Wednesday, May 8, 2024

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 Salesforce, Inc. (CRM), BP p.l.c. (BP) and The Southern Co. (SO). 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 Salesforce have outperformed the Zacks Computer - Software industry over the past year (+37.9% vs. +33.4%). The company is benefiting from a robust demand environment as customers are undergoing a major digital transformation. Its sustained focus on aligning products with customer needs is driving the top line.

Continued deal wins in the international market are another growth driver. The buyout of Slack has positioned the company as a leader in enterprise team collaboration and improved its competitive standing versus Microsoft Teams. Salesforce’s strategy of continuously expanding generative AI offerings will help it tap the growing opportunities in the space.

However, stiff competition and unfavorable currency fluctuations are concerns. Also, softening IT spending amid ongoing macroeconomic uncertainties could hurt its growth prospects.

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

BP’s shares have gained +6.4% over the past year against the Zacks Oil and Gas -- Integrated -- International industry’s gain of +11.2%. The company has a strong portfolio of upstream projects, supporting notable growth in production. The integrated energy company exhibits robust upstream growth with the start-up of major projects like Seagull, which boosts its production capacity.

Diversification into renewables through the Lightsource BP acquisition supports long-term sustainability amid energy transitions. The divestment strategy aims to reach $25 billion by 2025, enhancing the balance sheet and returning capital to shareholders.

However, a high debt-to-capitalization ratio raises financial flexibility and balance sheet concerns. Also, despite resolving significant litigation expenses from the 2010 oil spill, BP had to sell valuable assets. These divestitures could potentially limit future cash generation. Refining margins may face pressure due to narrower crude differentials.

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

Southern Company’s shares have outperformed the Zacks Utility - Electric Power industry over the past year (+7.2% vs. +1.7%). The company is leveraging the demographics of its operating territories, as in healthy population and job growth, it has gradually increased its customer base.

With good rate base growth, constructive regulation, and with the power supplier’s recent success in bringing the Vogtle nuclear project online, Southern is expected to generate steady earnings and dividend growth going forward.

However, the utility’s high leverage restricts financial flexibility, while an increased focus on nuclear energy could face opposition amidst growing environmental concerns. As it is, the utility sector remains sensitive to interest rate fluctuations and market sentiment. Therefore, Southern Company warrants a cautious stance from the investors.

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

Other noteworthy reports we are featuring today include PayPal Holdings, Inc. (PYPL), Arthur J. Gallagher & Co. (AJG) and Edwards Lifesciences Corp. (EW).

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>>>