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Research Daily

Wednesday, May 29, 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 The Coca-Cola Company (KO), Alibaba Group Holding Limited (BABA) and KLA Corporation (KLAC), as well as two micro-cap stocks Mobile Infrastructure Corporation (BEEP) and Espey Mfg. & Electronics Corp. (ESP). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.

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 >>>

Coca-Cola shares have outperformed the Zacks Beverages - Soft drinks industry over the year-to-date period (+5.0% vs. +3.4%). The company continues to witness positive business trends as reflected by its robust surprise history. KO’s sales and earnings beat estimates for the fifth consecutive quarter in first-quarter 2024.

Earnings and sales also improved year over year. Strong revenue growth across most of its operating segments aided by improved price/mix and unit volume growth boosted the results. It is poised to gain from innovations and accelerating digital investments. It provided an upbeat guidance for 2024.

However, KO witnesses inflationary cost pressures, related to higher commodity and material costs, as well as higher marketing investments.

(You can read the full research report on Coca-Cola here >>>)

Shares of Alibaba have gained +2.1% over the year-to-date period against the Zacks Internet - Commerce industry’s gain of +14.7%. The company is benefiting from strong momentum across its international business. Solid combined order growth in AIDC’s retail businesses and strength in AliExpress’ Choice are contributing well.

Growing international commerce wholesale business, thanks to strength in cross-border-related value-added services, is a tailwind. Expanding China's wholesale commerce business remains a major positive. Robust local consumer services and Cainiao logistics services are further driving top-line growth. Strength in Lazada, AliExpress and Trendyol is expected to continue benefiting Alibaba’s international business.

However, rising expenses related to new initiatives are a concern. Macroeconomic uncertainties and unfavorable foreign exchange fluctuations remain risks.

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

KLA’s shares have outperformed the Zacks Electronics - Miscellaneous Products industry over the year-to-date period (+34.1% vs. +17.9%). The company is benefiting from strong performance of the wafer inspection business owing to rising demand for advanced wafer inspection applications in leading-edge technology development.

Growing adoption of KLA’s 8900 series platform for high throughput macro inspection, increased demand in the legacy node and advanced packaging categories made the platform one of the best performing product lines in its optical inspection portfolio in 2023.

Growing investments across multiple nodes, and rising capital intensity in Foundry & Logic are driving the top-line growth. KLA's emphasis on integration of AI into its solutions has driven its outperformance in the semiconductor market.

However, weakness in the PCB, Display and Component Inspection remains a headwind. Softness in memory and leading-edge, logic and foundry investments has been a concern.

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

Shares of Mobile Infrastructure have underperformed the Zacks Real Estate - Operations industry over the year-to-date period (-15.6% vs. -1.2%). This microcap company with market capitalization of $105.06 million is facing high debt levels, thus interest rate sensitivity poses a major risk. Limited revenue diversification, intense competition, seasonal variability, regulatory risks and work-from-home trends persist.

Nevertheless, Mobile Infrastructure owns a diverse portfolio of 42 parking assets in 21 major U.S. markets, ensuring steady demand and stable revenue streams. The portfolio, valued at $520 million in 2022, saw an 11.9% increase in net operating income (NOI).

The first quarter of 2024 revenue uptick was driven by organic growth and converting 26 assets to management contracts, improving operating efficiency. Increased utilization across key markets, advanced technology and proprietary analytics enhance pricing and demand. Financially stable with $13.9 million in cash and $192.1 million in debt, the company has a $300 million acquisition pipeline.

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

Espey’s shares have outperformed the Zacks Electronics - Military industry over the year-to-date period (+14.6% vs. +7.7%). This microcap company with market capitalization of $57.69 million is well positioned in the defense electronics market, Espey benefits from increasing demand for advanced systems. Its vertical integration allows high-quality production and flexibility.

Innovation is driven by a $7.4 million U.S. Navy award for facility upgrades. However, competitive pressures, dependence on government contracts, declining net sales and stringent regulatory requirements pose potential risks.

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

Other noteworthy reports we are featuring today include Aon plc (AON), Republic Services, Inc. (RSG) and Enphase Energy, Inc. (ENPH).

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>>>

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