Today's Must Read
Walmart (WMT) Benefits from Impressive E-Commerce Operations
Higher Rates Aid Bank of America (BAC) Amid Fee Income Woes
Monday, July 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 Amazon.com, Inc. (AMZN), Walmart Inc. (WMT), and Bank of America Corp. (BAC). 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 >>>
Amazon shares have declined -33.7% over the past year against the Zacks Internet - Commerce industry’s decline of -40.0%. The company’s growing expenses associated with supply-chain constraints and labor supply shortages remain concerns. Nevertheless, Amazon is gaining on solid Prime momentum owing to ultrafast delivery services and strong content portfolio.
Further, strengthening relationships with third-party sellers is a positive. Also, growing momentum across Amazon Music is contributing well. Notably, the stock has outperformed its industry on a year-to-date basis. Strong adoption rate of AWS is aiding the company’s cloud dominance. Also, expanding AWS services portfolio is continuously helping Amazon in gaining further momentum among the customers.
Further, robust Alexa skills and expanding smart home products portfolio are positives. Additionally, the company’s strong global presence and solid momentum among the small and medium businesses remain tailwinds.
Walmart shares have declined -6.0% over the past year against the Zacks Retail - Supermarkets industry’s decline of -4.0%. The company is battling supply-chain bottlenecks and persistently elevated inflation. The company’s U.S. segment operating income was hurt by high wage costs, an adverse mix due to the lower percentage of general merchandise and fuel costs and supply-chain woes in the first quarter. Some of these cost headwinds are likely to persist.
However, Walmart has been gaining from its sturdy comp sales record, which in turn is driven by its constant expansion efforts and solid e-commerce performance. The company’s initiatives to boost e-commerce business include prudent buyouts, alliances, and improved delivery and payment systems. On its first-quarter fiscal 2023 earnings call, management raised its net sales view, which is likely to grow about 4% at constant currency.
Bank of America shares have declined -9.8% over the past year against the Zacks Banks - Major Regional industry’s decline of -12.5%. The company’s second-quarter 2022 results were hurt by poor performance of the investment banking (IB) business, partly offset by growth in interest income. Its over-dependence on trading revenues is concerning. The volatile nature of the capital markets might hamper fee income growth.
A stretched valuation limits the stock’s upside potential. Its second-quarter 2022 results were hurt by poor performance of the investment banking (IB) business, partly offset by growth in interest income. The opening of new financial centers, enhancement in digital capabilities and cost-saving efforts will likely keep aiding the company’s financials.
Supported by robust loan growth, its top line is expected to improve. Given the rise in rates, Bank of America is expected to witness growth in margins in the near term.
Other noteworthy reports we are featuring today include United Parcel Service, Inc. (UPS), American Express Company (AXP), and SAP SE (SAP).
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>>>