Today's Must Read
Pre-Salt Reserves Aid Petrobras (PBR), Debt Burden Hurts
Product Rollouts & Growing Merchant Base Aid Shopify (SHOP)
Friday, June 9, 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 The Coca-Cola Company (KO), Petróleo Brasileiro S.A. - Petrobras (PBR) and Shopify Inc. (SHOP). 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 >>>
Shares of Coca-Cola have gained +1.3% over the past year against the Zacks Beverages - Soft drinks industry’s gain of +15.8%. The company returned to bottom line surprise trend after in line results in the prior quarter. Earnings and sales also improved year over year and surpassed our estimate in the quarter.
KO’s results benefited from the continued momentum in its business. Sales gained from revenue growth across its operating segments, aided by an improved price/mix and a rise in concentrate sales. It is poised to gain from innovations and accelerating digital investments.
It provided an upbeat guidance for 2023. However, Pressures from higher supply chain costs, higher marketing spends and currency headwinds are concerning.
(You can read the full research report on Coca-Cola here >>>)
Petroleo Brasileiro shares have outperformed the Zacks Oil and Gas - Integrated - Emerging Markets industry over the past year (+17.8% vs. +11.6%). This Brazil's state-run oil and natural gas giant Petrobras is riding high on the back of its impressive portfolio, particularly in the country’s pre-salt reservoirs.
It is the operator in most of these exploration areas and holds interests in them ranging from 20% to 100%. This puts Petrobras in an enviable position to maintain an impressive production growth profile for years to come. Meanwhile, the company’s ambitious divestment plans appear to be working well as far as deleveraging is concerned.
Having said all of this, the fact that Rio de Janeiro-based Petrobras is still reeling under huge debt burden cannot be overlooked. The firm is also having to deal with years of mismanagement and corruption, while investors remain wary of the risk of political interference. As such, Petrobras warrants a cautious stance at the moment.
(You can read the full research report on Petroleo Brasileiro here >>>)
Shares of Shopify have outperformed the Zacks Internet - Services industry over the past year (+76.7% vs. +10.5%). The company is benefiting from strong growth in the merchant base. It has been focused on winning merchants regularly, based on product offerings including Shop Pay and Shop Pay Installments.
Solid adoption of new merchant-friendly applications holds promise. Partnerships with YouTube, Twitter, Facebook, Instagram, and Google are expected to expand its merchant base. The divestiture of the logistics business to Flexport will boost profitability.
However, the absence of pandemic-triggered acceleration of e-commerce hurts top-line growth. Further, higher investments in product development, an unfavorable mix, are likely to limit margin expansion in the near term. Raging inflation and cautious consumer spending are expected to hurt top-line growth in the near term.
(You can read the full research report on Shopify here >>>)
Other noteworthy reports we are featuring today include Tesla, Inc. (TSLA), EOG Resources, Inc. (EOG) and Waste Management, Inc. (WM).
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>>>