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Top Stock Reports for United Parcel Service, Medtronic & Shopify

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·6-min read
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Tuesday, June 1, 2021

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 United Parcel Service, Inc. (UPS), Medtronic plc (MDT) and Shopify Inc. (SHOP). 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 >>>

Shares of United Parcel Service have outperformed the Zacks Transportation - Air Freight and Cargo industry in the year-to-date period (+27.4% vs. +24.9%). The Zacks analyst believes that United Parcel Service is being aided by a significant ramp-up in home deliveries amid the prevalent coronavirus pandemic. In fact, exponential e-commerce growth emerged as a huge booster for UPS amid this continued pandemic-ravaged scenario and is responsible for its earnings outperformance for four successive quarters.

The Zacks analyst is also impressed by UPS' efforts to reward its shareholders even in the current uncertain times. Strong free cash flow generation is another positive. The bullish sentiment surrounding the stock is evident from the Zacks Consensus Estimate for 2021 earnings being revised upward over the past 60 days.

However, high operating costs are concerning. The COVID-induced weakness in the industrial sector is also a bane. Further, softness in business-to-business average daily volumes is likely to persist throughout 2021.

(You can read the full research report on United Parcel Service here >>>)

Medtronic shares have outperformed the Zacks Medical – Products industry in the last one-year period (+28.9% vs. +14.8%). In fact, Medtronic’s fourth-quarter fiscal 2021 earnings and revenues both were ahead of the respective Zacks Consensus Estimate. Each operating segment and geography registered strong year-over-year growth on an organic basis. The results reflected a strong recovery from the impact of the COVID-19 pandemic on elective procedures that the company experienced in April 2020.

The Zacks analyst believes that the company is winning shares in an increasing number of its businesses. The quarter’s gross and operating margins showed stupendous improvement. Fiscal 2022 EPS and revenue guidance indicating strong growth buoys optimism.

On the flip side, the company’s performance continued to get dented by deferred procedures due to the pandemic, especially in the emerging markets.

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

Shares of Shopify have underperformed the Zacks Internet – Services industry in the year-to-date period (+12.2% vs. +25.9%). The Zacks analyst believes that higher investments on product development and fulfillment platform amid stiff competition in the e-commerce space are likely to limit margin expansion in the near term.

Nevertheless, Shopify’s first quarter results gained from e-commerce boom induced growth in the merchant base. Increases in buying of essentials due to another COVID-19 wave led stay-at-home wave has transformed digital commerce.

Further, solid adoption of new merchant-friendly applications amid evolving retail environment, holds promise. Additionally, partnerships with TikTok, Walmart and Facebook are expected to expand merchant base, going ahead. Also, initiatives aimed at international expansion are noteworthy.

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

Other noteworthy reports we are featuring today include American Express Company (AXP), Square, Inc. (SQ) and U.S. Bancorp (USB).

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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

Spike in E-commerce & Free Cash Flow Bolster UPS Prospects

Medtronic (MDT) Reports Solid Market Share Gain amid COVID Ail

Product Rollouts & Growing Merchant Base Aid Shopify (SHOP)

Featured Reports

Dermatology Products Fuel Zoetis (ZTS) Amid Competition

Per the Zacks analyst, Zoetis key dermatology products such as Apoquel, Cytopoint and Simparica should maintain growth amid challenges for dairy customers.

APA Buoyed by Cost Reduction Efforts, Kwaskwasi-1 Find

The Zacks analyst likes APA's significant progress in reducing its cost structure and believes that the Kwaskwasi-1 discovery at Block 58 will be a game-changer for the company.

Rising Loans to Support U.S. Bancorp (USB), Rising Costs Ail

Per Zacks analyst, rising loans and deposits, due to U.S. Bancorp's solid business model and initiatives to expand market share, might support growth.

Square (SQ) Banks on Solid Cash App Adoption, Bitcoin Growth

Per the Zacks analyst, Square is benefiting from strong Cash App engagement and its growing active customer base. Further, growing bitcoin revenues owing to robust Cash App are contributing well.

Investment Aids American Electric (AEP), Rate Dependency Hurts

Per the Zacks analyst, it plans to invest $26.6 billion over the 2021-2024 period in regulated operations to boost earnings.

Decline in Expenses to Aid American Express' (AXP) Margins

Per the Zacks analyst, halt in advertising and slowdown in product launches will lower marketing costs and aid margins. A decrease in card member services and rewards will likely help the bottom line.

New Contract Wins Aid MRC Global (MRC), Low Demand Hurts

Per the Zacks analyst, lucrative contract and project wins along with its focus on cash flow generation will be beneficial to MRC Global.

New Upgrades

Acquisitions, Strong Demand Aid Westlake Chemical (WLK)

Per the Zacks analyst, strong demand for polyethylene and polyvinyl chloride resin will drive the company's top line. It should also gain from synergies of Axiall and NAKAN acquisitions. n

Portfolio Expansion & Online Betting Aid Boyd Gaming (BYD)

Per the Zacks analyst, Boyd Gaming is poised to benefit from portfolio expansion and acquisitions. Also, the company's efforts to expand online betting offerings bode well.

Snap-on's (SNA) Commercial & Industrial Group to Aid Growth

Per the Zacks analyst, Snap-on is witnessing strength in its Commercial & Industrial Group, which is likely to continue. Robust sales at the Asia Pacific operations are also aiding segment's growth.

New Downgrades

Tariff on Steel & Aluminum Poses Risk for Aerojet (AJRD)

Per the Zacks analyst, extended tariff for steel and aluminum import by Trump administration might have pushed up the stock's expenses. It faces increased competition from entrepreneurs like SpaceX.

Input Cost Inflation Hurts Kimberly-Clark's (KMB) Profits

Per the Zacks analyst, Kimberly-Clark's first-quarter performance was hurt by higher pulp and other material costs. For 2021, management expects commodity inflation in the band of $900-$1,050 million.

Yandex (YNDX) is Hurt by Sluggishness in Advertising Network

Per the Zacks analyst, softness in the advertising network is a major headwind for the advertising business which is an integral part of Yandex.

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
U.S. Bancorp (USB) : Free Stock Analysis Report
United Parcel Service, Inc. (UPS) : Free Stock Analysis Report
Square, Inc. (SQ) : Free Stock Analysis Report
Shopify Inc. (SHOP) : Free Stock Analysis Report
Medtronic PLC (MDT) : Free Stock Analysis Report
American Express Company (AXP) : Free Stock Analysis Report
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Zacks Investment Research

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