Friday, July 7, 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 BHP Group Limited (BHP), AstraZeneca PLC (AZN) and The Boeing Company (BA). 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 BHP Group have outperformed the Zacks Mining - Miscellaneous industry over the past year (+19.1% vs. +6.3%) as the company's leverage to the prospect of Chinese fiscal stimulus through its iron ore production outlook.

The company’s iron ore production guidance for fiscal 2023 is 249-260 Mt, indicating 1% year-over-year growth at the midpoint. Iron ore prices had earlier lost steam on weak demand in China due to the slump in property investment while supply prospects remained strong.

However, the possibility that the Chinese government will provide stimulus measures for its construction sector has helped lift up iron ore prices lately. Going forward, iron ore prices are expected to be supported by demand in the automotive sector, infrastructure and housing market.

Copper and nickel prices will also be fueled by growing demand for electric vehicles.  BHP’s investment in growth projects with focus on commodities like copper, nickel and potash will aid growth. Its efforts to make operations more efficient through technology adoption will drive earnings.

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

AstraZeneca shares have underperformed the Zacks Large Cap Pharmaceuticals industry over the past year (-0.4% vs. +8.6%). The company’s diabetes franchise faces stiff competition while pricing pressure hurts sales in the respiratory unit. Sales are slowing down in its key market, China. Estimate movements have been mixed ahead of Q2 results.

Nevertheless, AstraZeneca has reported impressive earnings surprise in recent quarters. Its key drugs, mainly cancer medicines, Lynparza, Tagrisso and Imfinzi should keep driving revenues. Its pipeline is strong with several phase III data readouts lined up for 2023.

It has also been engaged in external acquisitions and strategic collaborations to boost its pipeline while investing in geographic areas of high growth like emerging markets. Cost-cutting efforts should drive earnings. The Alexion buyout strengthened its immunology franchise, adding several drugs that are boosting its top line.

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

Shares of Boeing have outperformed the Zacks Aerospace - Defense industry over the past year (+53.2% vs. +0.7%). The company remains the largest aircraft manufacturer in the United States, in terms of revenues, orders and deliveries. Lately, the company has been witnessing a solid recovery in its commercial business.

During the first quarter, the company booked 107 net commercial airplane orders. The U.S. government’s inclination toward strengthening the nation’s defense system should also boost Boeing’s growth. The company holds a strong solvency position in the near term.

However, its 737 MAX program remains a cause of concern in China, thereby impacting its expectation of delivery timing and future gradual production rate increases. Boeing continues to incur notable abnormal production cost in relation to production quality issues for 787 jets, which may hurt its future results.

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

Other noteworthy reports we are featuring today include Diageo plc (DEO), Arthur J. Gallagher & Co. (AJG) and General Mills, Inc. (GIS).

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>>>