Today's Must Read
Visa (V) Rides on Acquisitions, Technological Enhancement
ExxonMobil (XOM) Banks on Offshore Guyana Oil Discoveries
Monday, April 26, 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 Tesla (TSLA), Visa (V), and Exxon Mobil (XOM). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Shares of Tesla haven't done much this year, but they have been standout performers over the past year (up +362% vs. +48.2%) for the S&P 500 index. The Zacks analyst believes that the company has a first-mover advantage in the e-mobility space with high range vehicles, superior technology and software edge.
Further, robust Model 3/Y demand, Shanghai Gigafactory prospects, amazing line-up of upcoming products and aggressive expansion efforts bode well for the firm. However, an unclear 2021 vehicle delivery target raises concern.
Moreover, the company’s high operating costs, as well as massive capex due to heavy investments related to the construction of gigafactories and the development of battery tech are likely to weigh on the near-term financials.
Visa shares have gained +21.6% over the last six months, inline with the Zacks Financial Transaction Services industry’s gain of +21%. The Zacks analyst believes that numerous acquisitions and alliances have paved the way for long-term growth and consistently drove Visa’s revenues.
Also, technological upgrades as well as a shift in payments to the digital modes have benefited the company. Meanwhile, the coronavirus vaccine development and the gradual revival of consumer confidence will drive spending, expanding the company's business volumes in turn.
However, high operating expenses stress the operating margins and ramped-up client initiatives are likely to dent the top line. Also, a sluggish cross-border business due to coronavirus looms on.
Shares of Exxon Mobil have gained +23.5% in the past three months against the Zacks Integrated Oil industry’s gain of +11.2%. The Zacks analyst believes that major discoveries in the Stabroek Block have enhanced prospects for the company's upstream businesses.
Meanwhile, Exxon Mobil's bellwether status in the energy space, optimal integrated capital structure that has historically produced industry leading returns, and management's track record of capex discipline across the commodity price cycle make it a relatively lower-risk energy sector play.
Moreover, Exxon expects its capital spending for 2021 to get covered by cashflows with the assumption that Brent crude oil price will be at $50 per barrel mark. Moreover, compared to 2019, this integrated energy firm projects annual structural expense savings of $6 billion by 2023.
Other noteworthy reports we are featuring today include SAP SE (SAP), Union Pacific (UNP) and Gilead Sciences (GILD).
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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>>>