Today's Must Read
Higher Rates, Buyouts Aid JPMorgan (JPM), Fee Income a Woe
Coca-Cola's (KO) Digital Investments to Aid the Top Line
Friday, September 16, 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), JPMorgan Chase & Co. (JPM) and The Coca-Cola Company (KO). 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 gained +38.4% over the past two years against the Zacks Internet - Services industry’s gain of +24.7%. The company’s expanding data centers will continue to bolster its presence in the cloud space. For 2022, we expect Google Cloud revenue to grow 8.4% from 2021. Further, major updates in its search segment are enhancing the search results.
Moreover, Google’s mobile search is gaining solid momentum. For 2022, we anticipate Google Search revenue to be up 11% from the last year. Also, strong focus on innovation of AI techniques and the home automation space should continue aiding Alphabet’s business growth in the days ahead.
Its deepening focus on the wearables category remains a tailwind. Also, Alphabet’s expanding presence in the autonomous driving space is contributing well. Considering the aforesaid factors, we expect 2022 total revenue to grow 10.3% from 2021.
JPMorgan Chase shares have declined -23.7% over the past year against the Zacks Banks - Major Regional industry’s decline of -14.0%. The volatile nature of the capital markets business and higher mortgage rates are likely to make fee income growth challenging. Our estimates for non-interest income (managed) indicate a decline almost 15%.
Moreover, steadily rising operating expenses remains a key near-term headwind. Notably, given the possibility of an economic downturn and to meet higher capital requirements, the bank has suspended buybacks.
Nevertheless, higher interest rates and growth in loan demand are expected to result in a robust improvement in net interest income (NII). The Zacks estimate for NII (managed) suggest a CAGR of around 19% over the next three years Opening new branches, strategic buyouts/investments and global expansion and digitization initiatives are likely to keep driving the company’s financials.
Coca-Cola shares have outperformed the Zacks Beverages - Soft drinks industry over the past year (+13.0% vs. +6.1%). The company’s top and bottom lines surpassed estimates for the sixth straight quarter. The company’s results reflect elasticity in the marketplace despite the ongoing global challenges. Sales gained from revenue growth across its operating segments, aided by an improved price/mix and an increase in concentrate sales.
Coca-Cola benefited from underlying share gains in both at-home and away-from-home channels. It raised the organic revenues and comparable earnings per share growth guidance for 2022. It is poised to gain from innovations and accelerating digital investments.
However, pressures from higher supply chain costs, including transportation and input costs remain. Higher marketing spends and currency headwinds are also concerning.
Other noteworthy reports we are featuring today include Abbott Laboratories (ABT), Salesforce, Inc. (CRM), and Linde plc (LIN).
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>>>