Thursday, June 20, 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 Walmart Inc. (WMT), Exxon Mobil Corporation (XOM) and Danaher Corporation (DHR), as well as a micro-cap stock GSI Technology, Inc. (GSIT). 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 spublished by our analyst team today.

You can see all of today’s research reports here >>>

Walmart shares have outperformed the Zacks Retail sector over the past year (+31.5% vs. +23%), with the outperformance notably accelerating following the retail giant's last quarterly release. The company is gaining from its highly diversified business with contributions from various segments, channels and formats. Walmart has been benefiting from an increase in in-store and digital channel traffic due to its robust omnichannel initiatives.

Store-fulfilled delivery sales jumped 50% in the fourth quarter of fiscal 2024. The strategic focus on enhancing delivery services has also been rewarding, as evidenced by the constant increase in the market share for groceries. Upsides like these, along with growth in the advertising business, fueled Walmart’s fourth-quarter results and led to an encouraging fiscal 2025 view.

However, the retail landscape continues to be dynamic due to challenges like inflation and volatile consumer spending. High SG&A expenses are also a concern.

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

Shares of Exxon Mobil have outperformed the Zacks Oil and Gas - Integrated - International industry over the past year (+5.3% vs. +3.7%). The company is a reliable player in the energy sector, it boasts a resilient capital structure and a track record of prudent capex management. Its strategic discoveries in the Stabroek Block and Permian Basin promise growth and lower greenhouse gas intensity.

With a robust balance sheet, ExxonMobil prioritizes shareholder returns, evidenced by substantial buybacks and the strategic acquisition of Pioneer Natural Resources. The company aims to increase its annual share buybacks to $20 billion through 2025.

However, challenges loom, notably in the upstream operations, which are susceptible to volatile oil prices and regulatory hurdles. While committed to shareholders, ExxonMobil faces scrutiny for lagging industry peers in terms of dividend yield. Reliance on finding economically recoverable reserves and exposure to OPEC production cuts add to uncertainties.

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

Danaher shares have outperformed the Zacks Diversified Operations industry over the year-to-date period (+11.3% vs. -2.6%). The company’s stable demand in the academic and applied markets is supporting its Life Sciences segment. The segment has been witnessing positive responses toward its new products.

Danaher’s commitment to return value to shareholders is encouraging. Synergies from the Abcam acquisition bolster the company’s growth. Through company’s DBS initiatives, it has been able to reduce the impact of supply-chain constraints and inflationary pressures.

However, Danaher is plagued by weakness in the Biotechnology unit due to decreased demand in the bioprocessing business. An increase in cost of sales may continue affecting the company’s margin performance. High debt levels may raise its financial obligations and drain its profitability. Given the company’s international exposure, forex woes are weighing on its top line.

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

Shares of GSI Technology have underperformed the Zacks Computer- Storage Devices industry over the year-to-date period (+1.1% vs. +94.0%). This microcap company with market capitalization of $67.94 million saw significant losses and declining revenues, with potential liquidity issues highlighted by a drop in cash reserves to $14.4 million. Competitive pressures from major HPC players presents significant risks.

Nevertheless, GSI Technology's strategic advancements with the Gemini-I and Gemini-II APUs mark significant progress in HPC and AI processing, offering substantial performance gains and catering to high-capacity, low-power applications.

The growing HPC market, driven by AI, IoT, and data-intensive applications, presents an opportunity for GSI to capture a significant share, especially in sectors like aerospace, defense, energy, and healthcare. The sale and leaseback of its headquarters add $11.9 million for R&D, while successful shipments of radiation-hardened products for the ESA mission open high-margin market opportunities.

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

Other noteworthy reports we are featuring today include American Express Company (AXP), Marriott International, Inc. (MAR) and Lennar Corporation (LEN).

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>>>