Today's Must Read
Product Rollouts & Growing Merchant Base Aid Shopify (SHOP)
BP (BP) Banks on Renewable Energy, Refining Business Hurts
Thursday, December 17, 2020
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 PayPal Holdings (PYPL), Shopify (SHOP) and BP p.l.c. (BP). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
PayPal shares have outperformed the Zacks Internet Software industry in the year to date period (+118.5% vs. +107.9%). The Zacks analyst believes that PayPal is benefiting from robust growth in total payments volume owing to increasing net new active accounts.
Further, strengthening customer engagement on the company’s platform is a major positive. Furthermore, Venmo’s improving monetization efforts and rising adoption rate across various platforms are aiding the total active accounts. Additionally, growing momentum of core peer to peer and PayPal Checkout experiences is a tailwind.
Also, benefits from Honey buyout are positives. However, increasing credit loss reserves owing to macroeconomic projections on account of coronavirus is a serious matter of concern. Further, intensifying digital payment competition is a risk.
Shares of Shopify have gained +198.2% over the past year against the Zacks Internet Services industry’s gain of +32.8%. The Zacks analyst believes that Shopify is well poised to gain from the e-commerce boom along with growth in the merchant base as well as increases in buying of essential items due to COVID-19 led lockdowns and shelter-in-place guidelines.
Robust uptick in Shopify Shipping, Shopify Payments and Shopify Capital will drive the top line. Further, solid adoption of new merchant-friendly applications amid evolving retail environment, holds promise. Additionally, partnerships with TikTok, Walmart and Facebook are expected to expand merchant base, going ahead.
Also, initiatives aimed at international expansion are noteworthy. However, higher investments on product development and fulfillment platform amid stiff competition in the e-commerce space are likely to limit margin expansion in the near term.
BP’s shares have lost -7.5% over the past six months against the Zacks International Integrated Oil industry’s rise of +1.7%. The Zacks analyst believes that weak refining marker margin & declining refinery throughput since the coronavirus pandemic has dented fuel demand have been affecting downstream business.
Meanwhile, BP has a strong portfolio of upstream projects, which has been backing impressive production growth. Since 2016, BP has placed several key upstream projects online. All the key projects BP has been delivering over the years backed the company to post record production levels.
The company also plans to boost capital spending on renewable power business as most oil companies in Europe have decided to combat climate change by reducing greenhouse gas and carbon emissions, and focusing on clean energy. However, the company’s balance sheet has more debt exposure as compared with its peers.
Other noteworthy reports we are featuring today include Gilead Sciences (GILD), Cigna (CI) and Southern (SO).
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
Director of Research
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>>>