Thursday, October 3, 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 Exxon Mobil Corp. (XOM), Mastercard Inc. (MA) and The Procter & Gamble Co. (PG), as well a micro-cap stock, Vaso Corp. (VASO). 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 >>>

Exxon Mobil’s shares have outperformed the Zacks Oil and Gas - Integrated - International industry over the past year (+8.2% vs. +2.9%). The company being a reliable player in the energy sector, boasts a resilient capital structure, a robust balance sheet and track record of prudent capex management. Its strategic discoveries in the Stabroek Block and Permian Basin promise growth and lower greenhouse gas intensity.

ExxonMobil prioritizes shareholder returns, evidenced by substantial share buybacks. ExxonMobil’s entry into the lithium market positions it for long-term gains as the demand for lithium is poised to increase with the growing adoption of electric vehicles.

However, challenges loom, notably in the upstream operations, which are susceptible to volatile oil prices and regulatory hurdles. Increasing societal focus on environmental risks and climate change pose a threat to its traditional oil & gas business. Further, exposure to OPEC production cuts adds to uncertainties.

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

Shares of Mastercard have outperformed the Zacks Financial Transaction Services industry over the past year (+27.4% vs. +26%). The company’s numerous acquisitions are helping it to grow addressable markets and drive new revenue streams. The accelerated adoption of digital and contactless solutions is providing an opportunity for its business to expedite its shift to the digital mode.

MA's strong cash flow supports its growth initiatives and enables shareholder value-boosting efforts through share repurchases and dividends. However, steep operating expenses might stress its margins. The Zacks analyst expects adjusted operating expenses to jump more than 10% year over year in 2024.

High rebates and incentives may weigh on net revenues. We expect it to be higher than 50% of the payments network gross revenue in 2024. Also, it is overvalued than the industry at current levels. As such, the stock warrants a cautious stance.

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

Procter & Gamble’s shares have gained +19.7% over the past year against the Zacks Soap and Cleaning Materials industry’s gain of +26.9%. The company has been gaining from a strategy that focuses on sustainability and adaptability, responding to the evolving demands of consumers, customers and society.

Procter & Gamble has been focused on productivity and cost-saving plans to boost margins. This led to the bottom line beating the consensus mark for the eighth consecutive quarter in fourth-quarter fiscal 2024. PG provided an optimistic view for fiscal 2025. PG estimates all-in sales to increase 2-4% year over year in fiscal 2025.

However, PG has been witnessing headwinds related to the market issues in Greater China, geopolitical tensions, and financial impacts from currency volatility. PG’s fiscal 2025 EPS view includes an after-tax headwind of $500 million related to unfavorable commodity costs and adverse currency.

(You can read the full research report on Procter & Gamble here >>>)

Shares of Vaso have underperformed the Zacks Medical - Instruments industry over the past year (-45.7% vs. +22.5%). This microcap company with market capitalization of $33.30 million is facing declining equipment sales in China and the United States, creating headwinds. Additionally, dependence on GE Healthcare and increasing competition in the IT sector pose risks.

Nevertheless, Vaso’s future growth is supported by $31.7 million in deferred revenues and a $39.4 million backlog in its IT segment, providing strong revenue visibility for the second half of 2024. The growing managed IT services business, particularly in healthcare, supports stable recurring income.

Positive cash flow of $2.8 million in second-quarter 2024 and $25.7 million in cash underscore solid liquidity. Diversified revenue streams across IT services, professional sales, and medical device manufacturing reduce risk, though rising selling, general, and administrative (SG&A) costs and narrow margins pose challenges.

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

Other noteworthy reports we are featuring today include Eli Lilly and Co. (LLY), RTX Corp. (RTX) and Fiserv, Inc. (FI).

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>>>