Wednesday, January 11, 2023

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 JPMorgan Chase & Co. (JPM), Chevron Corp. (CVX) and Salesforce, Inc. (CRM). 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 JPMorgan Chase have outperformed the Zacks Banks - Major Regional industry over the past six months (+22.7% vs. +10.5%). The company’s opening of new branches, strategic acquisitions/investments and global expansion and digitization initiatives will keep driving financials. Higher rates and a steady rise in loan demand will keep bolstering net interest income (NII) growth.

According to Zacks analyst estimates for NII (managed), figures are for a CAGR of 13% over the next three years. However, the volatile nature of the capital markets business and higher mortgage rates are likely to make fee income growth challenging.

Our estimates for managed NII reflect a decline of 11.6% for 2022. Steadily rising operating expenses remain a major headwind, and we expect the same to rise 7% in 2022. Given the possibility of an economic slowdown, the company is expected to keep increasing provisions, with 2022 witnessing a substantial jump.

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

Shares of Chevron have outperformed the Zacks Oil and Gas - Integrated - International industry over the past year (+38.3% vs. +31.7%). The company is considered one of the best-placed global integrated oil firms to achieve sustainable production ramp-up.

America’s No. 2 energy firm’s existing project pipeline is among the best in the industry, thanks to its premier position in the lucrative Permian Basin. As a reflection of these positives, we expect CVX’s EPS to jump 132% in 2022.

However, Chevron was not immune to the commodity price crash of 2020, forcing the company to cut spending substantially. Its high oil price sensitivity is a concern too. Moreover, the supermajor’s 10-year reserve replacement ratio of 100% is indicative of its inability to replace the amount of oil and gas produced.

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

Salesforce shares have underperformed the Zacks Computer - Software industry over the past year (-38.0% vs. -27.0%). The company is facing stiff competition, which is a concern. Unfavorable currency fluctuations, along with increasing investments in international expansions and data centers, are overhangs on near-term profitability.

Nevertheless, Salesforce is benefiting from a robust demand environment, as customers are undergoing a major digital transformation. The rapid adoption of its cloud-based solutions is driving demand for its products. Its sustained focus on introducing more aligned products as per customer needs is driving its top-line.

Continued deal wins in the international market is another growth driver. The acquisition of Slack would position the company to be a leader in enterprise team collaboration solutions and better compete with Microsoft’s Teams product. We expect CRM revenues to grow at a CAGR of 12.5% through fiscal 2023-2025.

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

Other noteworthy reports we are featuring today include SAP SE (SAP), CVS Health Corp. (CVS) and FedEx Corp. (FDX).

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>>>