Chicago, IL – September 24, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Takeda Pharma TAK, Naspers NPSNY and Packaging Corp. of America PKG.
Here are highlights from Monday’s Analyst Blog:
In the Global Week Ahead?
· More policy rate cuts are set to come in Switzerland and Sweden, after a supersized Federal Reserve policy rate move, with
· U.S. PCE inflation data for AUG, and
· Global business PMI activity surveys for SEP, charting the pressure ahead
In politics, Japan's ruling party is picking its next leader, who will become prime minister.
Sri Lankan voters are choosing a president.
(1) On Sept. 27th, Fresh U.S. Personal Consumption Expenditure (PCE) Data
The Fed's favorite inflation indicator — due on Sept. 27th — will show if price pressure has continued to moderate, even as the Fed finally started to pull back from the restrictive monetary policy that has been in place to cool the economy.
The Personal Consumption Expenditures (PCE) price index for August likely climbed +2.5% on an annual basis, a Reuters poll showed.
The bank's latest economic projections put the annual rate of the price index falling to +2.3% by year-end and +2.1% by the end of 2025.
Investors will also get fresh numbers on consumer confidence and durable goods in the week to come.
(2) Flash Business Purchasing Manager Indices (PMI) Show Expansions, or Not!
Flash business activity data, released from Monday onward, will provide the latest snapshot of the state of the world economy.
The euro area composite Purchasing Managers Index (PMI) has been in expansionary territory for six months and the U.K.'s for 10 months, bolstering a resilient sterling.
Markets appear happy, for now, that the Fed's half-point rate cut will help avert a U.S. recession, and therefore a global one.
Economists polled by Reuters reckon the probability of a recession is around 30%, a figure little changed all year.
But it's not all rosy.
In European powerhouse Germany, the PMI moved deeper into contraction territory below the 50 mark in August and sentiment is weak.
And not to forget a still-struggling Chinese economy that will hurt others.
(3) Central Banks in Sweden and Switzerland Are Next, Setting Monetary Policy
Central banks in Sweden and Switzerland are next up in the Great Rate-Cutting Race of 2024.
Market participants expect both to lower benchmark rates at their meetings on Wednesday and Thursday respectively, and there is a high chance they could front-load cuts this year, meaning 2025 might see comparatively little in the way of policy easing.
The Swiss National Bank was the first major central bank to cut rates back in March. Markets are split on the size of a cut on Thursday.
Appreciation in the franc, which is near its strongest since 2015, is precisely what the SNB does not want right now, given inflation already lags its projections.
Meanwhile, Sweden's Riksbank is all but certain to deliver a 25 basis-point cut on Wednesday, especially as the inflation rate is now well below the bank's target, with a strong possibility of a 50 basis point cut in November.
(4) Japan Picks a New Prime Minister
Japan's ruling party picks its new leader and, by extension, a new prime minister on Sept. 27th. It's a crowded field of nine, with three seen as frontrunners though with very different policy views:
Sanae Takaichi — who would become the nation's first female premier — is a reflationist who has accused the Bank of Japan of raising rates too soon.
In contrast, Shigeru Ishiba is a critic of past monetary stimulus and told Reuters the central bank is "on the right policy track" with rate hikes thus far.
Shinjiro Koizumi, son of charismatic ex-premier Junichiro Koizumi, has so far only said he will respect the Bank of Japan's independence.
The leadership race complicates the bank's job — no matter who wins. A snap election is likely in late October, making policy action at that month's meeting difficult.
(5) Sri Lanka Votes
Sri Lankan voters will have the economy at the forefront of their minds when they cast ballots on Saturday in the debt-saddled nation's presidential poll that is too close to call.
While the island's economy has clawed back from the abyss — and is set to return to growth next year — the austerity and struggle citizens endured to make it happen could drive many away from incumbent Ranil Wickremesinghe and into the arms of leftist parties.
