Thursday, August 1, 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 Walmart Inc. (WMT), McDonald's Corp. (MCD) and Booking Holdings Inc. (BKNG), as well a microcap stock Oil-Dri Corp. of America (ODC). 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 >>>

Walmart’s shares have outperformed the Zacks Retail - Supermarkets industry over the past year (+77.0% vs. +46.8%). The company is gaining from its highly diversified business with contributions from various segments, channels and formats. The company's robust omnichannel initiatives have driven increased traffic in both in-store and digital channels. 

Walmart’s strategic focus on enhancing delivery services has been particularly rewarding, leading to a consistent rise in market share for groceries. Upsides like these, along with growth in the advertising business, fueled Walmart’s first-quarter results, wherein the top and bottom lines increased year over year, and e-commerce penetration grew across all markets. 

Management has raised its fiscal 2025 guidance. However, the retail landscape continues to be dynamic due to challenges like inflation and volatile consumer spending. High operating expenses are also a concern.

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

Shares of McDonald's have declined -2.8% over the past three months against the Zacks Retail - Restaurants industry’s decline of -4.6%. The company’s top and the bottom line declined on a year-over-year basis due to lower global and U.S. comps. The company’s comps dropped for the first time after increasing in 13 straight quarters. Also, high costs and stiff competition are potent headwinds. 

However, higher average checks, thanks to strategic menu price increases somewhat balanced the downside. The company is likely to benefit from menu innovation, a loyalty program and unit expansion. 

It believes that the strengthening of the core menu and solid marketing are likely to pave the way for additional growth in the upcoming periods. 

(You can read the full research report on McDonald’s here >>>)

Booking Holdings' shares have gained +4.7% over the year-to-date period against the Zacks Internet - Commerce industry’s gain of +16.6%. The company is benefiting from a favorable travel demand environment, owing to the growing demand for global leisure travel demand. 

Substantial improvement in its booking trends remains a major tailwind. Solid momentum in booked room nights is contributing well to the gross bookings growth. Strong growth in rental car and airline ticket units is a major positive. Also, strong momentum across the merchant, and advertising and other businesses are other positives. 

The growing alternative accommodation business and flight capabilities are tailwinds for the company. However, the declining trend in agency bookings is negatively affecting its top-line growth. Also, geopolitical tensions in the Middle East region remained concerning for the company.

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

Shares of Oil-Dri Corporation of America have outperformed the Zacks Chemical - Diversified industry over the past year (+2.3% vs. -8.1%). This microcap company with market capitalization of $474.34 million have acquired Ultra Pet Company on May 2024, which is strengthens its position in the high-growth crystal cat litter segment and is expected to boost earnings. 

ODC’s third-quarter fiscal 2024 sales reached $106.8 million, marking 12 consecutive quarters of year-over-year growth. The company increased its dividend 7% for the 21st consecutive year. Product launches like Cat’s Pride Antibacterial Clumping Litter enhance its competitive edge. 

Yet, SG&A expenses grew 51% year over year in third-quarter fiscal 2024, reducing operating income 28%. Agricultural and animal health product sales fell 24% and 17% year over year, respectively. ODC's heavy reliance on Walmart for a significant portion of its sales makes its revenues vulnerable to volatility. High advertising costs impacted the company's profitability.

(You can read the full research report on Ori-Dri Corporation of America here >>>)

Other noteworthy reports we are featuring today include Equinor ASA (EQNR), Centene Corp. (CNC) and Equifax Inc. (EFX).

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>>>