Thursday, March 14, 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 Alphabet Inc. (GOOGL), McDonald's Corporation (MCD) and RTX Corporation (RTX). 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 Alphabet have gained +51.2% over the past year, in-line with the Zacks Tech sector’s gain of +51.5%, but significantly better than the S&P 500 index's +31.9% gain. The company’s robust cloud division is aiding substantial revenue growth. Expanding data centers will continue to bolster its presence in the cloud space. Further, major updates in its search segment are enhancing the search results.

Moreover, Google’s mobile search is gaining solid momentum. Additionally, strong focus on bolstering generative AI capabilities should aid business growth in the near term. Alphabet’s deepening focus on wearables category remains a tailwind.

Alphabet’s strong efforts to gain foothold in the healthcare industry are other positives. Also, its expanding presence in the autonomous driving space is contributing well. However, sluggish Network advertisement business is a negative. Increasing litigation issues and expenses remain concerns.

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

McDonald's shares have gained +8.6% over the past year against the Zacks Retail - Restaurants industry’s gain of +11.6%. The company is likely to benefit from strong comps performance, marketing campaigns and a loyalty program. During fourth-quarter 2023, McDonald's U.K. solidified its position as a go-to destination for quality food at exceptional value, thus, boosting customer loyalty.

McDonald's is also increasing its focus on menu innovation, as it believes that the strengthening of the core menu and solid marketing are likely to pave the way for additional growth in the upcoming periods. Also, the focus on Accelerating the Arches strategy bodes well.

Earnings estimates for 2024 have increased in the past 30 days, depicting analysts’ optimism about the stock’s growth potential. Yet, macroeconomic challenges and commodity and wage inflation are primary headwinds.

(You can read the full research report on McDonald’s here >>>)

Shares of RTX have outperformed the Zacks Aerospace - Defense industry over the past six months (+21.1% vs. +12.2%). The company continues to receive ample orders from the Pentagon and its foreign allies for its wide range of combat-proven defense products.

A steadily recovering commercial air traffic, both domestic and international, is expected to bolster commercial OEM as well as commercial aftermarket sales for the company. RTX holds a solid financial position which should enable it to make successful share repurchase.

However, the appreciating U.S. dollar has been burdening airlines, which may hurt the stock. Also, as rising crude price tends to put cost pressure on airlines, operating results of commercial OEM producers like RTX may be impacted. The company might also be affected if China enforces its announced sanctions against RTX’s missile and defense unit.

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

Other noteworthy reports we are featuring today include The Progressive Corporation (PGR), Southern Copper Corporation (SCCO) and Phillips 66 (PSX).

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>>>