Tuesday, February 16, 2021

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features the Q4 earnings season scorecard, in addition to new research reports on 16 major stocks, including Mastercard (MA), Lowe's Companies (LOW) and Uber Technologies (UBER). 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 >>>

Q4 Earnings Season Scorecard (as of February 16th, 2021)

For the 280 S&P 500 members or 76% of the index's total membership that have reported Q4 results already, total earnings are up +4.3% from the same period last year on +3% higher revenues, with 80.3% beating EPS estimates and 77.9% beating revenue estimates.

This is a notably better showing relative to what we saw from this same group of companies in the first three quarters of 2020.

Looking at Q4 as a whole, combining the actuals that have come out with estimates for the still-to-come companies, total earnings are on track to be up +2.8% from the same period last year on +2.7% higher revenues, the first quarterly earnings growth after three back-to-back quarters of declines.

As we have been pointing out all along, the tone and substance of management guidance and commentary remains positive, which is helping estimates for the current period (2021 Q1) to go up. Total 2021 Q1 earnings for the S&P 500 index are currently expected to be up +17.8% from the same period last year on +4.8% higher revenues. The Q1 earnings growth 

Mastercard shares have underperformed the Zacks Financial Transaction Services industry in the year to date period (-4.4% vs. -3.8%). The Zacks analyst believes that the company is gaining from solid demand for digital and contactless solutions amid the COVID crisis.

Investment in technology keeps it at the forefront of the rapidly-evolving payments industry. It is well poised to gain from consistent cash generating abilities from operations backed by its growing business volumes. The company’s strong capital position drives investment in business and shareholder value addition.

However, steep costs might stress margins. Its cross-border volumes will remain suppressed due to COVID-19 restriction on travel and entertainment. Its third-quarter earnings missed estimates.

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

Shares of Lowe's have gained +11.8% in the last six months against the Zacks Building Products - Retail industry’s gain of +1%. The Zacks analyst believes that prudent measures to widen assortments and omni-channel capabilities have helped Lowe’s to emerge into a strong player.

Its latest Total Home strategy targets to provide everything that homeowners need for renovation and remodeling work in every area of the house. The offerings are likely to benefit both Pro and DIY (do-it-yourself) customers.

However, higher operating expenses related to the pandemic and expansion of supply chain infrastructures is likely to put pressure on the company’s fourth-quarter performance. Also, sales growth in the fourth quarter is expected to moderate sequentially.

(You can read the full research report on Lowe's here >>>)

Uber’s shares have gained +24.1% over the past three months against the Zacks Internet Services industry’s rise of +17%. The Zacks analyst believes that Uber’s delivery business is witnessing a boom with online order volumes from homebound customers surging.

Furthermore, the acquisition of Postmates, which expands its delivery unit, provides a further boost. Additionally, the company has entered into a deal to acquire alcohol delivery startup Drizly for $1.1 billion. The acquisition is expected to close within the first half of 2021.

However, significant downturn in the Mobility business is concerning. Although ride volumes have improved from the April 2020 lows, it is way below 2019 levels. Ride volumes are especially low in the United States and Canada, and the Europe, the Middle East and Africa region.

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

Other noteworthy reports we are featuring today include Honda Motor (HMC), Ericsson (ERIC) and Walgreens Boots Alliance (WBA).

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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>>>