Friday, December 15, 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 JPMorgan Chase & Co. (JPM), Abbott Laboratories (ABT) and Qualcomm Inc. (QCOM). 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 JPMorgan have outperformed the Zacks Banks - Major Regional industry over the past year (+29.8% vs. +17.7%). High interest rates, buyouts, global expansion efforts and decent loan demand will aid net interest income (NII), though rising funding costs will weigh on it.

According to the Zacks analyst estimates for NII (managed) and loans imply a CAGR of 9.8% and 7.2%, respectively, by 2025. Aided by solid earnings strength and balance sheet, it will be able to sustain capital distributions. Despite visibility of some greenshoots in the investment banking (IB) business, IB fees are less likely to improve soon.

This, along with the volatile nature of the capital markets business and high mortgage rates, will likely hamper fee income growth. Owing to these challenges, we expect total non-interest income (managed) to witness a CAGR of just 3.6% by 2025. Mounting costs are a woe and we expect it to rise 11% in 2023.

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

Abbott shares have outperformed the Zacks Medical - Products industry over the past year (+2.1% vs. -0.1%). The company is strategically expanding its global presence to address the unmet demand for advanced medical technologies. Within the EPD business, which is solely based in emerging markets, the Zacks analyst expects Abbott to register a sales CAGR of nearly 6% through fiscal 2025.

Within Core Diagnostics, Abbott is gaining market share following the end of the public health emergency, particularly in the United States and Europe region. Within Diabetes Care, Abbott is scaling up the production of Libre and gaining reimbursement approval in several countries. Innovations and market expansion efforts are helping it offset the impact of inflation and supply disruptions.

However, a steep year-over-year decline in COVID testing-related sales hurt growth. Further, the decision to exit the pediatric nutrition business in China continue to impede overall growth in Nutrition.

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

Shares of Qualcomm have outperformed the Zacks Wireless Equipment industry over the past year (+24.6% vs. +9.2%). The company is well poised to benefit from solid 5G traction, greater visibility and a diversified revenue stream. Strength in the snapdragon portfolio is an additional tailwind as exemplified by the multi-year.

Apple deal for 5G modems for iPhones. It is focusing on a seamless transition from a wireless communications firm for the mobile industry to a connected processor firm for the intelligent edge. Qualcomm is also witnessing solid momentum in IoT.

However, it reported relatively soft fourth-quarter fiscal 2023 results owing to a challenging macroeconomic environment, inflationary pressures and soft recovery in China, resulting in lower-than-expected demand and elevated inventory levels.

Weakness in the smartphone industry and cautious client approach are weighing on margins. Rising geopolitical conflicts and high debt burden remain headwinds.

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

Other noteworthy reports we are featuring today include Johnson & Johnson (JNJ), Fomento Económico Mexicano, S.A.B. de C.V. (FMX) and BHP Group Ltd. (BHP).

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>>>