Today's Must Read
Marsh & McLennan (MMC) Strategic Buyouts Aid, Expenses High
Pioneer Natural (PXD) Banks On Oil-Rich Permian Basin Assets
Thursday, July 28, 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), Marsh & McLennan Companies, Inc. (MMC), and Pioneer Natural Resources Company (PXD). 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 declined -16.7% over the past year against the Zacks Internet - Services industry’s decline of -32.0%. The company’s growing litigation issues and increasing expenses are concerns. However, 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, 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.
Marsh & McLennan shares have outperformed the Zacks Insurance - Brokerage industry over the past year (+9.2% vs. -1.9%). The company is well-poised to grow on the back of significant investments and acquisitions made within its operating units, the launch of new products, digital capabilities and branching out into new businesses. Its increased stake in Marsh India will further buoy growth.
Its revenues have been increasing thanks to a wide geographic presence and strong client retention. The Risk and Insurance Services unit has been contributing to its revenue growth. It reported strong second-quarter results on improved performance of both the segments. Enhanced operations in Latin America, Asia Pacific and EMEA were major positives.
It has plans to deploy roughly $4 billion capital in 2022. However, its escalating operating expenses might weigh on the margins. High debt levels remain a concern. Its valuation remains stretched at the current level.
Pioneer Natural Resources shares have gained +66.1% over the past year against the Zacks Oil and Gas - Exploration and Production - United States industry’s gain of +69.4. This company’s divestment of its Delaware Basin assets has established itself as the only large-cap exploration and production pure play in the Midland Basin.
For 2022, the company projects total production at 623-648 MBoe/d, marking an increase from 617.3 MBoe/d reported last year. Coupled with higher oil prices, increased production will boost its bottom line. For the second quarter, the company announced a dividend payment of $7.38 per share of common stock, suggesting a 95.2% hike. Also, its debt to capitalization has been persistently lower than the industry over the past few years.
However, PXD has been bearing the brunt of increasing costs for the past few quarters. Also, the upstream energy player realized hedging losses of $135 million in the first quarter amid rising oil prices. As such, the stock warrants a cautious stance.
Other noteworthy reports we are featuring today include Texas Instruments Incorporated (TXN), Air Products and Chemicals, Inc. (APD), and Palo Alto Networks, Inc. (PANW).
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>>>