Today's Must Read
Shell (RDS.A) to Benefit from LNG Demand Growth
Estee Lauder (EL) Benefits From Robust Skin Care Category
Monday, February 8, 2021
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 (AMZN), Royal Dutch Shell (RDS.A) and Estee Lauder (EL). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Amazon shares have essentially moved sideways after the record Q4 earnings report, though they have signficantly outperformed the S&P 500 over the past year (+55.5% vs. +18.2%). The Zacks analyst believes that the company has been benefiting from solid Prime momentum owing to ultrafast delivery services and expanding original content portfolio.
Further, strengthening AWS services and its growing adoption rate contributed well. Additionally, improving Alexa skills and features remained another positive. Expanding smart home products offerings were tailwinds.
However, accelerating coronavirus related expenses remain headwinds for the company’s margin expansion in the near term. Also, rising cloud competition from Microsoft and Google poses a risk. Growing transportation costs remain concerns.
Shares of Royal Dutch Shell have gained +21% in the last six months against the Zacks International Integrated Oil industry’s gain of +7.7%. The Zacks analyst believes that the company is poised for capital appreciation based on a slew of tailwinds.
Shell’s trading business has been instrumental in helping the supermajor partly cushion the impact of the coronavirus-induced oil price slump. Further, the company’s position as a key supplier of liquefied natural gas should benefit its long-term cash flow growth on the back of attractive growth opportunities.
It is also making solid progress toward the transition to a renewable energy-focused future and pledged to halve carbon emissions over the next five decades. Meanwhile, the firm’s high investment grade rating translates into low borrowing rates. Consequently, Shell is viewed a preferred energy major to own now.
Estee Lauder shares have gained +14.3% over the past three months against the Zacks Cosmetics industry’s rise of +13%. The Zacks analyst believes that the company’s robust cost-control measures, amid the coronavirus outbreak, drove its operating income margin in second-quarter fiscal 2021.
Also, its Skin Care business is growing steadily. This along with solid online growth bodes well, especially amid the pandemic. However, some store closures and reduced traffic in reopened ones are a concern.
Also, international travel restrictions have been negatively impacting consumer traffic in most travel retail locations. Apart from these, as part of its two-year Post-COVID Business Acceleration Program introduced in August 2020, the company had unveiled plans to reduce retail footprint.
Other noteworthy reports we are featuring today include Cigna (CI), Enbridge (ENB) and Norfolk Southern (NSC).
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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>>>