Today's Must Read
Walmart's (WMT) Omni-Channel Efforts Bode Well, Costs Hurt
PayPal (PYPL) Benefits From Increasing Total Payment Volume
Tuesday, December 21, 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 JPMorgan Chase & Co. (JPM), Walmart Inc. (WMT), and PayPal Holdings, Inc. (PYPL). 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 JPMorgan have underperformed the Zacks Major Regional Banks industry over the past year (+29.7% vs. +36%), however, things seem to be improving. The Zacks analyst believes that JPMorgan's business diversification efforts, strategic add-on acquisitions, and initiatives to expand the branch network in new markets are some of the major tailwinds.
Digitization initiatives and strength in the mortgage banking business are expected to further support JPM's financials. A robust investment banking pipeline is also likely to aid revenues. Low interest rates in the near term, however, are expected to keep hurting JPMorgan’s margins and interest income. Normalization of the trading business remains another major concern.
Walmart shares have lost -1.9% in the year to date period against the Zacks Supermarkets industry’s gain of +0.7%. However, things are not all that bad. The Zacks analyst believes that Walmart has been gaining from its sturdy comp sales record, driven by its constant omnichannel efforts. WMT has been posting positive comp sales in the U.S. division for the past 29 quarters.
A strong inventory position, increased contributions from advertising revenues and lower markdowns have somewhat helped WMT counter inflationary pressures. With more customers and members returning to stores and clubs, demand is expected to remain strong. Supply chain and labor market woes, however, are likely to weigh on the company’s margins.
Shares of PayPal have gained +2.9% in the last six months against the Zacks Internet Software industry’s loss of -10%. The Zacks analyst believes that Paypal has been benefiting from robust growth in total payments volume owing to increasing net new active accounts.
Venmo’s improving monetization efforts and rising adoption rate across various platforms have been aiding the total active accounts growth. Solid momentum of core peer to peer and PayPal Checkout experiences is another tailwind. Accelerating transaction revenues are also likely to continue driving revenues. Intensifying competition in the digital payment market, however, remains a major concern.
Other noteworthy reports we are featuring today include Automatic Data Processing, Inc. (ADP), Equinix, Inc. (EQIX) and Boston Scientific Corp. (BSX).
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>>>