Two front-runners have pledged to revisit or revise International Monetary Fund bailout terms, and one has proposed a new approach to debt restructuring that is otherwise nearly across the finishing line, raising the risk of more political — and economic — uncertainty.
(1) Takeda Pharma: This is a $15 a share stock, with a market capitalization of $47.2B. It is found in the Medical-Drugs industry. I see a Zacks Value score of A, a Zacks Growth score of D and a Zacks Momentum score of B.
Takeda Pharmaceutical Company Ltd. operates as a research-based pharmaceutical company, engaged in manufacturing, marketing, and importing/exporting pharmaceutical drugs.
Takeda's core business comprise of ethical drugs and its portfolio includes lansoprazole for the treatment of peptic ulcers, leuprolide acetate for the treatment of prostate cancer and endometriosis, pioglitazone hydrocholoride for the treatment of diabetes, and candesartan cilexetil for the treatment of hypertension.
The company promotes enhancing R&D pipeline, while concentrating its management resources to the four core therapeutic areas: lifestyle-related diseases, oncology and urological diseases, central nervous system disease and gastroenterological diseases.
It operates in two segments – the Ethical drug business and the Consumer healthcare business. The consumer healthcare business provides Alinamin (vitamin B1 derivative preparations, etc.), Benza (cold remedies).
Takeda Pharmaceutical Company Ltd. is headquartered in Osaka, Japan.
(2) Naspers: This is a $42 a share stock, with a market capitalization of $35.5B. It is found in the Cable Television industry. I see a Zacks Value score of F, a Zacks Growth score of D and a Zacks Momentum score of A.
Naspers Ltd. is a multinational media group with its principal operations in pay television and Internet subscriber platforms, print media, book publishing, private education and technology markets.
The group's activities are conducted through subsidiaries, joint ventures and associated companies.
Naspers' most significant operations are located in South Africa, and it has major operations elsewhere in Africa, as well as in Greece, Cyprus and Asia.
(3) Packaging Corp. of America: This is a $216 a share stock, with a market capitalization of $19.0B. It is found in the Containers – Paper & Packaging industry. I see a Zacks Value score of D, a Zacks Growth score of D and a Zacks Momentum score of C.
Headquartered at Lake Forest, IL, Packaging Corporation of America is the third largest producer of containerboard products and a leading producer of uncoated freesheet paper in North America. The company operates eight mills and 86 corrugated products manufacturing plants.
Packaging Corporation operates in three segments:
Of the 86 manufacturing facilities, 58 are combining operations, commonly called corrugated plants, which manufacture corrugated sheets and finished corrugated packaging products, 27 are sheet plants, which procure combined sheets and manufacture finished corrugated packaging products, and one is a corrugated sheet-only manufacturer.
Packaging segment (91.5% of 2023 revenues): From its containerboard mills, the segment produces linerboard and semi-chemical corrugating medium, which are mainly utilized in the production of corrugated products.
The corrugated products manufacturing plants produce a wide variety of corrugated packaging products, including conventional shipping containers used to protect and transport manufactured goods, multi-color boxes and displays with visual appeal that aid in merchandising the packaged product in retail locations, and honeycomb protective packaging.
The segment also produces packaging for meat, fresh fruit and vegetables, processed food, beverages, and other industrial and consumer products.
The segment sells containerboard and corrugated products to approximately 18,000 customers in over 36,000 locations.
Paper segment (7.6%)is the third largest manufacturer of uncoated freesheet in North America.
The company manufactures and sells white paper, including commodity and specialty paper, which may have custom or specialized features such as colors, coatings, high brightness, and recycled content. White papers consist of communication papers, including cut-size office papers and printing and converting papers.
The segment serves over 150 customers in approximately 450 locations. These customers include office products distributors and retailers, paper merchants, and envelope and other converters.
Corporate and Other segment includes corporate support staff services, and related assets and liabilities.
This segment also includes transportation assets, which are utilized to transport products to and from manufacturing sites.
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