Today's Must Read
Intelligrated Unit Drives Honeywell (HON), Soft Demand Ails
Higher Ground Revenues Drive FedEx (FDX) Amid Coronavirus Woes
Wednesday, March 3, 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 Netflix (NFLX), Honeywell International (HON) and FedEx (FDX). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Netflix shares have underperformed the Zacks Broadcast Radio and Television industry over the past year (+37.8% vs. +55.5%). The Zacks analyst believes that Netflix is dominating the streaming space on the back of its diversified content portfolio, which is attributable to heavy investments in the production and distribution of localized, foreign-language content.
Higher number of originals are expected to aid user-base growth in 2021 despite rising competition from Apple TV+, Amazon prime video, HBO Max, Disney+, Peacock, Discovery+ and TikTok. The company plans to release at least one new original film every week in 2021.
User-friendly features like Downloads For You and more efficient Parental Controls are key positives. The launch of low-priced mobile plans is also expected to expand Netflix’s subscriber base in Asia Pacific. However, Netflix’s leveraged balance sheet and higher streaming obligation is also a concern.
Shares of Honeywell have gained +24.4% in the last six months against the Zacks Diversified Operations industry’s gain of +27%. The Zacks analyst believes that strength in defense and space businesses as well as solid demand for warehouse automation products are likely to boost Honeywell’s revenues in the quarters ahead.
Also, solid demand for personal protective equipment, along with a strong backlog conversion rate, will act as tailwinds. Increased commercial and operational excellence initiatives are likely to improve its near-term profitability.
Also, strong cash flows allow it to effectively deploy capital for making acquisitions and paying out dividends. The company believes that the coronavirus outbreak-led market downturn and weak commercial aerospace will adversely impact its near-term results.
FedEx shares have lost -12.8% over the past three months against the Zacks Air Freight and Cargo industry’s loss of -6.5%. The Zacks analyst is pleased with the company’s efforts to reward its shareholders through dividends and buybacks despite the present turbulent scenario.
Repeating the last few quarters' trend, surging e-commerce demand aided FedEx’s results in the second quarter of fiscal 2021. The company beat on revenues as well as earnings per share. Both metrics also improved year over year.
Revenues at the FedEx Ground segment, which handles e-commerce deliveries for many retailers, surged 38.2% on higher residential volumes, which are also are increasing with most people placing orders online. The outperformance was also led by an uptick in demand for business-to-business delivery services.
Other noteworthy reports we are featuring today include Target (TGT), Bayer (BAYRY) and Carvana (CVNA).
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
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>>>