Today's Must Read
Phillip Morris (PM) Gains From Smoke-Free Product Category
Buyouts, AUM Balance Aid BlackRock (BLK), Higher Costs A Woe
Wednesday, August 17, 2022
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including The Home Depot, Inc. (HD), Philip Morris International Inc. (PM) and BlackRock, Inc. (BLK). 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 >>>
The Home Depot shares have gained +1.5% over the past year, lagging Lowes' +8.1% gain, but outperforming the broader market's -3.2% decline. The company reported ninth straight quarter of earnings and sales beat in the fiscal second quarter on Tuesday. Results benefited from strong demand for home-improvement projects, robust housing market trends and ongoing investments.
The Home Depot also benefited from continued strength in both Pro and DIY categories as well as digital momentum. Its interconnected retail strategy and underlying technology infrastructure have helped consistently boost web traffic for the past few quarters, aiding digital sales.
However, the company reported soft gross margin in the fiscal second quarter driven by higher supply chain investments. Higher inventory levels and interest expense also remain concerning.
Philip Morris shares have gained +6.2% over the past year, roughly in-line with the Zacks Tobacco industry’s gain of +6.8%. The company has been benefiting from its pricing power, which aided its second-quarter 2022 results. The top and the bottom line increased year on year and beat the Zacks Consensus Estimate.
Its strength in IQOS and the combustible business drove performance despite headwinds. Proforma pricing for combustible products rose 3.5% and nearly 5%, excluding Indonesia. Strength in the reduced-risk products category has been benefiting the company for a while.
However, Philip Morris has been facing supply-chain and regulatory hurdles in its Russian business. The company has undertaken steps to scale down its operations in the region due to the Ukraine war. Also, management expects continued uncertainty concerning the recovery pace from the pandemic-led operating landscape.
BlackRock shares have declined -15.7% over the past year against the Zacks Financial - Investment Management industry’s decline of -10.3%. The rise in equity market volatility and a fall in asset prices in an environment of macroeconomic uncertainty is typically an unfavorable backdrop for BlackRock and other asset managers.
However, BlackRock have has an impressive earnings surprise history. The company's earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters. BlackRock continues to restructure the equity business, which along with strategic acquisitions, will likely keep supporting revenue growth, and help in expanding market share and footprints globally. A robust assets under management (AUM) balance will likely further support the top line.
Other noteworthy reports we are featuring today include PayPal Holdings, Inc. (PYPL), Deere & Company (DE), 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>>>