Friday, February 3, 2023

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 Walmart Inc. (WMT), Alibaba Group Holding Limited (BABA) and Salesforce, Inc. (CRM). 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 >>>

Walmart shares have more than proved their defensive attributes in the market turmoil that got underway a year ago. The stock is essentially flat over the past year (up +0.2%), which compares to the -7.3% decline for the Zacks Retail sector and -8% decline for the S&P 500 index.

The company 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 third quarter of fiscal 2023, wherein the top and bottom lines surpassed the Zacks Consensus Estimate and increased year over year in the last quarterly release. A robust third-quarter show encouraged management to raise its overall guidance for fiscal 2023.

However, its consolidated operating income and earnings per share view still suggest a decline from the year-ago period figures. The company is encountering cost inflation, and expects it to remain elevated.

(You can read the full research report on Walmart here >>>)

Shares of Alibaba have over the last couple of months, reflecting the company's leverage to expectations of a consumer spending rebound in the wake of China ending its zero-Covid policies and associated restrictions. The stock is still down over the past year, but it is up an impressive +52% over the last three months compared to the +17.5% gain for the Zacks Retail sector and +11.2% gain for the S&P 500 index.

Alibaba’s solid momentum across China and International wholesale businesses is benefiting its China and International commerce businesses, respectively.

The Zacks analyst expects that China commerce and international commerce to be up 11.2% and 7.2% in fiscal 2023 year over year, respectively. Further, strength across the local consumer services, Cainiao logistics services, Alibaba Health and Freshippo is contributing well to the top-line growth.

Additionally, solid momentum across financial services, public services and telecommunication industries are driving the cloud computing business. Our estimates suggest cloud revenues to witness a 6.3% rise in fiscal 2023 from the year-ago reported figure.

(You can read the full research report on Alibaba here >>>)

Shares of Salesforce have underperformed the Zacks Computer - Software industry over the past year (-20.3% vs. -12.4%). The company is witnessing stiff competition is a concern. Besides, unfavorable currency fluctuations along with increasing investments in international expansions and data centers are an overhang on near-term profitability.

However, Salesforce is benefiting from a robust demand environment as customers are undergoing a major digital transformation. The rapid adoption of its cloud-based solutions is driving demand for its products. Its sustained focus on introducing more aligned products as per customer needs is driving its top-line.

Continued deal wins in the international market is another growth driver. The acquisition of Slack would position the company to be a leader in enterprise team collaboration solution space and better compete with Microsoft’s Teams product. We expect CRM revenues to grow at a CAGR of 12.5% through fiscal 2023-2025.

(You can read the full research report on Salesforce here >>>)

Other noteworthy reports we are featuring today include HCA Healthcare, Inc. (HCA), Enterprise Products Partners L.P. (EPD) and MetLife, Inc. (MET).

Director of Research

Sheraz Mian

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>>>