Today's Must Read
Restructuring Plans to Aid HSBC (HSBC), Weak Revenues a Woe
Electrification Efforts to Buoy Honda (HMC) Amid Weak Demand
Thursday, December 31, 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 salesforce.com, inc. (CRM), HSBC Holdings plc (HSBC) and Honda Motor Co., Ltd. (HMC). 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 >>>
Shares of salesforce have increased +36.7% over the past year against the Zacks Computer - Software industry’s gain of +36.8%. The Zacks analyst believes that the company is benefiting from a robust demand environment as customers are undergoing a major digital transformation. The rapid adoption of its cloud-based solutions is driving demand for its products. Salesforce’s sustained focus on introducing more aligned products as per customer needs is driving its top-line. Continued deal wins in the international market is another growth driver.
However, stiff competition is a concern. Besides, unfavorable currency fluctuations along with increasing investments in international expansions and data centers are an overhang on near-term profitability.
HSBC shares have underperformed the Zacks Banks - Foreign industry over the past year (-33.7% vs. -14.9%). The company’s initiatives to improve market share in the U.K. and China are likely to support financials over the long term. However, the Zacks analyst believes that these efforts might lead to a rise in costs in the near term, thus, hurting the bottom line to some extent. Moreover, global economic slowdown, low interest rate environment across the globe and weak loan demand will likely hamper revenue growth.
Nevertheless, the company’s strong capital position, initiatives to strengthen digital capabilities, extensive network across the world and efforts to improve operating efficiency through business restructuring are expected to support profitability in the quarters ahead.
Shares of Honda Motor have lost -0.5% over the past year against the Zacks Automotive – Foreign industry’s gain of +18.7%. The Zacks analyst believes that fiscal 2021 sales are still expected to decline year over year, thanks to the coronavirus pandemic. Further, high capex to develop advanced technologies may limit its near-term cash flows. Frequent recalls and elevated leverage of the firm also play spoilsports.
However, focus on the development of electric and self-driving cars bodes well for Honda, given the changing dynamics in the automobile industry. The firm’s strategic collaborations with companies like General Motors, GAC Group and Hitachi, among others, are expected to expand the business and bolster prospects.
Other noteworthy reports we are featuring today include Kinder Morgan, Inc. (KMI), Cintas Corporation (CTAS) and MarketAxess Holdings Inc. (MKTX).
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
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>>>