Today's Must Read
Cost Saving Efforts Aid Bank of America (BAC), Low Rates Ail
Strategic Acquisitions Aid Schwab (SCHW) Amid Cost Concerns
Tuesday, June 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 Alphabet Inc. (GOOGL), Bank of America Corporation (BAC), 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 >>>
Alphabet shares have held up a lot better than the peer group in the ongiong market pullbsack, with stock losing -9.5% of its value over the past year against Zacks Internet - Services industry’s decline of -26.1%. While rising expenses and issues related to regulatory uncertainty are worrisome, Alphabet's strong cloud division is aiding substantial revenue growth. 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 gaining solid momentum.
Also, a strong focus on innovation of AI techniques and the home automation space should aid business growth in the long term. Further, its deepening focus on the wearables category remains a tailwind. Furthermore, the company’s growing efforts to gain a foothold in the healthcare industry are other positives. Also, Alphabet’s expanding presence in the autonomous driving space is contributing well.
Bank of America shares have declined -18% over the past year, better than JPMorgan's -23.3% decline but worse than the S&P 500 index's -14.1% pullback. Weighing on the BAC shares and the broader group is lingering recession fears as reflected in the flattening yield curve that is offsetting the margin benefits of the Fed's tightening cycle.
However, opening of new financial centers, enhancement in digital capabilities and cost-saving efforts will likely keep aiding financials. Supported by robust loan growth and the investment banking (IB) pipeline, the company’s top line is expected to keep improving in the quarters ahead. The company will keep enhancing shareholder value through impressive capital deployments.
The Charles Schwab shares have declined -11.7% over the past year against Zacks Financial - Investment Bank industry’s decline of -22.1%. The company’s elevated operating expenses might hamper its bottom-line growth to some extent. However, strategic acquisitions, likely to be earnings accretive, have reinforced Schwab's position as a leading brokerage player.
The company's offering of 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.
Other noteworthy reports we are featuring today include GSK plc (GSK), Caterpillar Inc. (CAT) and Starbucks Corporation (SBUX).
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>>>