Today's Must Read
ExxonMobil (XOM) Banks on Permian and Guyana Assets
Walmart (WMT) Gains on E-Commerce Efforts, Hurt by Cost Woes
Thursday, September 29, 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 Berkshire Hathaway Inc. (BRK.B), Exxon Mobil Corp. (XOM) and Walmart Inc. (WMT). 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 >>>
Berkshire Hathaway shares have underperformed the Zacks Insurance - Property and Casualty industry over the past year (-0.5% vs. +0.4%). The company’s exposure to catastrophe loss induces earnings volatility and also affects the property and casualty underwriting results of Berkshire. Huge capital expenditures remain a headwind for the company.
However, Berkshire Hathaway is one of the largest property and casualty insurance companies measured by premium volume. Berkshire's inorganic growth story remains impressive with strategic acquisitions. A strong cash position supports earnings-accretive bolt-on buyouts and indicates the company's financial flexibility.
Continued insurance business growth fuels increase in float, drive earnings and generates maximum return on equity. The non-insurance businesses are delivering improved results with increased revenues over the past few years. A sturdy capital level provides further impetus.
(You can read the full research report on Berkshire Hathaway here >>>)
Exxon Mobil shares have outperformed the Zacks Oil and Gas - Integrated – International industry over the past year (+51.1% vs. +27.2%). The company’s bellwether status and an optimal integrated capital structure that has historically produced industry-leading returns make it a relatively lower-risk energy sector play. The company made three oil discoveries in the Stabroek Block, which will increase its recoverable resources estimates to 11 billion oil-equivalent barrels.
ExxonMobil also has a strong presence in the prolific Permian Basin, where it expects to boost production volumes by 25% in 2022. The company reported strong second-quarter earnings, owing to higher realized commodity prices and solid refinery utilization.
ExxonMobil generated cash flow of $20.9 billion from operations and asset divestments in the second quarter. Also, it has significantly lower debt exposure than other integrated majors. Hence, ExxonMobil is considered a preferred energy firm to own now.
(You can read the full research report on Exxom Mobil here >>>)
Walmart shares have underperformed the Zacks Retail - Supermarkets industry over the past year (-4.5% vs. -3.0%). The company’s consolidated operating income and earnings per share view suggest a decline from the year-ago period figures. The company is encountering cost pressure associated with fuel prices, supply chain and excess inventory. Cost inflation and markdowns hurt its gross margin in the second quarter.
However, Walmart has been benefiting from its robust omnichannel operations due to its efforts to enhance both store and online experience. Walmart has been particularly gaining from its efforts to boost delivery services through acquisitions and partnerships.
The company’s U.S. comp sales continued to benefit from an increased market share in grocery in the second quarter of fiscal 2023, wherein the top line grew year over year. Management raised its net sales view for fiscal 2023.
(You can read the full research report on Walmart here >>>)
Other noteworthy reports we are featuring today include Alibaba Group Holding Ltd. (BABA), Accenture plc (ACN), and American Express Co. (AXP).
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>>>