Today's Must Read
New Branches, Buyouts Support JPMorgan (JPM) Amid Low Rates
Chevron (CVX) Boosts Permian Position with Noble Buy
Friday, November 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 Microsoft Corp. (MSFT), JPMorgan Chase & Co. (JPM) and Chevron Corporation (CVX). 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 Microsoft have outperformed the Zacks Computer – Software industry year-to-date (+51.9% vs. +41.7%). The Zacks analyst believes that Microsoft’s performance is benefiting from strength in its Azure cloud platform amid accelerated global digital transformation.
Teams’ user growth is gaining from continuation of remote work and mainstream adoption of hybrid/flexible work model. Recovery in advertising and job market boosted LinkedIn and Search revenues. Solid uptake of new Xbox consoles is aiding the gaming segment performance. The company is also witnessing growth in user base of its different applications including Microsoft 365 suite, Dynamics and Power Platform.
However, Microsoft expects Surface revenues to decline in the fiscal second quarter owing to supply chain disruptions. Increasing spend on Azure enhancements amid stiff competition in the cloud space from Amazon is likely to dent margins.
Shares of JPMorgan have gained +1.5% in the past six months against the Zacks Banks - Major Regional industry’s gain of +4.3%. The Zacks analyst believes that the company’s third-quarter 2021 results reflected solid capital markets performance, modest loan growth, and reserve releases.
Opening new branches, strategic buyouts, global expansion and digitization initiatives, and decent mortgage banking business are expected to continue aiding financials. However, lower interest rates and the Federal Reserve’s decision to not change the same in the near term are expected to keep hurting the company’s margins and interest income. Normalization of the trading business is likely to somewhat hamper fee income growth. Steadily rising expenses also pose a concern.
Shares of Chevron have underperformed the Zacks Oil and Gas - Integrated - International industry in the year to date period (+38.8% vs. +39.1%), however the Zacks analyst believes that the company is poised for capital appreciation based on a slew of tailwinds.
The supermajor is considered one of the best placed global integrated oil firms to achieve sustainable production ramp-up. America’s No. 2 energy company’s existing project pipeline is among the best in the industry, thanks to its premier position in the lucrative Permian Basin.
In shareholder friendly moves, the integrated major recently hiked its dividend by 3.9% and revived the stock repurchase program. Consequently, Chevron is viewed as a preferred energy major to own now.
Other noteworthy reports we are featuring today include Medtronic plc (MDT), Texas Instruments (TXN) and Danaher Corp. (DHR).
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>>>