Tuesday, October 15, 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 Alibaba Group Holding Ltd. (BABA), Linde plc (LIN) and Abbott Laboratories (ABT), as well as a micro-cap stock Value Line, Inc. (VALU). 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 >>>

Alibaba’s shares have outperformed the Zacks Internet - Commerce industry year-to-date (+42.1% vs. +24.3%). The company is benefiting from strong momentum in its international commerce retail business, driven by strength in AliExpress’ Choice. Growing international commerce wholesale business, thanks to strength in cross-border-related value-added services, is a tailwind.

Expanding China's wholesale commerce business is a positive. Robust local consumer services and Cainiao logistics services are further driving top-line growth. Strength in Lazada, AliExpress and Trendyol is expected to continue benefiting Alibaba’s international business. Solid adoption of public cloud products remains a plus.

However, rising expenses related to new initiatives, and sluggish China commerce retail business are a concern. Macroeconomic uncertainties and unfavorable foreign exchange fluctuations are risks.

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

Shares of Linde have outperformed the Zacks Chemical - Specialty industry year-to-date (+17.4% vs. -13.9%). The company, being a global leader in industrial gas manufacturing, supplies a wide range of essential gases to industries such as energy, steel, healthcare, manufacturing and electronics. The firm secures long-term contracts with key on-site clients featuring minimum purchase agreements, helping to stabilize earnings during economic downturns.

With a track record of raising dividends for 31 consecutive years, Linde remains committed to rewarding shareholders, supported by its robust business model. However, increasing competition for new projects poses challenges to the company's return on investment.

Additionally, the volatility of energy prices, particularly for natural gas and diesel fuel, presents a significant concern about profitability. Increasing regulatory burdens may negatively impact the industrial gas producer’s overall financial health.

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

Abbott’s shares have gained +8.1% over the year-to-date period against the Zacks Medical - Products industry’s gain of +15.4%. The company’s pipeline is generating several new growth prospects, which will help sustain the positive momentum and contribute to the strong growth projection in 2024. Alinity, the company’s next-generation suite of systems, is a key driver in the core lab diagnostics business.

EPD's impressive performance stems from the company’s unique business model. The company is optimistic about its latest progress with biosimilars and expects this to significantly boost EPD sales, beginning 2025. Freestyle Libre CGM device is also on a great trajectory.

Within Nutrition, after a period of hiccups, Abbott has finally reestablished itself as the market leader in the infant formula business. Yet, the significant runoff of COVID-19 testing-related sales is hurting Abbott’s Diagnostics growth. Tough macro conditions also pose a concern.

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

Shares of Value Line have gained +41.8% over the past year against the Zacks Financial - Investment Management industry’s gain of +59.0%. This microcap company with market capitalization of $455.18 million offers strong shareholder returns through dividends and buybacks, increasing its dividend for 10 consecutive years, with a $1.20 annualized payout.

The company repurchased shares worth $0.2 million in the latest quarter, with $1.03 million still authorized, enhancing EPS. Cost management has been effective, cutting salaries to $3.5 million and preserving margins despite revenue pressures. Contributions from EULAV Asset Management rose to $4.2 million, providing steady cash flow. The $70.9 million investment portfolio offers liquidity.

Value Line’s reputation drives demand for diversified offerings, though publishing revenues dropped 8.8%, signaling weaker demand. Unearned revenues fell 5.4% from April 2024, hinting at future sales challenges. Reliance on a major customer (29.2% of publishing revenue) poses a concentration risk. Cash flow declined to $4.8 million, limiting financial flexibility.

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

Other noteworthy reports we are featuring today include Uber Technologies, Inc. (UBER), Sanofi (SNY) and Moody's Corp. (MCO).

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>>>

Today's Must Read

Alibaba (BABA) Gains From International Commerce Businesses

Linde's (LIN) Long-Term Contracts With Minimum Volume Aid

Abbott (ABT) Shines in Diabetes Care Arm, EPD Prospect High

Featured Reports

Uber (UBER) Benefits From Delivery Business Amid High Debt
The Zacks Analyst likes Uber's efforts to expand its Delivery operations in response to the surge in business. However, high debt does not bode well for its bottom line.

Dupixent to Remain Sanofi's (SNY) Key Top-Line Driver
The Zacks analyst expects Dupixent to remain Sanofi's key top-line driver as it enjoys strong demand trends. Sanofi has also accelerated its pipeline this year and has been active on the M&A front

Buyouts, Diverse Revenues & Restructuring Aid Moody's (MCO)
Per the Zacks analyst, Moody's opportunistic acquisitions, diverse revenue streams and restructuring efforts will bolster its financials. A solid balance sheet keeps capital distributions sustainable.

Motorola (MSI) Rides on Holistic Growth Initiatives
Per the Zacks analyst, Motorola is likely to benefit from opportune acquisitions and strong demand across video security and services, land mobile radio products, and related software.

Travelers (TRV) Gains on Auto & Homeowners, Cat Loss Ails
Per the Zacks analyst, persistent progress and strong market of the auto and homeowners businesses have driven revenues of Travelers. However, exposure to cat loss induces earnings volatility.

Growth Projects Aid Kinross Gold (KGC) Amid Cost Woes
Per the Zacks analyst, Kinross will benefit from the progress of its key development projects, which will boost production and cash flows. However, high production costs will weigh on its margins. n

Kohl's (KSS) Benefits From Focus on Strategic Framework
Per the Zacks analyst, Kohl's is gaining on solid strategic framework, which includes improving customer experience, simplifying value strategies, undertaking strict inventory and expense management.

New Upgrades

CoStar Group (CSGP) Rides on Strong Subscription Revenues
Per the Zacks analyst, CoStar Group's resilient and diversified subscription business is expected to drive growth. It benefits from a robust portfolio of marketplaces.

Strategic Investments, Acquisitions Aid California Water (CWT)
Per the Zacks analyst, California Water's infrastructure investments should help it provide reliable services. It gains from the expansion of operations through acquisitions and organic activities.

Strength in BioReference Continue to Aid OPKO Health (OPK)
The Zacks analyst is upbeat about OPKO Health's continued strength in its BioReference, which offers comprehensive laboratory testing services. Potential in Rayaldee is an added plus.

New Downgrades

Flucuating Commodity Price, Competition Ail Murphy (MUR)
Per the Zacks analyst Murphy Oil future prospects can be adversely impacted by the fluctuating commodity prices, while competitive industry can affect its profitability.

Vail Resorts (MTN) Performance Hurt by Reduced Visitation
Per the Zacks analyst, Vail Resorts' performance is being hurt due to poor visitation, driven by unfavorable conditions at its North American and Australian resorts.

Softer Encore Boston Harbor Trend Ails Wynn Resorts (WYNN)
Per the Zacks analyst, Wynn Resorts' performance is being hurt by softer trends in the Encore Boston Harbor operations. Also, increased costs and expenses are a concern.

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Sanofi (SNY) : Free Stock Analysis Report

Abbott Laboratories (ABT) : Free Stock Analysis Report

Moody's Corporation (MCO) : Free Stock Analysis Report

Linde PLC (LIN) : Free Stock Analysis Report

Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report

Value Line, Inc. (VALU): Free Stock Analysis Report

Uber Technologies, Inc. (UBER) : Free Stock Analysis Report

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