Tuesday, June 11, 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 Procter & Gamble Company (PG), ServiceNow, Inc. (NOW) and Lockheed Martin Corporation (LMT), as well as a micro-cap stock Steel Partners Holdings L.P. (SPLP). 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 >>>

Today's Research Daily also features the monthly Equity Strategy report from our Chief Equity Strategist where he discusses the outlook the outlook for the Tech sector in general and the 'Magnificent 7' stocks.

You can find full June Equity Strategy report here >>> Strong Mega-Cap Profit Center in the S&P

Procter & Gamble shares have modestly outperformed the Zacks Soap and Cleaning Materials industry over the past year (+18.0% vs. +17.6%). The company has been gaining from robust pricing and a favorable mix, along with strength across segments. It has been focused on productivity and cost-saving plans to boost margins.

This led to bottom line beating the consensus mark for the seventh consecutive quarter in third-quarter fiscal 2024. Consequently, PG has provided an optimistic fiscal 2024 view.

However, the company has been witnessing supply-chain issues, higher SG&A costs, higher transportation costs and rising inflation. Its significant international presence exposes it to foreign currency risks, which acts as a headwind.

(You can read the full research report on Procter & Gamble here >>>)

Shares of ServiceNow have gained +0.4% over the year-to-date period against the Zacks Computers - IT Services industry’s gain of +5.1%. The company has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation. ServiceNow had 1933 total customers with more than $1 million in annual contract value at the end of the first quarter.

ServiceNow had eight deals greater than $5 million in net new ACV, and four deals of more than $10 million. It closed 59 deals greater than $1 million net new ACV. Number of customers contributing more than $20 million or more grew 50% year over year.

Generative AI deals continued to gain traction with record-breaking net new ACV for Pro Plus, making it the fastest-selling product in ServiceNow’s history. Nevertheless, ServiceNow is suffering from high inflation, stiff competition, and challenging macro-economic environment.

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

Lockheed Martin shares have outperformed the Zacks Aerospace - Defense industry over the past year (+4.5% vs. -10.1%). The company’s broad product offerings allow it to secure big defense contracts from the Pentagon and other U.S. allies, which in turn boosts its backlog count, which was a record $159.4 billion as of Mar 31, 2024.

Lockheed Martin remains the largest U.S. defense contractor with a steady order flow from its leveraged presence in the Army, Air Force, Navy and IT programs. The solid U.S. defense budgetary provisions should boost its business. The company’s products also witness a strong international demand.

However, Lockheed is facing performance issues concerning some of its products that may affect its results. Shortage of skilled labor may adversely impact Lockheed’s operating results. China’s sanctions imposed on Lockheed might also affect its business.

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

Shares of Steel Partners have underperformed the Zacks Diversified Operations industry over the year-to-date period (-8.5% vs. +0.9%). This microcap company with market capitalization of $747.01 million has a diversified portfolio across various sectors and the inclusion of Steel Connect, SPLP mitigates risks and boosts growth. As of Mar 31, 2024, SPLP had $273.9 million in cash, with debt reduced to $92.8 million. SPLP also reduced interest expenses by 76.7% in the first quarter.

Yet, the adjusted EBITDA margin declined from 14.2% to 12.3% in the first quarter of 2024 due to an underperformance in the Energy and Diversified Industrial segments. Energy revenues fell 33.7% and Diversified Industrial sales decreased 3.9%, impacting profitability. Also, fluctuations due to geopolitical tensions impact operational costs and investor confidence.

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

Other noteworthy reports we are featuring today include Regeneron Pharmaceuticals, Inc. (REGN), McKesson Corporation (MCK) and Suncor Energy Inc. (SU).

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>>>