Monday, August 26, 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 Eli Lilly and Company (LLY), Chevron Corporation (CVX) and Abbott Laboratories (ABT), as well as a micro-cap stocks Bridger Aerospace Group Holdings, Inc. (BAER).  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 >>>

Eli Lilly shares were hit hard during the recent market turmoil, but they have recouped all of their losses by now. On a year-to-date basis, Eli Lilly shares are up +63.9% vs. +29.3% for the large-cap pharma industry. Driving Eli Lilly's momentum is the company’s weight loss drug and a track record of strong quarterly results.

Eli Lilly has seen unparalleled success with its GLP-1 drugs, Mounjaro and Zepbound. Despite a short time on the market, they have become key top-line drivers, with demand rising rapidly. In the past couple of years, it has received approvals for several new drugs like Kisunla, Omvoh and Jaypirca and witnessed pipeline and regulatory success. Its new drugs have been contributing significantly to its top-line growth in 2024. Lilly is also making rapid pipeline progress in areas like obesity, diabetes and Alzheimer’s. 

However, declining sales of Trulicity, rising pricing pressure on some drugs and potential competition in the GLP-1 diabetes/obesity market are some top-line headwinds.

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

Shares of Chevron have gained +0.2% over the past six months against the Zacks Oil and Gas - Integrated - International industry’s gain of +7.2%. The company is grappling with high sensitivity to oil price fluctuations and relatively expensive valuation. Another concern is the sub-100% reserve replacement ratio, indicating challenges in replenishing produced energy. Considering all these factors, investors are advised to wait for a better entry point.

Nevertheless, Chevron is positioned as one of the top global integrated oil firms, set for sustainable production growth, particularly due to its dominant position in the lucrative Permian Basin. Further, the planned acquisition of Hess Corporation is expected to significantly strengthen Chevron's presence in oil-rich Guyana.

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

Abbott shares have gained +11.6% over the past year against the Zacks Medical - Products industry’s gain of +15.6%. 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 Bridger Aerospace have underperformed the Zacks Aerospace - Defense industry over the past year (-54.9% vs. +0.3%). This microcap company with market capitalization of $165.88 million is witnessing high leverage and debt servicing pressures, seasonal revenue dependence, ongoing losses and execution risks in international expansion pose significant challenges.

Its success hinges on maximizing fleet utilization, managing debt and maintaining government contracts amid an unpredictable wildfire environment. Nevertheless, Bridger Aerospace is positioned to capitalize on the rising demand for aerial firefighting services, driven by climate change and population shifts to wildfire-prone areas. 

Bridger Aerospace's fleet, including CL-415EAF "Super Scoopers" and advanced surveillance aircraft, secures its strong market position and ensures a stable income. The acquisition of FMS Aerospace diversifies revenue streams, adding year-round income and reducing reliance on seasonal fire activity. The expansion into international markets offers growth potential.

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

Other noteworthy reports we are featuring today include Phillips 66 (PSX), Occidental Petroleum Corporation (OXY) and BCE Inc. (BCE).

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>>>

Today's Must Read

Lilly's (LLY) Mounjaro, Zepbound Key to 2024 Sales Growth

Chevron (CVX) to Gain Guyana Foothold with Hess Buy

Core Lab Diagnostics, Solid EPD Prospect Aids Abbott (ABT)

Featured Reports

Planned Investments, Permian Basin Focus Aid Occidental (OXY)
Per the Zacks analyst Occidental's investments to strengthen infrastructure and expansion of Permian Basin operation through acquisition will drive its performance over the long run.

Strength in Bell Media Aids BCE, High Interest Costs Ails
Per the Zacks analyst, BCE's performance is cushioned by robust sales in the Bell Media segment. Higher depreciation and interest expenses are likely to dent its bottom line in 2024.

Focus on Cost Savings to Bolster McCormick's (MKC) Margins
Per the Zacks analyst, McCormick's focus on cost-saving plans will continue to enhance its margins. The company expects its fiscal 2024 gross margin to increase by 50 to 100 basis points.

MAP 2025 Plan Aids RPM International (RPM), High Costs Hurt
Per the Zacks analyst, RPM International is benefiting from the execution of its MAP 2025 initiatives and solid demand trends across two of its reportable segments. Yet, high costs and expenses hurt.

Solid Budget Aids Curtiss-Wright (CW) Amid Fuel Price Hike
Per the Zacks analyst, increasing U.S. defense budget should boost demand for Curtiss-Wright's nuclear propulsion equipment. Yet rising fuel price might hurt airline industry and in turn the stock

Rising Loan Balance Aid First Horizon (FHN) Amid High Costs
Per the Zacks analyst, First Horizon's strategic buyouts, as well as a strong presence across high-growth markets, are likely to drive its loan growth. Yet, the rising expense base is a concern.

Strong SMB clientele Aids BILL Holdings' (BILL) Prospects
Per the Zacks analyst, BILL is benefiting from an expanding small and medium business (SMB) clientele, as well as a diversified business model.

New Upgrades

Phillips 66's (PSX) Diversified Business Model Aids Growth
Per the Zacks analyst, Phillips 66's (PSX) focus on midstream, renewables and chemicals sectors should aid its cash flow. However, increasing regulatory costs might limit the company's profitability.

Patient-Centric Care Model, Overseas Growth Aid DaVita (DVA)
The Zacks analyst is upbeat about DaVita's patient-centric business model that leverages its kidney care services platform. Steady expansion in the international markets is an added plus.

Globe Life (GL) Continues to Gain From Solid American Income
Per the Zacks analyst, Globe Life is set to grow on solid American Income distribution channel, which remains the largest contributor of premium and underwriting margin, that aided revenue growth.

New Downgrades

American Airlines' (AAL) Prospects Hurt by Elevated Costs
High fuel and labor expenses at American Airlines bother the Zacks analyst. Weakness pertaining to liquidity represents another headwind.

Lower Production in Europe & Rising Debt Ail Magna (MGA)
Per the Zacks analyst, lower vehicle production in Europe and no further production of the Fisker Ocean are likely to hit Magna's top line. Rising debt levels are also concerning.

Avnet (AVT) Hurt by Declining Demand, High Inventory Levels
Per the Zacks analyst, softened demand in a tight IT spending environment, along with high inventory levels at customers, is likely to hurt Avnet's financial performance in the near term.

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Abbott Laboratories (ABT) : Free Stock Analysis Report

Chevron Corporation (CVX) : Free Stock Analysis Report

Eli Lilly and Company (LLY) : Free Stock Analysis Report

Occidental Petroleum Corporation (OXY) : Free Stock Analysis Report

BCE, Inc. (BCE) : Free Stock Analysis Report

Phillips 66 (PSX) : Free Stock Analysis Report

Bridger Aerospace Group Holdings, Inc. (BAER): Free Stock Analysis Report

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