomous driving are other positives. Also, deepening focus on generative AI is a major plus. However, adverse macroeconomic challenges remain concerns.

(You can read the full research report on Amazon.com here >>>)

Shares of American Express have outperformed the Zacks Financial - Miscellaneous Services industry over the past year (+40.8% vs. +23.5%). The company’s growth initiatives, like launching new products, reaching new agreements and forging alliances, are boosting its revenues.

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

However, with higher utilization of the firm’s cards, expenses in the form of card member services and card maember rewards are likely to go up and strain its margins. Its current debt level amid a high-interest rate environment induces a rise in interest expenses. AmEx seems overvalued at the current price/earnings level. As such, the stock warrants a cautious stance.

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

Shares of Philip Morris have outperformed the Zacks Tobacco industry over the past year (+3.1% vs. -0.2%). The company has demonstrated impressive resilience amid rising costs due to its smoke-free strength. The company has been gaining from its pricing power. Higher pricing variance was an upside to the company’s performance in the fourth quarter of 2023 and is likely to remain a driver.

The consistent success of IQOS and the impressive growth of ZYN have further solidified the company’s position, keeping it well-placed to become a majority smoke-free company by 2030. For 2024, management expects net revenues to increase 6.5-8% on an organic basis.

However, growth-oriented investments, especially in IQOS ILUMA, may impact profits. Also, management expects the increased cost of leaf and wages to linger into 2024 before easing thereafter. Apart from this, Philip Morris has been witnessing soft cigarette volumes, which declined 1.4% in 2023.

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

Other noteworthy reports we are featuring today include NIKE, Inc. (NKE), Bayer Synopsys, Inc. (SNPS) and Valero Energy Corporation (VLO).

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>>>