Today's Must Read
Toyota (TM) to be Driven by Ambitious Electrification Goals
Solid Adoption of Cloud Solutions Aids IBM Amid High Debt
Tuesday, April 13, 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 The Home Depot (HD), Toyota Motor (TM), and International Business Machines (IBM). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Shares of The Home Depot have modestly underperformed the Zacks Retail Building Products industry over the past year (+54.8% vs. +62.8%), though they have been standout performers otherwise. The Zacks analyst believes that the company’s interconnected retail strategy and underlying technology infrastructure have helped boost web traffic in fiscal 2020.
During the fourth-quarter fiscal 2020, the company witnessed continued strong demand for home improvement projects. Also, broad-based strength across its business and geographies led to comparable sales growth.
However, the company has been witnessing soft margins trend on higher expenses. Negative product mix and pressures from higher transportation costs have been headwinds. It also provided a lower-than-expected view for fiscal 2021.
Toyota shares have gained +17.2% over the last six months against the Zacks Foreign Automotive industry’s gain of +26.1%. The Zacks analyst believes that partnership with Subaru and Mazda is likely to drive Toyota's electrification plans. Collaboration with Hino, Aurora, Uber and Pony.ai also augur well for the firm.
Meanwhile, the auto giant from Japan has an array of brands including Toyota, Lexus and Scion, which position it for solid prospects. The upward revision of Toyota’s fiscal 2021 view is encouraging. The company now projects 2021 operating income to be ¥2,000 billion, up from the prior estimate of ¥1,300 billion.
The firm’s sharp focus on electric vehicles (EVs) and driverless cars offer ample growth visibility. Toyota targets to achieve 40% of global sales from EVs by 2025 and nearly 70% by 2035.
Shares of IBM have gained +1.4% in the past three months against the S&P 500’s gain of +9.4%. The Zacks analyst believes that strong patent portfolio and solid uptake of IBM’s cloud-based solutions, blockchain, security, and digital transformation offerings bode well for the company.
Furthermore, synergies from the Red Hat buyout are strengthening its competitive position in the hybrid cloud market. The company is also poised to gain from spin-off of legacy infrastructure services business as it focuses on its hybrid cloud strategy.
However, intense competition in the cloud computing market from Amazon Web Services and Microsoft Azure remains a major headwind. Additionally, higher current debt levels amid extensive restructuring activities are other concerns.
Other noteworthy reports we are featuring today include Merck (MRK), AbbVie (ABBV) and CVS Health (CVS).
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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>>>