Today's Must Read
Strong Cross-Border Volumes Aid Mastercard (MA), High Costs Hurt
Growing Customer Base & Partnerships Aid ServiceNow (NOW)
Monday, December 4, 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 Berkshire Hathaway Inc. (BRK.B), Mastercard Incorporated (MA) and ServiceNow, Inc. (NOW). 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 >>>
Berkshire Hathaway shares have outperformed the Zacks Insurance - Property and Casualty industry over the year-to-date period (+15.6% vs. +12.1%). The company is one of the largest property and casualty insurance companies with numerous diverse business activities. A strong cash position supports earnings-accretive bolt-on buyouts and is indicative of its financial flexibility.
Continued insurance business growth fuels increase in float, drive earnings and generates maximum return on equity. The non-insurance businesses have also been doing well in the last few years. The addition of Pilot Travel Centers (PTC) has strengthened its energy business. A sturdy capital level provides further impetus.
However, exposure to catastrophe loss induces earnings volatility and also affects the property and casualty underwriting results of Berkshire. Huge capital expenditure remains a headwind for the company.
(You can read the full research report on Berkshire Hathaway here >>>)
Shares of Mastercard have outperformed the Zacks Financial Transaction Services industry over the past year (+17.1% vs. +15.9%). The company has made numerous acquisitions are helping it to grow in addressable markets and drive new revenue streams.
The COVID-19 crisis accelerated the adoption of digital and contactless solutions, providing an opportunity for MA's business to expedite its shift to the digital mode. It is well-poised to gain from steady cash-generating abilities. A strong capital position allows it to pursue acquisitions and prudently deploy capital via share buybacks and dividend payments.
However, steep operating expenses might stress margins. High rebates and incentives may weigh on net revenues. Its dividend yield is still lower than the industry average. As such, the stock warrants a cautious stance.
(You can read the full research report on Mastercard here >>>)
Shares of ServiceNow have outperformed the Zacks Computers - IT Services industry over the year-to-date period (+77.9% vs. +33.6%). The company has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation.
ServiceNow had 1789 total customers with more than $1 million in annual contract value at the end of the third quarter. ServiceNow has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation. Security and risk had a terrific quarter with ten deals of more than $1 million. Employee workflows had a stellar quarter, with seven deals over $1 million and one deal over $10 million.
It is benefiting from strong demand for its generative AI-powered solutions with the launch of Vancouver. Nevertheless, ServiceNow is suffering from high inflation, stiff competition, and challenging macro-economic environment.
(You can read the full research report on ServiceNow here >>>)
Other noteworthy reports we are featuring today include Union Pacific Corporation (UNP), Applied Materials, Inc. (AMAT) and Stryker Corporation (SYK).
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>>>