Today's Must Read
Deere (DE) Rides on Farm Equipment Demand Amid Higher Costs
PayPal (PYPL) Benefits From Increasing Total Payment Volume
Friday, April 29, 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 T-Mobile US, Inc. (TMUS), Deere & Company (DE), 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 T-Mobile have outperformed the Zacks Wireless National industry over the year to date basis (+12.6% vs. +2.5%). The company is on track to complete the Sprint customer network migration mid-year and decommissioning by the year-end. Its Extended Range 5G covers 315 million people or 95% of Americans. The Ultra Capacity 5G covers 225 million people and nearly 85% of T-Mobile’s customers. About 45% of postpaid customers are using a 5G phone, and 5G devices account for more than half of the total network traffic.
However, it operates in a fiercely competitive and almost saturated U.S. telecom market. Low-priced plans for consumers and small enterprises have not improved the bottom line. Promotional activities to lure customers from rivals hurt its profitability.
Shares of Deere have outperformed the Zacks Manufacturing - Farm Equipment industry over the past year (+5.6% vs. +2.8%). The Zacks analyst believes the ongoing rally in commodity prices will continue to fuel agricultural equipment demand, encouraging farmers to boost spending on new farm equipment. Replacement demand to upgrade old equipment will support Deere's top-line results. Demand for farm and construction equipment will continue to be supported by positive fundamentals, including favorable crop prices, economic growth and increased infrastructure spending in fiscal 2022.
Deere is likely to benefit from growth in non-residential investment and strong order activity from independent rental companies. Focus on investing in new products equipped with the latest technology will make farming automated, which will drive Deere's growth. However, higher material and labor costs are likely to dent margin.
(You can read the full research report on Deere here >>>)
PayPal shares have declined -64.8% over the past year against the Zacks Internet - Software industry’s decline of -51.4%, primarily reflecting sentiment shift in the current rising rate environment. The company’s intensifying competition in the digital payment market poses a serious risk to the company’s market position. Also, foreign exchange headwinds remain concerns. The stock has underperformed its industry on a year-to-date basis.
However, first quarter results were driven by strong growth in total payments volume owing to increasing net new active accounts. Strengthening customer engagement was a positive. Also, strong performance by Venmo and merchant services contributed well to the TPV growth. Additionally, boom in digital payment owing to the coronavirus pandemic, remains a tailwind.
The Zacks analyst believes that growing transaction revenues are likely to continue driving the top-line growth. Also, solid momentum across peer to peer and PayPal Checkout experiences is a tailwind. PayPal’s growing traction in the United States is a positive.
Other noteworthy reports we are featuring today include Raytheon Technologies Corporation (RTX), The PNC Financial Services Group, Inc. (PNC), and Edwards Lifesciences Corporation (EW).
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>>>