Wednesday, February 25, 2026

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 SAP SE (SAP), Linde plc (LIN) and Parker-Hannifin Corp. (PH), as well as two micro-cap stocks Daily Journal Corp. (DJCO) and Espey Mfg. & Electronics Corp. (ESP). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.

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 >>>

Ahead of Wall Street

The daily 'Ahead of Wall Street' article is a must-read for all investors who would like to be ready for that day's trading action. The article comes out before the market opens, attempting to make sense of that morning's economic releases and how they will affect that day's market action. You can read this article for free on our home page and can actually sign up there to get an email notification as this article comes out each morning.

You can read today's AWS here >>> Pre-Markets Push Higher Ahead of NVIDIA Earnings

Today's Featured Research Reports

Shares of SAP have underperformed the Zacks Computer - Software industry over the past six months (-27.3% vs. -25.8%). The company is facing "cloud backlog," which is pressured by deal mix and longer sales cycles, delaying near-term recognition. Continued weak software license and services revenues hurt it.

Nevertheless, SAP’s performance hinges on strong Cloud ERP growth and uptake of its Rise with SAP and Grow with SAP solutions amid macro and geopolitical tensions. Solid booking momentum sets up SAP for faster top-line growth through 2027. Steady adoption of Business Data Cloud and Business AI innovations is a catalyst. The current cloud backlog continues to rise, despite structural headwinds from large enterprise contracts with termination-for-convenience clauses. 

SAP forecasts record €10 billion free cash flow in 2026, driven by efficiency, disciplined capital allocation and AI adoption, while a new €10 billion buyback signals strength in long-term cash flows, margin expansion and disciplined shareholder returns.

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

Linde’s shares have outperformed the Zacks Chemical - Specialty industry over the past six months (+6.2% vs. +5.4%). The company is one of the top players in the industrial gas business, known for its steady profit growth, smart use of its money and industry-leading efficiency. Linde holds a record-high order book of $10 billion, with projects deemed highly reliable thanks to their fixed-fee contracts and the company’s strong track record of successful execution.

Linde has maintained industry-leading operating margins with further improvements expected from cost-control programs and automation. The company reported strong fourth-quarter results due to higher pricing and increased volumes from the Americas segment. 

Yet, LIN is not very hopeful about Europe’s economy this year. Moreover, prices for helium are falling at a high single-digit pace due to an oversupply in the market, a trend affecting the global market. Weakness in China’s manufacturing sector also pose risks.

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

Shares of Parker-Hannifin have outperformed the Zacks Manufacturing - General Industrial industry over the past six months (+37.2% vs. +18%). The company is benefiting from steady demand in the commercial and military end markets across both OEM and aftermarket channels within the Aerospace segment. 

The accretive acquisitions spark optimism in the stock. The Win strategy is driving its margins and allowing the company to continue returning value to shareholders. In April 2025, Parker-Hannifin hiked its quarterly dividend rate by 10% to $1.80 per share. Acquired assets are another positive factor driving its top line. 

However, weakness in the transportation market due to lower demand for automotive cars is worrisome. The company has been dealing with high costs and expenses, which are likely to affect its margins and profitability. The company’s high debt level is an added woe. Also, given Parker-Hannifin’s international presence, foreign currency headwinds are concerning.

(You can read the full research report on Parker-Hannifin here >>>)

Daily Journal’s shares have gained +12.6% over the past six months against the Zacks Publishing - Newspapers industry’s gain of +27.3%. This microcap company, with a market capitalization of $687.08 million, combines a sizable asset-backed balance sheet with a growing government-focused software business. As of Dec. 31, 2025, it held $529.5 million in assets, including $481.3 million in marketable securities with substantial unrealized gains, against just $20 million in margin debt, supporting liquidity and intrinsic value. 

Journal Technologies, ~78% of revenues, grew 12% YoY to $15.2 million with expanding pretax income, driven by recurring license, maintenance and e-filing fees from government clients. Deferred revenues of $18.8 million enhances visibility. 

Risks center on earnings volatility from a concentrated six-stock portfolio; Q1 results swung to a net loss on $11.7 million of unrealized losses. Margin borrowing, though declining, could amplify downside in a market drawdown. Shares trade at 2.57X EV/Sales and 1.6X EV/EBITDA, well below peer and market multiples, near historical medians. 

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

Shares of Espey Mfg. & Electronics have outperformed the Zacks Electronics - Military industry over the past six months (+30% vs. -30.1%). This microcap company with a market capitalization of $170.25 million centers on margin expansion, balance-sheet strength, and a solid defense pipeline, tempered by order and execution risks. Gross margin expanded to ~35% from ~25%, lifting net income to $5 million. 

Improved mix and efficiencies signal stronger cost absorption and operating leverage as backlog converts. Liquidity is robust, with $43 million in cash and securities and no debt usage. Rising contract liabilities ($26.3 million) alongside higher inventories suggest customers are partially funding working capital. 

Risks include lower fiscal 2026 order expectations, revenue volatility tied to milestone timing, engineering execution risk, customer concentration (top four ~65% of sales), and softer cash conversion. Shares have materially outperformed peers and the S&P. At 3.09X EV/sales and 12.71X EV/EBITDA, valuation sits above sub-industry averages but below broader market multiples. 

(You can read the full research report on Espey Mfg. & Electronics here >>>)

Other noteworthy reports we are featuring today include Altria Group, Inc. (MO), TE Connectivity plc (TEL) and Vulcan Materials Co. (VMC).

Mark Vickery
Senior 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>>>