Today's Must Read
Coca-Cola's (KO) Digital Investments to Aid the Top Line
Oracle (ORCL) Benefits from Strong Uptake of Cloud Solutions
Friday, June 4, 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 Berkshire Hathaway Inc. (BRK.B), The CocaCola Company (KO) and Oracle Corporation (ORCL). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Berkshire Hathaway shares have outperformed the Zacks Insurance - Property and Casualty industry in the last one-year period (+45.5% vs. +31.4%) on the back of the financial conglomerate's impressive investments over the years. A strong cash position supports earnings-accretive bolt-on buyouts and indicates the company's financial flexibility.
Continued insurance business growth fuels increase in float, drive earnings and generates maximum return on equity. The non-insurance businesses are delivering improved results with increased revenues over the past few years. A sturdy capital level provides further impetus.
However, exposure to catastrophe loss induces earnings volatility and also affects the property and casualty underwriting results of Berkshire. Huge capital expenditure remains a headwind for the company.
Shares of CocaCola have modestly outperformed the Zacks Beverages - Soft drinks industry in the last three-month period (+9.6% vs. +7.8%), thanks to its robust earnings surprise trend that continued in first-quarter 2021. This marked the sixth straight quarter of earnings beat.
Additionally, the top line beat estimates after reporting a miss in the prior-quarter. Also, revenues grew 5% year over year, while organic revenues were up 6%. The Zacks analyst believes that the company’s top line benefited from better price/mix and an increase in concentrate sales. Gains from aggressive cost management aided margins. The company is poised to gain from the streamlining of portfolio and accelerating investments to expand digital presence.
However, continued pressures in the away-from-home channel, which account for nearly half of its revenues, affected revenues. Also, gains in the global value share in NARTD beverages was offset by negative channel mix.
Oracle shares have outperformed the Zacks Computer – Software industry in the year-to-date period (+25.3% vs. +8.9%). The Zacks analyst believes that Oracle is gaining from ongoing momentum witnessed across its cloud business, driven by solid adoption of data cloud solutions, Enterprise Resource Planning (ERP) and Autonomous Database offerings.
Further, strong uptake of cloud-based solutions, comprising NetSuite ERP and Fusion ERP, bodes well. Also, companies like MercadoLibre, Xactly, 8x8 and Zoom Video have selected Oracle Cloud Infrastructure services, which is a testament to the strength of its cloud offerings. Solid demand for the Oracle Dedicated Region Cloud@Customer supported by ML is also anticipated to drive the top line. Moreover, partnership with Accenture favors prospects.
However, rising spend on product enhancements amid stiff competition in the cloud market is likely to limit margin expansion.
Other noteworthy reports we are featuring today include Bristol-Myers Squibb Company (BMY), General Motors Company (GM), and FedEx Corporation (FDX).
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>>>