Wednesday, November 8, 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 Microsoft Corporation (MSFT), NIKE, Inc. (NKE) 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 >>>

Microsoft shares have outperformed the Zacks Computer - Software industry over the year-to-date period (+51.4% vs. +47.7%), reflecting the company's AI momentum that were further confirmed by the recent strong quarterly results. The company’s quarterly results on October 24th gained from strong Intelligent Cloud and Productivity and Business Processes revenues. Intelligent Cloud revenues were driven by growth in Azure and other cloud services.

Productivity and Business Processes revenues rose due to a strong adoption of Office 365 Commercial solutions. Continued momentum in the small and medium businesses, frontline worker offerings and a gain in revenue per user drove the top line. Steady growth in Dynamics products and cloud services aided LinkedIn revenues.

However, continued customer shift to cloud offerings is hurting growth in Office's commercial licensing revenues. Higher operating expenses driven by marketing, LinkedIn and cloud engineering amid intense competition in the cloud space remain a concern.

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

Shares of NIKE have outperformed the Zacks Shoes and Retail Apparel industry over the past year (+20.2% vs. +14.2%). Company’s continued progress on Consumer Direct Acceleration strategy, compelling product innovation and digital leadership have been drivers. This aided retail sales across Nike Direct and wholesale businesses in first-quarter fiscal 2024.

The digital business has been gaining from robust consumer trends, including momentum in the NIKE mobile app led by improved traffic and increased member buying frequency. The company posted top and bottom-line growth in first-quarter fiscal 2024.

Backed by solid consumer momentum, a robust innovation pipeline and strong inventory, management provided solid outlook for fiscal 2024. However, NIKE has been witnessing gross margin pressures owing to the rising inflation. Elevated demand creation expenses lead to higher SG&A expense.

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

BP shares have outperformed the Zacks Oil and Gas - Integrated - International industry over the year-to-date period (+4.8% vs. -2.5%). The company has a strong portfolio of upstream projects, backing impressive production growth. The integrated energy company has set an aggressive energy transition plan to capitalize on the mounting clean energy demand.

In a decade, BP has set an ambitious goal of developing 50 gigawatts (GW) of net renewable energy generating capacity, representing a massive improvement from the 2.5 GW capacity the company has developed so far. By 2030, it plans to reduce emissions from operations by 30-35%. BP has consistently given higher dividend yields in the past few years, compared to the composite stocks belonging to the industry.

However, BP’s balance sheet is more levered than most peers, limiting its financial flexibility and suggesting balance sheet weakness. Thus, BP is vulnerable to economic downturn. 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 Boston Scientific Corporation (BSX), Hilton Worldwide Holdings Inc. (HLT) and W.W. Grainger, Inc. (GWW).

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>>>