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Research Daily

Sheraz Mian

Top Analyst Reports for JPMorgan Chase, Chevron & Cisco


Trades from $3

Thursday, May 30, 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 JPMorgan Chase & Co. (JPM), Chevron Corporation (CVX) and Cisco Systems, Inc. (CSCO), as well as two micro-cap stocks Atrion Corporation (ATRI) and The Eastern Company (EML).

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 >>>

Shares of JPMorgan Chase have outperformed the Zacks Banks - Major Regional industry over the past year (+51.0% vs. +45.1%). High rates for longer time period, strategic buyouts and partnerships, opening new branches and solid loan balance will aid net interest income (NII), though higher funding costs will weigh on it.

While there has been a resurgence in global deal-making activities, a complete revival will still take some time. Thus, the performance of the investment banking (IB) business is not expected to improve much anytime soon. The volatile nature of the capital markets business and high mortgage rates will likely hamper fee income.

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

Chevron shares have gained +9.4% over the past year against the Zacks Oil and Gas - Integrated - International industry’s gain of +16.4%. The company is positioned as one of the top global integrated oil firms, set for sustainable production growth, particularly due to its dominant position in the lucrative Permian Basin.

Further, the recent acquisition of Hess Corporation is expected to significantly strengthen Chevron's presence in oil-rich Guyana. However, the company is grappling with high sensitivity to oil price fluctuations and relatively expensive valuation.

Another concern is the sub-100% reserve replacement ratio, indicating challenges in replenishing produced energy. Considering all these factors, investors are advised to wait for a better entry point.

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

Shares of Cisco have declined -3.7% over the past year against the Zacks Computer - Networking industry’s decline of -5.6%. The company’s third-quarter fiscal 2024 results suffered from weak networking revenues. However, security and observability revenues grew year over year.

It witnessed product order growth in two of its largest product portfolios, data center switching and campus switching, as well as in security and collaboration. Cisco’s business model has evolved with subscription revenues accounting for more than half of its total revenues. The addition of Splunk further enhances recurring revenue base of the company.

The buyout significantly expands Cisco’s portfolio of software-based solutions, contributing more than $4 billion in annualized recurring revenue and makes it one of the largest software companies in the world. The launch of AI-powered Hypershield, which combines security and networking, strengthened Cisco’s security portfolio.

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

Atrion shares have outperformed the Zacks Medical - Dental Supplies industry over the year-to-date period (+23.2% vs. -1.5%). This microcap company with market capitalization of $810.28 million has a strong cash position and a $25 million credit facility support financial stability and future growth.

The growing global medical devices market presents significant opportunities for Atrion, leveraging trends like chronic diseases and an aging population. Geographic diversification, with robust U.S. revenues and international contributions, mitigates regional risks.

However, COGS increased by 40.4%, resulting in declining gross margins due to higher manufacturing costs and a $2.3 million inventory write-off. High inventory levels, regulatory risks, and competitive pressures from major players could strain profitability.

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

Shares of Eastern Company have outperformed the Zacks Security and Safety Services industry over the year-to-date period (+29.2% vs. +11.1%). This microcap company with market capitalization of $179.46 million have successful customer relationships and a stable order flow, providing a solid foundation for sustained growth.

Operational efficiencies are evident with a $3.5 million inventory reduction and improved gross margin of 24% from 21% in Q1 2023, driven by cost-saving initiatives. Eastern's financial health is strengthened by reducing long-term debt. A robust 83-year history of 334 consecutive quarterly dividends underscores financial stability and shareholder value.

Vertical integration and strategic M&A opportunities aim to boost profitability. However, a 6% sales decline in Q1 2024, supply chain disruptions, cost inflation, competitive pressures, dependence on key customers, and regulatory risks pose challenges.

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

Other noteworthy reports we are featuring today include Intuit Inc. (INTU), International Business Machines Corporation (IBM) and The Sherwin-Williams Company (SHW).

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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