Thursday, February 6, 2025

Today's Research Daily features a real-time scorecard of the ongoing Q4 earnings season, in addition to the usual updated analyst reports on 16 major stocks, including Walmart Inc. (WMT), Visa Inc. (V) and AbbVie Inc. (ABBV), as well as a micro-cap stock AstroNova, Inc. (ALOT). 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's 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 >>> Pre-Markets Higher on Easy Jobless Claims, Q4 Earnings

Q4 Earnings Season Scorecard

Including this morning's reports from the likes of Eli Lilly, Ralph Lauren and others, we now have Q4 results from 293 S&P 500 members or 58.6% of the index's total membership.

Total earnings for these companies are up +11.8% from the same period last year on +5.6% higher revenues, with 77.5% beating EPS estimates and 65.2% beating revenue estimates. The Q4 earnings and revenue growth rates we are seeing from these 293 index members represents a notable acceleration relative to what we had seen from this same group in other recent periods.

With respect to the EPS and revenue beats percentages, the Q4 beats percentages for this group of 293 companies is tracking below the average for this group over the preceding 20-quarter period (last 5 years).

Looking at Q4 as a whole, combining the actual results from these 293 index members with estimates from the still-to-come companies, total earnings are expected to be up +12.3% on +5.4% higher revenues.

The Q4 earnings growth rate improves to +15% once the Energy sector's drag is removed from the aggregate numbers, but the growth rate drops to +7% when the Tech sector's substantial contribution is excluded.

For more details about the Q4 earnings season and evolving expectations for the coming periods, please check out our weekly Earnings Trends report here >>>>Mag 7 Members Report Strong Earnings, Double Down on CapEx

Today's Featured Research Reports

Walmart shares have outperformed the Zacks Retail - Supermarkets industry over the past year (+83.6% vs. +80.9%). The company is benefiting from its diverse business model that spans multiple segments, channels and formats. The company's strong omnichannel strategy has boosted traffic across physical stores and digital platforms.

Walmart’s emphasis on improving delivery services has been successful, contributing to steady grocery market share gains. Upsides like these, along with growth in the advertising business, fueled third-quarter fiscal 2025 results, wherein the top and bottom lines grew year over year, and e-commerce sales surged.

However, Walmart is experiencing adverse currency movements and margin pressures from shifts in product mix. While raising its fiscal 2025 guidance, the company’s implied fourth-quarter view for revenues and operating income reflects a slowdown from the reported third-quarter figures.

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

Shares of Visa have outperformed the Zacks Financial Transaction Services industry over the past year (+26.1% vs. +20.4%). The company’s fiscal first-quarter earnings beat estimates by 3.4%. Its strategic acquisitions and alliances are fostering long-term growth and consistently driving revenues. It expects net revenues to grow in low double-digits in fiscal 2025.

V is fueled by persistent increases in payments, cross-border volumes and sustained investments in technology, is witnessing significant profit growth. The ongoing shift to digital payments is advantageous for Visa, with strong domestic volumes supporting its overall performance. A robust cash position enables the company to enhance shareholder value.

However, elevated operating expenses pose margin challenges. It is witnessing a volatile cash volume from the Asia Pacific and U.S. regions. Moreover, rising client incentives will affect its adjusted revenues.

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

AbbVie shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+13.3% vs. -0.6%). The company beats Q4 estimates for both earnings and sales.  AbbVie has successfully navigated Humira's loss of exclusivity (LOE) by launching two other successful new immunology medicines, Skyrizi and Rinvoq, which are performing extremely well, bolstered by approvals in new indications and should support top-line growth in the next few years.

AbbVie has several early/mid-stage candidates that have the potential to drive long-term growth. It expects to return to robust revenue growth in 2025 following the Humira LOE.

However, the company faces several near-term headwinds like Humira’s biosimilar erosion, increasing competitive pressure on Imbruvica and slow market growth trend for Juvederm fillers in the United States and China.

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

Shares of AstroNova have underperformed the Zacks Technology Services industry over the past year (-33.9% vs. +80.9%). This microcap company with market capitalization of $85.38 million is facing challenges which includes margin compression, liquidity pressures and delayed revenue realization from postponed shipments. Competitive pressures in digital printing, along with geopolitical risks, further weigh on performance.

Nevertheless, AstroNova's aerospace segment continues strong growth, with T&M revenues up 22.3% YoY, driven by robust demand for flight deck printers. Proprietary ToughWriter adoption is set to reach 89% of unit volume by FY27, reducing manufacturing complexity and royalties and enhancing long-term margins.

In the PI segment, the MTEX acquisition strengthens inkjet capabilities, supporting innovation and retrofitting initiatives. Recurring revenues, comprising 70% of total sales, ensure stability and cash flow consistency. Macro tailwinds in digital printing, coupled with operational excellence programs, position AstroNova for sustained expansion.

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

Other noteworthy reports we are featuring today include Accenture plc (ACN), Morgan Stanley (MS) and Chipotle Mexican Grill, Inc. (CMG).

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>>>