Today's Must Read
Walmart (WMT) Benefits from Robust E-Commerce Operations
Strong Demand Drives Honeywell (HON), Aerospace Sector Ails
Friday, July 16, 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 Visa (V), Walmart (WMT), and Honeywell International (HON). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
Shares of Visa have outperformed the Zacks Financial Transaction Services industry over the past year (+27.7% vs. +7.9%). The Zacks analyst believes that a number of acquisitions executed by the company have not only driven revenues but also paved the way for long-term growth. Visa’s shift to digital modes of payment has proved to be a boon.
The coronavirus vaccine development and the gradual revival of consumer confidence is likely to boost spending, thereby expanding business volumes. It is well-equipped with sufficient resources to service its indebtedness. However, high operating expenses continue to weigh on operating margins. Sluggishness in cross-border business due to the pandemic is another major concern.
Walmart shares have lost -1.5% over the last six months against the Zacks Supermarkets industry’s decline of -0.5%, but continued e-commerce strength remains an upside. The Zacks analyst believes that Walmart is gaining from its sturdy comps record, driven by its constant omnichannel efforts. This evident from the fact that it has posted positive comps in the U.S. division for 27 quarters on the trot.
Stay-at-home trends have been boosting e-commerce sales, which increased across all units in first-quarter fiscal 2022. With curbs being lifted, the company’s U.S. store environment is in good shape, while e-commerce also remains on the growth trajectory. However, the second-quarter earnings view suggests a decline, due to divestitures related to the International unit.
Shares of Honeywell have gained +0.7% in the past three months against the Zacks Diversified Operations industry’s gain of +5%. 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.
Increased commercial and operational excellence initiatives are likely to improve its near-term profitability. Moreover, strong cash flows allow it to deploy capital for making acquisitions and paying out dividends. High debt levels, however, are likely to increase its financial obligations. The company is also subject to political, economic and geopolitical risks due to its extensive geographic presence.
Other noteworthy reports we are featuring today include Fidelity National Information Services (FIS), Sinopec (SNP) and Petrobras (PBR).
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>>>