Top Stock Reports for Toyota, AstraZeneca & Chubb
Thursday, September 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 Toyota Motor Corp. (TM), AstraZeneca PLC (AZN) and Chubb Ltd. (CB), as well as two micro-cap stocks Air T, Inc. (AIRT) and Preformed Line Products Co. (PLPC). 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 >>>
Toyota Motor’s shares have outperformed the Zacks Automotive - Foreign industry over the past year (+1.0% vs. -9.3%). The company’s robust lineup of trucks and sport utility vehicles is set to fuel sales. To capitalize on the global shift to environment-friendly vehicles, the auto giant is deepening its focus on manufacturing hybrid, electric and hydrogen fuel-cell vehicles, which will bolster the company’s product competitiveness.
Toyota Motor aims to expand global sales of BEVs to 1.5 million units in 2026 and 3.5 million units a year by 2030. Toyota’s commitment to maximizing shareholders’ value via dividends and buybacks is also praiseworthy.
However, labor cost inflation is expected to continue to weigh on margins. Rising debt levels, along with high R&D expenses and capex, might pose challenges. Also, Toyota expects sales in Japan to decrease, given the lower shipments of Daihatsu. Thus, the stock warrants a cautious stance now.
(You can read the full research report on Toyota here >>>)
Shares of AstraZeneca have gained +17.6% over the year-to-date period against the Zacks Large Cap Pharmaceuticals industry’s gain of +24.6%. The company has a diverse product portfolio and a global footprint. Its key drugs like Lynparza, Tagrisso, Imfinzi, Fasenra, Ultomiris and Farxiga should keep driving revenues.
AstraZeneca’s pipeline is strong, with important late as well as mid-stage pipeline data readouts lined up. AstraZeneca has also been engaged in external acquisitions and strategic collaborations to boost its pipeline while investing in geographic areas of high growth like emerging markets. Backed by its new products and pipeline drugs,
AstraZeneca believes it can post industry-leading top-line growth in the 2025-2030 period. By 2030, it expects to generate $80 billion in total revenues. However, AstraZeneca’s diabetes franchise faces stiff competition while pricing pressure hurts sales in the respiratory unit.
(You can read the full research report on AstraZeneca here >>>)
Chubb’s shares have outperformed the Zacks Insurance - Property and Casualty industry over the past year (+39.1% vs. +28.3%). The company’s suite of compelling products as well as services, focus on capitalizing on the potential of middle-market businesses and investments in various strategic initiatives pave the way for long-term growth.
Several distribution agreements have expanded its network, boosting its market presence. An impressive inorganic growth story helps to achieve a higher long-term return on equity. Chubb expects adjusted net investment income to be in the range of $1.57 billion to $1.63 billion per quarter in 2024.
Chubb boasts a strong capital position with sufficient cash generation capabilities that ensure steady payouts to investors. Second quarter EPS beat estimates. However, exposure to catastrophe loss induces underwriting volatility. Escalating expenses weigh on margin expansion.
(You can read the full research report on Chubb here >>>)
Shares of Air T have outperformed the Zacks Transportation - Air Freight and Cargo industry over the year-to-date period (+4.9% vs. -7.7%). This microcap company with market capitalization of $47.61 million primarily serving FedEx, is a growth driver with $30.4 million in first-quarter fiscal 2025 revenues, up 9.6% year over year, aided by fleet expansion and stable demand.
Its asset-light model lowers operational risk. Despite a 7% overall revenue decline, strength in air cargo and commercial jet engines and parts and a sole-source deicer supply contract with the U.S. Air Force underpin resilience.
However, rising operating losses, inventory write-downs, high debt and a shrinking order backlog in Ground Equipment Sales signal challenges and potential pressure on future performance. Commercial Jet Engines revenues fell 12%, but margin improvements maintained profitability. Joint ventures (JVs) in aircraft asset management offer upside potential. Key customer dependence and seasonal risks add to concerns.
(You can read the full research report on Air T here >>>)
Shares of Preformed Line Products have underperformed the Zacks Electronics - Miscellaneous Products industry over the past year (-4.9% vs. +18.8%). This microcap company with market capitalization of $620.94 million is facing near-term risks, including declining sales driven by weakness in the communications market, margin compression, foreign exchange challenges and reduced cash flow. The slowdown in customer deployments, delays in stimulus funding and ongoing inventory management challenges weigh on the company’s outlook.
