Today's Must Read
Buyouts, Active Equity Focus Aid BlackRock (BLK), Costs Ail
BP plc (BP) Banks on Upstream Production, Hurt by High Debts
Monday, November 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 McDonald's Corp. (MCD), BlackRock, Inc. (BLK) and BP p.l.c. (BP). 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 >>>
McDonald's shares have outperformed the Zacks Retail - Restaurants industry over the past year (+9.8% vs. -3.3%). The company’s increased focus on menu innovation and loyalty program expansion is commendable. It is also undertaking every effort to drive growth in international markets.
Robust digitalization will help the company in driving long-term growth and capturing market share. It is planning to open more than 1,800 restaurants globally in 2022, which includes 500 openings in the United States and IOM segment and 1,300 (including nearly 800 in China) inaugurations in the IDL market.
However, restaurant closures in Russia and Ukraine, coupled with inflationary pressures on labor and commodities, remain headwinds. The company stated that recovery in China remains challenging due to ongoing COVID resurgences and related lockdowns.
(You can read the full research report on McDonald’s here >>>)
Shares of BlackRock have underperformed the Zacks Financial - Investment Management industry over the past year (-20.5% vs. -18.6%). The company is facing elevated expenses (mainly owing to higher administration costs) which are expected to hurt the company’s bottom line. Also, the company’s high dependence on overseas revenues is worrisome. The rise in equity market volatility and a fall in asset prices make us apprehensive.
However, BlackRock has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters. Its third-quarter 2022 results were aided by lower costs.
BlackRock continues to restructure the equity business, which, along with strategic acquisitions, will keep supporting revenue growth, and help expand market share and footprints globally. Robust assets under management (AUM) balance will likely further support the top line.
(You can read the full research report on BlackRock here >>>)
BP’s shares have gained +34.7% over the past year against the Zacks Oil and Gas - Integrated - International industry’s gain of +54.4%. The company has a strong portfolio of upstream projects, backing impressive production growth. The company boasted that the target of adding a net production of 900 thousand barrels of oil equivalent per day by 2021 from key projects has been met successfully.
BP has set an aggressive energy transition plan to capitalize on the mounting demand for clean energy. Currently, high oil prices are aiding the company’s upstream operations. Notably, BP announced plans to execute a $3.5-billion share buyback, which is expected to be completed before reporting the third-quarter results.
However, the company’s balance sheet is considerably more levered than most peers, thereby limiting its financial flexibility. Also, increasing costs and expenses has been adversely affecting the energy giant’s income. As such, the stock warrants a cautious stance.
(You can read the full research report on BP here >>>)
Other noteworthy reports we are featuring today include SAP SE (SAP), Petróleo Brasileiro S.A. - Petrobras (PBR), and Fiserv, Inc. (FISV).
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>>>