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Research Daily

Tuesday, March 15, 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 Mastercard Inc. (MA), The Walt Disney Co. (DIS) and Costco Wholesale Corp. (COST). 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 Mastercard have outperformed the Zacks Financial Transaction Services industry over the past two-year period (+39.5% vs. -8.9%). The Zacks analyst believes that the company’s profit levels are rising thanks to increasing consumer spending. This enabled the company to report strong fourth-quarter results. Numerous acquisitions are helping it to grow addressable markets and drive new revenue streams.

The COVID-19 crisis accelerated the use of electronic payments with much greater adoption of digital and contactless solutions. The situation provides an opportunity for Mastercard's business to expedite its shift to the digital mode.

The company is well-poised to gain from steady cash-generating abilities. A strong capital position enables the company to pursue acquisitions and deploy capital. However, steep operating expenses might stress margins. High rebates and incentives may weigh on net revenues.

(You can read the full research report on Mastercard here >>>)

Shares of Walt Disney have underperformed the Zacks Media Conglomerates industry over the year-to-date period (-16.7% vs. -12.4%). The Zacks analyst believes that Disney+’s profitability was negatively impacted by higher programming and production, as well as marketing and technology costs in first-quarter fiscal 2022.

Higher sports programming costs have affected ESPN+’s profitability. Disney expects continued investments in content, which will drive up programming and production costs that is expected to hurt operating income by more than $200 million on a year-over-year basis. Disney’s leveraged balance sheet remains a concern.

However, Disney continues to benefit from the growing popularity of Disney+, owing to a strong content portfolio and a cheaper bundle offering. Availability in the Nordics, Latin America and other Asian territories will help in further expanding user base. Revival in Parks, Experiences and Products businesses also hold promise.

(You can read the full research report on Walt Disney here >>>)

Shares of Costco have outperformed the Zacks Retail - Discount Stores industry over the past six-month period (+13.6% vs. -1.1%). The Zacks analyst believes that the company’s growth strategies, better price management, decent membership trend and increasing penetration of e-commerce business reinforce its position.

The strategy to sell products at discounted prices has helped draw customers seeking both value and convenience. These factors have been aiding in registering impressive sales and earnings numbers.

Costco put up a decent performance in fiscal Q2 2022, wherein both the top and the bottom lines not only surpassed the Zacks Consensus Estimate but also improved year over year. Also, Costco has been witnessing stellar comps sales run. While aforementioned factors raise optimism, supply chain bottlenecks and higher labor and freight costs remain concerns. Any deleverage in SG&A rate may hurt margins.

(You can read the full research report on Costco here >>>)

Other noteworthy reports we are featuring today include S&P Global Inc. (SPGI), PayPal Holdings, Inc. (PYPL) and The Southern Company (SO).

Mark Vickery
Senior Editor


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>>>

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