Monday, August 7, 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 Amazon.com, Inc. (AMZN), Netflix, Inc. (NFLX) and American Express Co. (AXP). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

Shares of Amazon.com have outperformed the Zacks Internet - Commerce industry over the year-to-date basis (+66.2% vs. +43.5%). Strengthening AWS services portfolio and its growing adoption rate contributed well. Ultrafast delivery services and expanding content portfolio were beneficial. Strengthening relationship with third-party sellers was a positive.

Robust advertising business contributed well. Improving Alexa skills along with robust smart home products offerings were tailwinds. Amazon’s strong global presence and solid momentum among the small and medium businesses remain positives.

However, inflationary pressure, geopolitical tensions and foreign currency headwinds remain concerns. Rising transportation and fulfillment center costs are also concerns. Intensifying cloud competition poses a serious risk.

(You can read the full research report on Amazon.com here >>>)

Netflix shares have outperformed the Zacks Broadcast Radio and Television industry over the past year (+84.8% vs. +28.9%). The company is benefiting from growing subscriber base thanks to a robust portfolio. Crackdown on password-sharing and the introduction of paid sharing in more than 100 countries, which represents more than 80% of Netflix’s revenue base, is also expected to aid growth.

Netflix’s diversified content portfolio, which is attributable to heavy investments in the production and distribution of localized, foreign-language content, has been driving its growth prospects. It now expects revenue growth to accelerate in the second half of 2023.

However, stiff competition in the streaming space from the likes of Apple, Amazon Prime Video, HBO Max, Disney+, Peacock, Paramount+ and TikTok is a headwind. Netflix’s leveraged balance sheet and a higher streaming obligation are concerns.

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

Shares of American Express have outperformed the Zacks Financial - Miscellaneous Services industry over the past year (+6.7% vs. -3.6%). The company’s several growth initiatives, such as launching new products, reaching new agreements and forging alliances, are boosting its revenues. The Zacks analyst expects the top line at around $60.8 billion in 2023.

Consumer spending on T&E, which carry higher margins for AmEx, is advancing well. Its balance sheet looks strong with manageable debt. Solid cash-generation abilities enable the pursuit of business investments. However, with higher utilization of the firm’s cards, expense in the form of card member services and card member rewards is likely to go up and strain the margins.

Marketing and business development expense is expected to rise. A high debt burden induces a rise in interest expenses. As such, the stock warrants a cautious stance.

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

Other noteworthy reports we are featuring today include Enbridge Inc. (ENB), Palo Alto Networks, Inc. (PANW) and CSX Corp. (CSX).

Mark Vickery
Senior Editor

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>>>