Thursday, May 16, 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 Oracle Corporation (ORCL), Bank of America Corporation (BAC) and McDonald's Corporation (MCD), as well as two micro-cap stocks Miller Industries, Inc. (MLR) and Via Renewables, Inc. (VIA). 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 >>>

Oracle shares have outperformed the Zacks Computer - Software industry over the year-to-date period (+16.1% vs. +10.1%). The company is gaining from the ongoing momentum across its cloud business, driven by the strong uptake of Oracle Cloud Infrastructure and Autonomous Database offerings. The solid adoption of cloud-based applications, comprising NetSuite Enterprise Resource Planning (ERP) and Fusion ERP bodes well.

Oracle’s Gen 2 Cloud is delivering better performance at a lower cost due to high bandwidth and low-latency RDMA networks. ORCL’s continued investment in cloud infrastructure positions it well for sustained growth in the dynamic software industry. The company’s partnership with Microsoft and Nvidia is noteworthy. We expect fiscal 2024 net sales to grow 6.3% from 2023.

However, higher spending on product enhancements, especially toward the cloud platform amid increasing competition in the cloud domain, is likely to limit margin expansion.

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

Shares of Bank of America have gained +16.3% over the year-to-date period against the Zacks Banks - Major Regional industry’s gain of +17.8%. The company’s first-quarter 2024 results were aided by strength in the investment banking (IB) business. While higher funding costs are a concern, the company’s net interest income (NII) will likely be positively impacted in the current high-rate environment.

The opening of financial centers and improved digital capabilities will support the top line. While the capital markets activity improved of late, the challenging macroeconomic environment might once again weigh on the IB business. Due to investments in franchise, overall costs will remain high.

(You can read the full research report on Bank of America here >>>)

McDonald's shares have underperformed the Zacks Retail - Restaurants industry over the year-to-date period (-7.1% vs. -2.4%). The company’s increased costs and expenses negatively impacted the first quarter’s bottom line. McDonald’s expectation of increased commodity and labor inflation is concerning for its prospects.

Nevertheless, the top and bottom lines increased year over year by 5% and 2%, respectively. The company’s results showcase increasing global comparable sales and systemwide sales to loyalty members.

The uptrend was backed by average check growth driven by strategic menu price increases, effective marketing campaigns, along with continued digital and delivery growth. Also, its focus on Accelerating the Arches strategy is encouraging.

(You can read the full research report on McDonald’s here >>>)

Shares of Miller Industries have outperformed the Zacks Automotive - Original Equipment industry over the past year (+76.7% vs. -10.4%). The company showcases strong growth, with Q1 2024 revenues hitting $349.9 million, up 24% year over year, driven by increased demand and chassis shipments. Gross profit rose 45.5% to $44.2 million, with margins expanding to 12.6% due to enhanced manufacturing and supply chain efficiencies.

The firm boosts shareholder value with a 5.6% dividend increase and a $25 million share repurchase plan, reflecting confidence in its financial stability and long-term strategy. Positioned as a leader in the growing global towing equipment market, Miller benefits from its broad product range and strong brand while continuing to innovate, like their patented LCG design in car carriers.

However, challenges include intense competition, volatile raw material costs, regulatory uncertainties, and reliance on specific market sectors, posing risks to profitability.

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

Via Renewables’ shares have gained +24.8% over the past six months against the Zacks Alternative Energy - Other industry’s gain of +36.3%. The company demonstrates robust customer growth, adding 41,000 RCEs in first-quarter 2024, reaching 338,000. This, coupled with a recent acquisition of 12,500 RCEs, indicates effective growth strategies.

Financially, VIA rebounded with a first-quarter net income of $19.1 million, reversing a previous loss in the prior-year quarter on favorable hedge gains. VIA boosted its net cash from operations in the first quarter, signaling improved efficiency and capital management.

However, challenges persist with a decrease in adjusted EBITDA and retail gross margins, primarily in the electricity and natural gas segments. Rising G&A expenses and high competition, alongside customer acquisition costs, further pressure profitability. These factors, combined with credit risks in certain utility territories, may impact long-term financial health.

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

Other noteworthy reports we are featuring today include Eaton Corporation plc (ETN), Honeywell International Inc. (HON) and Sanofi (SNY).

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>>>