Friday, January 31, 2025

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 NVIDIA Corp. (NVDA), Johnson & Johnson (JNJ) and T-Mobile US, Inc. (TMUS), as well as a micro-cap stock The Eastern Co. (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 >>>

Ahead of Wall Street

The daily 'Ahead of Wall Street' article is a must-read for all investors who would like to be ready for that day's trading action. The article comes out before the market open and attempts to make sense of that morning's economic releases and how they will affect that day's market action. You can read this article for free on our home page and can actually sign up there to get an email notification as this article comes out each morning.

You can read today's AWS here >>> December PCE Steady with Expectations; Plenty of Mixed Q4 Earnings

Today's Featured Research Reports

NVIDIA’s shares have outperformed the Zacks Semiconductor - General industry over the past year (+96.7% vs. +73.9%). The company is benefiting from the strong growth of artificial intelligence (AI), high performance and accelerated computing. The data center end-market business is benefiting from the growing demand for generative AI and large language models using graphic processing units (GPUs) based on NVIDIA Hopper and Ampere architectures. 

A surge in hyperscale demand and higher sell-ins to partner across the Gaming and ProViz end markets following the normalization of channel inventory are acting as tailwinds. Collaborations with Mercedes-Benz and Audi are likely to advance its presence in the autonomous vehicles and other automotive electronics space. 

The Zack’s analyst expect NVIDIA’s revenues to witness a CAGR of 50.5% through fiscal 2025-2027. However, softening IT spending amid macroeconomic headwinds and the U.S.-China tech war remain major concerns.

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

Shares of Johnson & Johnson have underperformed the Zacks Large Cap Pharmaceuticals industry over the past year (-0.5% vs. +1%). The company’s sales in the MedTech segment have slowed down due to headwinds in Asia-Pacific markets like China and competitive pressure in some categories. The launch of Stelara generics is expected to significantly erode the drug’s sales in 2025. The uncertainty around its talc lawsuits remains.

Nevertheless, J&J beat Q4 estimates for earnings and sales. Its Innovative Medicine unit is showing a growth trend, driven by existing products like Darzalex, Tremfya and Erleada and continued uptake of new launches, including Spravato, Carvykti and Tecvayli. 

J&J is making rapid progress with its pipeline and has been on an acquisition spree lately, which has strengthened its pipeline. J&J has also made strong progress toward resolving the talc litigation.

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

T-Mobile’s shares have outperformed the Zacks Wireless National industry over the past year (+46.6% vs. +27.6%). The company reported impressive fourth-quarter 2024 results, with both the bottom and top lines surpassing the respective Zacks Consensus Estimate. The company is benefiting from solid demand for postpaid services. 

In 2024, the company added 6.1 million postpaid net customers while postpaid net account additions were 1.1 million, both metrics being the best in the industry. Solid growth in free cash flow accentuates efficient capital management and implies that the company is well-positioned to invest in growth initiatives and pay debt and dividends.

However, owing to the stock’s premium valuation, we believe investors should remain cautious as macroeconomic factors, market saturation, or economic downturns can significantly impact overvalued stocks like TMUS. Fierce competition is straining profitability. A high debt burden remains a concern.

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

Shares of Eastern have outperformed the Zacks Security and Safety Services industry over the past year (+17% vs. +12.1%). This microcap company with market capitalization of $171.52 million demonstrates robust revenue growth, with net sales rising 6% year over year to $206.1 million in the first nine months of 2024, fueled by demand for truck mirror assemblies and transport packaging. Its 13% backlog growth highlights strong future sales potential. Gross margins improved to 25.2%. 

Portfolio realignment, including divesting Big 3 Mold, focuses resources on high-growth segments. The “One Eastern” strategy enhances efficiency, supported by investments in Mexico and China for competitive scalability. Eastern’s 337th consecutive dividend exemplifies financial stability and shareholder focus. 

However, challenges include a 54% drop in operating cash flow, rising SG&A expenses, elevated capital intensity, and inventory pressures. Debt increased to $41.5 million with rising leverage, amplifying interest rate risks. Geopolitical challenges further weigh on financial flexibility.

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

Other noteworthy reports we are featuring today include Starbucks Corp. (SBUX), The Boeing Co. (BA) and Marathon Petroleum Corp. (MPC).

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>>>