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Top Stock Reports for The Home Depot, Philip Morris & BlackRock

·6-min read

Wednesday, August 17, 2022

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including The Home Depot, Inc. (HD), Philip Morris International Inc. (PM) and BlackRock, Inc. (BLK). 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 >>>

The Home Depot shares have gained +1.5% over the past year, lagging Lowes' +8.1% gain, but outperforming the broader market's -3.2% decline. The company reported ninth straight quarter of earnings and sales beat in the fiscal second quarter on Tuesday. Results benefited from strong demand for home-improvement projects, robust housing market trends and ongoing investments.

The Home Depot also benefited from continued strength in both Pro and DIY categories as well as digital momentum. Its interconnected retail strategy and underlying technology infrastructure have helped consistently boost web traffic for the past few quarters, aiding digital sales.

However, the company reported soft gross margin in the fiscal second quarter driven by higher supply chain investments. Higher inventory levels and interest expense also remain concerning.

(You can read the full research report on The Home Depot here >>>)

Philip Morris shares have gained +6.2% over the past year, roughly in-line with the Zacks Tobacco industry’s gain of +6.8%. The company has been benefiting from its pricing power, which aided its second-quarter 2022 results. The top and the bottom line increased year on year and beat the Zacks Consensus Estimate.

Its strength in IQOS and the combustible business drove performance despite headwinds. Proforma pricing for combustible products rose 3.5% and nearly 5%, excluding Indonesia. Strength in the reduced-risk products category has been benefiting the company for a while.

However, Philip Morris has been facing supply-chain and regulatory hurdles in its Russian business. The company has undertaken steps to scale down its operations in the region due to the Ukraine war. Also, management expects continued uncertainty concerning the recovery pace from the pandemic-led operating landscape.

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

BlackRock shares have declined -15.7% over the past year against the Zacks Financial - Investment Management industry’s decline of -10.3%. The rise in equity market volatility and a fall in asset prices in an environment of macroeconomic uncertainty is typically an unfavorable backdrop for BlackRock and other asset managers.

However, BlackRock have has an impressive earnings surprise history. The company's earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters. BlackRock continues to restructure the equity business, which along with strategic acquisitions, will likely keep supporting revenue growth, and help in expanding market share and footprints globally. A robust assets under management (AUM) balance will likely further support the top line.

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

Other noteworthy reports we are featuring today include PayPal Holdings, Inc. (PYPL), Deere & Company (DE), and Starbucks Corporation (SBUX).

Sheraz Mian
 
Director of Research

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

Focus on Pro Customers to Aid Home Depot's (HD) Top Line

Phillip Morris (PM) Gains From Smoke-Free Product Category

Buyouts, AUM Balance Aid BlackRock (BLK), Higher Costs A Woe

Featured Reports

PayPal (PYPL) Benefits From Increasing Total Payment Volume
Per the Zacks analyst, PayPal's total payment volume is rising owing to solid adoption of Venmo and merchant services. Further, growing momentum across PayPal Checkout experiences is positive.

Deere (DE) Rides on Farm Equipment Demand Amid Higher Costs
Per the Zacks analyst, Deere will gain from increased farm equipment demand driven by higher commodity prices despite escalating material and logistic costs.

Store Growth Aids Starbucks (SBUX), Dismal China Comps Hurts
Per the Zacks analyst, Starbucks' rapid unit growth, best-in-class loyalty program and digital offerings bode well. However, dismal performance in China continues to hurt the company's performance.

Infrastructure Investment & Clean Assets Aid Xcel Energy (XEL)
Per the Zacks analyst, Xcel Energy's investment of $26 billion through 2026 to enhance clean electricity generation and strengthen its infrastructure will boost its profitability.

VeriSign (VRSN) Gains on Higher Demand for Domain Names
Per the Zacks analyst, VeriSign has been gaining from growth in .com and .net domain name registrations. However, surging expenses related to cybersecurity and infrastructure spending is a concern.

J.B. Hunt (JBHT) Rides on Dividends & Buyback, Expenses Ail
The Zacks analyst likes the shareholder-friendly measures adopted by J.B. Hunt. However, rising operating expenses are concerning as they are likely to keep the bottom line under pressure.

Exact Sciences' (EXAS) Screening Sales Grow Amid High Costs
The Zacks analyst is upbeat about Exact Sciences' robust revenue growth in the legacy Screening business segment. However, mounting operating expenses weigh on the company's bottom line.

New Upgrades

Petrobras (PBR) Aided by Brazil's Pre-Salt Oil Reserves
The Zacks analyst believes that Petrobras' stake in Brazil's huge pre-salt oil reserves puts it in an enviable position to maintain an impressive production growth profile for years to come.

Arch Capital (ACGL) Set to Grow on Improving Premium
Per the Zacks analyst, Arch Capital is set to grow on solid Insurance and Reinsurance business driving improvement in premium growth which is backed by diverse product & service portfolio.

Lodging Industry Recovery, Top Assets Aid Host Hotels (HST)
Per the Zacks Analyst, with a rebound in the lodging industry, a solid portfolio of upscale hotels across lucrative markets and capital-recycling moves, Host Hotels is likely to witness RevPAR growth.

New Downgrades

Xifaxan Patent Litigation, Macro Challenges Hurt Bausch (BHC)
Per the Zacks analyst, the ongoing patent litigation for one of the top drugs Xifaxan will remain an overhang and an earlier-than-expected generic entry will adversely impact the top line.

High Costs & Inflation to Ail Spectrum Brands' (SPB) Margins
Per the Zacks analyst, Spectrum Brands has been reeling under elevated supply-chain costs stemming from higher inventory. This along with rising inflation are likely to persist in FY22.

Increased Cat Loss & Elevated Debt Level Hurt Allstate (ALL)
Per the Zacks analyst, exposure to catastrophic events continues to dent underwriting profitability. Rising debt remains a concern as it escalates interest expenses.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
BlackRock, Inc. (BLK) : Free Stock Analysis Report
 
Starbucks Corporation (SBUX) : Free Stock Analysis Report
 
Philip Morris International Inc. (PM) : Free Stock Analysis Report
 
Deere & Company (DE) : Free Stock Analysis Report
 
The Home Depot, Inc. (HD) : Free Stock Analysis Report
 
PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
 
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Zacks Investment Research