Wednesday, April 19, 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 Tesla, Inc. (TSLA), Oracle Corporation (ORCL) and Union Pacific Corporation (UNP). 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 >>>

Tesla shares have outperformed the Zacks Automotive - Domestic industry over the year-to-date period (+49.6% vs. +22.8%), reflecting the company's solid long-term growth prospects despite growing competition in the space. The electric vehicle (EV) king is set to benefit from the soaring popularity of its Models 3 and Y.

The Zacks analyst expect deliveries to see an annualized growth of around 33% in 2023. Production ramp-up at gigafactory 4 (in Berlin) and 5 (in Austin) and introduction of new models, including Semi and Cybertruck, are set to support long-term deliveries growth.

Additionally, Tesla’s energy generation and storage revenues outlook is promising. Falling debt levels is another positive. While inflation and economic concerns could pose near-term challenges, we expect Tesla to deliver outsized returns in the long run on the back of output ramp-up and introduction of new models.

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

Shares of Oracle have outperformed the Zacks Computer - Software industry over the past year (+22.3% vs. +3.2%). The company is benefiting from the ongoing momentum across its cloud business, driven by the strong uptake of Oracle Cloud Infrastructure services and Autonomous Database offerings. Solid adoption of cloud-based applications, comprising NetSuite Enterprise Resource Planning (ERP), Fusion ERP and Fusion Human Capital Management (HCM), bodes well.

Solid demand for the Oracle Dedicated Region Cloud@Customer is anticipated to drive the top line. Partnerships with Accenture and Microsoft is helping Oracle win new clientele. The company’s share buybacks and dividend policy are noteworthy.

However, higher spending on product enhancements, especially toward the cloud platform, amid increasing competition in the cloud domain is likely to limit margin expansion. We expect fiscal 2023 non-GAAP operating expenses to jump 14.1% over fiscal 2022.

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

Shares of Union Pacific have gained +8.3% over the past six months against the Zacks Transportation - Rail industry’s gain of +11.2%. The company’s efforts to reward its shareholders even in the current uncertain scenario please us. The company hiked dividend twice in 2021. In May 2022, UNP further upped its quarterly dividend by 10%.

The railroad operator is also active on the buyback front. In 2022, UNP bought back shares worth $6,282 million. The railroad operator paid dividends worth $3,159 million in 2022. UNP's strong free cash flow generating ability supports its shareholder-friendly activities. The uptick in overall volumes (up 2% year over year in 2002) as labor woes ease is an added positive.

However, escalation in fuel costs as oil prices move north is a worry. This phenomenon induced a 20% rise in operating expenses in 2022. Fuel costs surged 68% last year. The same is likely to have been high in the March quarter too.

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

Other noteworthy reports we are featuring today include ServiceNow, Inc. (NOW), The Estée Lauder Companies Inc. (EL) and Intercontinental Exchange, Inc. (ICE).

Director of Research

Sheraz Mian

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>>>