Tuesday, May 28, 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 The Walt Disney Company (DIS), The Charles Schwab Corporation (SCHW) and Synopsys, Inc. (SNPS), as well as a micro-cap stocks HF Foods Group Inc. (HFFG).  The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.

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 Walt Disney have outperformed the Zacks Media Conglomerates industry over the past year (+15.6% vs. +10.1%). The company’s second-quarter fiscal 2024 results reflect growth in Disney+ subscribers and theme park and resort businesses. Attractions like the Frozen theme land at Hong Kong Disneyland and the Zootopia theme land at Shanghai Disney, are expected to boost the prospects of the theme park business in th near term.

Disney’s declining ad revenues due to fewer impressions has been a headwind for some time now. Disney+’s profitability is expected to be negatively impacted by higher investments in content, which will increase programming and production costs for Media and Entertainment Distribution.

Its leveraged balance sheet remains a concern. Disney+ is facing tough competition in the streaming market from the likes of Netflix and Amazon Prime Video.

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

Shares of Charles Schwab have gained +22.1% over the past six months against the Zacks Financial - Investment Bank industry’s gain of +32.3%. The company’s first-quarter 2024 results were aided by robust asset management performance.

Acquisitions, which are earnings accretive, have reinforced Schwab’s position as a leading brokerage player. Amid high interest rates, margins will likely grow, but rising funding costs might weigh on it.

As the company keeps investing to bolster business efficiency, operating costs will be elevated. Buyouts and rising compensation costs will also result in higher costs. Its trading revenues will be under pressure amid uncertain market conditions.

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

Synopsys’ shares have outperformed the Zacks Computer - Software industry over the year-to-date period (+14.1% vs. +10.8%). The company is benefiting from solid design wins due to a robust product portfolio. Growth in the hybrid working trend is driving demand for bandwidth. Strong traction for Synopsys’ Fusion Compiler product is boosting its top line.

The growing demand for advanced technology, design, IP and security solutions is also creating solid prospects. The rising impact of artificial intelligence, 5G, the Internet of Things and big data is driving investments in new compute and machine learning architectures.

However, tightening corporate budget amid ongoing macroeconomic challenges, along with unfavorable currency exchange rates and stiff competition, might hurt its near-term growth prospects. Geopolitical challenges and restrictions over trade with Huawei are other woes.

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

Shares of HF Foods have underperformed the Zacks Food - Miscellaneous industry over the past year (-8.3% vs. -3.9%). This microcap company with market capitalization of $176.25 million is facing challenges which includes high debt levels, low net profit margins, declining cash flow, and inventory management issues. Dependence on the Asian restaurant market, exposure to interest rate fluctuations, and geopolitical risks pose concerns.

The impact of exiting the chicken processing business and the risks associated with transformation initiatives persist. Nevertheless, HF Foods’ revenues increased 0.6% year over year in first-quarter 2024 despite exiting its chicken processing business in 2023. Profitability improved significantly, with net loss narrowing and adjusted EBITDA increasing.

Cost control measures, such as centralized purchasing, fleet enhancements, and digital transformation, are driving efficiencies. With a strong liquidity position, HF Foods is well-positioned for strategic mergers and acquisitions (M&A) to expand its footprint.

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

Other noteworthy reports we are featuring today include Waste Management, Inc. (WM), Northrop Grumman Corporation (NOC) and PulteGroup, Inc. (PHM).

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>>>