Nevertheless, Preformed Line Products offers a strong investment case due to its robust market position, diverse product portfolio and solid financial health. The company’s extensive range of products for energy, telecommunications and other industries, backed by strategic global manufacturing facilities, ensures a competitive edge.
PLPC’s focus on innovation and manufacturing efficiency positions it to benefit from anticipated infrastructure investments, particularly in the energy and communications sectors.
(You can read the full research report on Preformed Line Products here >>>)
Other noteworthy reports we are featuring today include Public Storage (PSA), Fidelity National Information Services, Inc. (FIS) and Barrick Gold Corp. (GOLD).
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
Rise in Hybrid Adoption to Aid Toyota (TM) Amid High Costs
Key Drugs Aid AstraZeneca (AZN) Sales; Pipeline Strong
Better Pricing, New Business Growth Drive Chubb Limited (CB)
Featured Reports
Public Storage (PSA) Gains from Buyouts, Supply Woes Remain
Per the Zacks Analyst, high brand value, strategic acquisitions and a healthy balance sheet are Public Storage's upsides. However, a lower demand and a high supply of self-storage units are concerns.
Strength in Cloud Solutions Aid CDW Amid Soft Demand Trends
Per the Zacks analyst, a continuous downtrend across the Corporate, Small Business and Public segments units affects CDW's top line. Momentum in security and cloud solutions aids service revenues.
Tyson Foods (TSN) Benefits From Chicken Segment Performance
Per the Zacks analyst, strength in the Chicken segment keeps Tyson Foods well-placed amid Beef unit hurdles. Operational improvements and investments in value-added products have been working well.
Darden (DRI) Banks on Digital Initiatives, High Costs Ail
Per the Zacks analyst, Darden's emphasis on digital media capabilities, uber partnership and menu innovation bode well. However, the rise in labor costs is a concern.
Solid Order Flow Aids Textron (TXT) Amid Labor Shortage
Per the Zacks analyst, solid order activity and backlog count is likely to boost Textron's future revenues. Yet shortage of skilled labor might adversely impact its overall growth.
Liberty Global (LBTYA) Rides on Growing Mobile User Base
Per the Zacks analyst, Liberty Global is benefiting from an expanded mobile subscriber base. Strong growth prospect of Virgin Media O2 joint venture is a key catalyst.
Global M&A Deals Aid Moelis & Company (MC) Amid Cost Woes
Per the Zacks analyst, Moelis & Company's continued solid mergers and acquisitions along with restructuring efforts will aid revenues. Higher expenses due to rise in compensation costs is a woe.
New Upgrades
Strong Organic Growth and Buyouts Aid Fidelity National (FIS)
Per the Zacks analyst, the strong performance of Fidelity National's Merchants Solution segment is driving revenues. Acquisitions continue to boost its presence across several regions.
Higher Gold Prices, Growth Projects Drive Barrick (GOLD)
Per the Zacks analyst, Barrick will benefit from progress in key growth projects that are expected to boost production. Rallying gold prices should also translate into strong profit margins.n
Decipher's Strength Aids Veracyte (VCYT), MRD Test Underway
Per the Zacks analyst, robust adoption of Veracyte's Decipher test is backed by its Level 1B status in updated NCCN guidelines. It also advances its pilot MRD test for muscle-invasive bladder cancer.
New Downgrades
Delek US Holdings (DK) Weighed Down by Massive Debt Burden
The Zacks analyst believes that Delek US Holdings' high debt-to-capitalization ratio of 71.5% is a concern, as it restricts the company's financial freedom to tap into growth opportunities.
BP's Gulf of Mexico Litigation Expenses Weigh on Financials
BP's Gulf of Mexico oil spill payments may limit the company's cash generation prospects. Also, the company's significant reliance on debt capital concerns the Zacks analyst.
Old Dominion's (ODFL) Prospects Hurt by Freight Demand Woes
The Zacks analyst is concerned about the challenging freight environment. Due to weak freight demand, shipment volumes and rates are low.
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
AstraZeneca PLC (AZN) : Free Stock Analysis Report
Toyota Motor Corporation (TM) : Free Stock Analysis Report
Public Storage (PSA) : Free Stock Analysis Report
Fidelity National Information Services, Inc. (FIS) : Free Stock Analysis Report
Chubb Limited (CB) : Free Stock Analysis Report
Barrick Gold Corporation (GOLD) : Free Stock Analysis Report
Preformed Line Products Company (PLPC): Free Stock Analysis Report
Air T, Inc. (AIRT): Free Stock Analysis Report