Wednesday, December 18, 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), S&P Global Inc. (SPGI) and TotalEnergies SE (TTE), as well as two micro-cap stocks Crown Crafts, Inc. (CRWS) and Friedman Industries, Inc. (FRD). 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 (+86.4% vs. +82.3%). The company is benefiting from its diverse business model that spans multiple segments, channels and formats. The company's strong omnichannel strategy has boosted traffic across physical stores and digital platforms. 

Walmart emphasis on improving delivery services has been successful, contributing to steady grocery market share gains. Upsides like these, along with growth in the advertising business, fueled third-quarter fiscal 2025 results, wherein the top and bottom lines grew year over year, and e-commerce sales surged. 

However, Walmart is experiencing adverse currency movements and margin pressures from shifts in product mix. While raising its fiscal 2025 guidance, the company’s implied fourth-quarter view for revenues and operating income reflects a slowdown from the reported third-quarter figures.

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

Shares of S&P Global have gained +15.6% over the past year against the Zacks Business - Information Services industry’s gain of +20.2%. The company remains well-poised to gain from the growing demand for business information services. Buyouts help innovate, increase differentiated content and develop products. The latest service launches have been aiding the company's growth. 

Dividend payments and share buybacks boost investors' confidence and positively impact earnings per share. Increasing current ratio is a good sign for the company liquidity position. 

On the flip side, S&P Global remains vulnerable to proceedings, investigations and inquiries concerning the ratings provided, leading to legal charges, damages or fines. Growth initiatives, higher compensations and incentives raise the company's expenses. The stock has declined 4.4% in three months and we have a Neutral recommendation on it in anticipation of a halt in correction.

(You can read the full research report on S&P Global here >>>)

TotalEnergies’ shares have underperformed the Zacks Oil and Gas - Refining and Marketing industry over the past year (-17.2% vs. -15.5%). The company’s production might be impacted by security reasons in some regions and it remains exposed to acquisition-related risks as these assets contribute a sizable volume to production. A natural decline in production and its withdrawal from Russia will affect profitability.

Nevertheless, TotalEnergies’ benefits from contribution coming from startups, acquisitions, well-spread LNG assets and upstream assets located in the new hydrocarbon-producing regions. Multi-energy assets of the company spread across the globe, support its operation and allow to increase the value of shareholders. 

TotalEnergies is benifiting from cost reduction initiatives. The company is investing in clean power generation and aims to achieve net-zero emissions by 2050. In the month to date period, shares of the company have outperformed its industry.

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

Shares of Crown Crafts have underperformed the Zacks Textile - Home Furnishing industry over the past year (-4.0% vs. +26.7%). This microcap company with market capitalization of $47.1 million is facing heavy customer concentration which poses revenue risks while rising inventory levels and macroeconomic sensitivity expose liquidity pressures. Reliance on China for sourcing increases tariff and supply chain risks. Weak legacy sales signal challenges despite expanding retail channels and strong licensing opportunities.

Nevertheless, Crown Crafts’ Baby Boom buyout contributed $3.4 million to second-quarter fiscal 2025 sales and boosted the bedding and diaper bag segment by 22.7% year over year. Management projects an annualized $20 million revenue run rate, with synergies driving growth and cost efficiencies.

Gross margins improved to 28.4%, aided by Baby Boom’s higher-margin offerings, but elevated operating expenses remain a concern. Despite a manageable debt structure, long-term debt surged to $18.8 million, with interest expenses up 112.2% year over year.

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

Friedman Industries’ shares have underperformed the Zacks Metal Products - Procurement and Fabrication industry over the past year (-3.4% vs. +43.9%). This microcap company with market capitalization of $108.68 million is witnessing pricing and volume challenges in tubular segment, but benefits from steady demand. Rising costs, operational downtime, macroeconomic uncertainty and elevated debt and interest expenses present near-term risks.

However, Friedman Industries maintains a solid financial position, reducing debt by 22% in second-quarter fiscal 2025 to $35.9 million while generating $10.8 million in operating cash flow and holding $111.7 million in working capital. 

The flat-roll segment, which contributed $97.4 million in revenues, showcased resilience amid hot-rolled coil (HRC) price volatility, supported by proactive hedging strategies, though reduced hedging leaves the company vulnerable. Recent cost optimizations, including a 16.8% year-over-year reduction in selling, general and administrative (SG&A) expenses, enhance operational efficiency.

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

Other noteworthy reports we are featuring today include The Allstate Corp. (ALL), Eni S.p.A. (E) and Cloudflare, Inc. (NET).

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>>>