Today's Must Read
Micron (MU) Benefits from Growing Memory-Chip Demand
Enbridge (ENB) to Gain From $10B Midstream Growth Projects
Friday, January 21, 2022
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 Walmart Inc. (WMT), Micron Technology, Inc. (MU), and Enbridge Inc. (ENB). 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 Walmart have underperformed the Zacks Supermarkets industry over the past year (-1.9% vs. +0.5%). Walmart has been encountering supply chain issues, inflation and rising labor costs that are hurting margins. The Zacks analyst, however, believes that a strong inventory position, increased contributions from advertising revenues and lower markdowns will offset inflationary pressures.
As more customers and members return to stores and clubs, the demand is likely to remain strong. WMT continues to benefit from solid omni-channel endeavors as well as last-mile delivery capabilities. Walmart is also gaining from its sturdy comp sales record, driven by its constant omnichannel efforts.
Micron shares have gained +25.5% over the past three months against the Zacks Semiconductors industry’s gain of +26.1%, however, things seem to be improving for it. The Zacks analyst believes that Micron has been witnessing steady growth in demand for memory chips from cloud-computing providers as well as an acceleration in 5G cellular network adoptions.
Better customer engagement and an improving cost structure are other major growth drivers. Adoption of 5G beyond mobile is likely to spur demand for memory and storage, particularly in Internet of Things devices. Micron’s near-term profitability, however, is likely to hurt by planned salary hikes. High level of customer inventory in the cloud, graphics and enterprise market remains another concern for Micron.
Shares of Enbridge have gained +11% in the last six months against the Zacks Oil Production and Pipeline industry’s gain of +9.5%. A significant portion of ENB’s earnings is generated from transportation operations, driven by a string of long-term contracts. The Zacks analyst believes that a huge contract base is likely to provide Enbridge stable cash flows in the coming years.
With significant portion of its assets being contracted by shippers for long term, ENB’s business model is less susceptible to oil price volatility. From 2022 through 2024, it expects to generate C$9 billion from midstream growth capital projects. A huge debt exposure, however, remains a concern.
Other noteworthy reports we are featuring today include UBS Group AG (UBS), Marvell Technology, Inc. (MRVL) and Weyerhaeuser Company (WY).
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>>>