Today's Must Read
Abbott Thrives on COVID-19 Testing Amid Forex Woes
Buyouts, Trading Focus Aid Schwab (SCHW), Higher Costs A Woe
Friday, March 25, 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 Alphabet Inc. (GOOGL), Abbott Laboratories (ABT) and The Charles Schwab Corporation (SCHW). 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 Alphabet have outperformed the Zacks Internet - Services industry over the past year (+39.8% vs. +17.8%) on the back of solid momentum across search, advertising, cloud and YouTube businesses. Further, the growing proliferation of consumer online activities and rising advertiser spending remained tailwinds.
Alphabet's robust cloud division continues to be the key catalyst. Moreover, expanding data centers will continue to bolster its presence in the cloud space. Further, major updates in its search segment are enhancing the search results. Moreover, Google’s mobile search is constantly gaining solid traction. Also, strong focus on AI techniques and the home automation space should aid business growth in the long term. Yet, its growing litigation issues remain concerns.
Abbott shares have declined -2% over the past year against the Zacks Medical - Products industry’s decline of -7.3%. However, Abbott did post better-than-expected earnings and revenue numbers for the fourth quarter of 2021. Barring Neuromodulation (a 7.5% year-over-year decline), the company registered organic sales growth across all its operating segments.
The Zacks analyst believes that COVID-19 testing-related sales were driven by demand for BinaxNOW, Panbio and ID NOW rapid testing platforms. Within the Diabetes Care business, the company has been in the limelight for developments in its flagship, sensor-based continuous glucose monitoring system, FreeStyle Libre. Within Adult Nutrition, the company gained from the strong performance of Ensure and Glucerna brands.
However, the company’s projection indicates a fall in COVID testing revenues through the later part of 2022. Year-over-year drop in Neuromodulation sales was concerning.
Shares of Charles Schwab have outperformed the Zacks Financial - Investment Bank industry over the past year (+39.3% vs. +7.6%). The Zacks analyst believes that strategic acquisitions have reinforced Schwab's position as a leading brokerage player. The same will likely be accretive to earnings. Offering commission-free trading has led to a rise in client assets and brokerage accounts, thereby improving trading revenues.
Schwab's efficient capital deployments reflect a solid balance sheet position, through which it will enhance shareholder value. However, despite expectations of a few rate hikes, relatively lower interest rates will likely keep hurting margins in the near term. Elevated operating expenses might hamper the company's bottom-line growth to an extent.
(You can read the full research report on Charles Schwab here >>>)
Other noteworthy reports we are featuring today include Philip Morris International Inc. (PM), Canadian National Railway Company (CNI) and Air Products and Chemicals, Inc. (APD).
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>>>