Thursday, October 12, 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 Meta Platforms, Inc. (META), Eli Lilly and Company (LLY) and Caterpillar Inc. (CAT). 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 Meta Platforms have outperformed the Zacks Internet - Software industry over the year-to-date period (+172.4% vs. +53.5%) on the back of steady user growth across all regions, particularly Asia Pacific.  Increased engagement for its offerings like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver.

The combination of steady user growth and improving outlook for the digital ad space is showing up in rising earnings estimates for teh company.

Meta Platforms is leveraging AI to recommend Reels content, which is driving traffic on Instagram and Facebook. Its innovative portfolio, which includes Threads, Reels and Llama 2, is likely to aid prospects.

However, challenging macroeconomic conditions remain a headwind for Meta’s advertising revenues, along with targeting and measurement headwinds due to Apple’s iOS changes. Slow monetization of Reels, along with mounting operating losses at Reality Labs, are concerns.

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

Eli Lilly shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+84.2% vs. +28.7%). The company’s revenue growth is being driven by higher demand for drugs like Verzenio, Trulicity, Taltz and others. Sales of its new drug, Mounjaro, are already benefiting from strong demand trends.

Mounjaro is expected to be a key long-term top-line driver for Lilly as it has the potential to be approved for obesity and other diabetes-related diseases. Mounjaro showed superior weight-loss reduction in clinical studies for obesity.  Lilly expects regulatory decisions for some key pipeline candidates this year.

However, generic competition for some drugs, rising pricing pressure and challenges in meeting strong demand for incretin products are some top-line headwinds. Estimates have declined slightly ahead of Q3 results. Lilly has a mixed record of earnings surprises in the recent quarters

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

Shares of Caterpillar have outperformed the Zacks Manufacturing - Construction and Mining industry over the past six months (+24.4% vs. +23.8%). The company’s revenues and earnings have grown year over year for 10 straight quarters thanks to its cost-saving actions, strong end-market demand and pricing actions, which offset the impact of the supply-chain snarls and cost pressures.

The Construction Industries segment is expected to benefit from the rising construction activities in the United States and other parts of the world. Backed by demand for commodities fueled by the energy-transition trend, a thriving mining sector will aid the Resource Industries segment.

Caterpillar’s dividend yield and payout ratio are higher than its peers. A strong liquidity position, investments in expanding services and digital initiatives will help Caterpillar deliver outsized returns.

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

Other noteworthy reports we are featuring today include Amgen Inc. (AMGN), Citigroup Inc. (C) and Micron Technology, Inc. (MU).

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>>>