Monday, June 6, 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 NextEra Energy, Inc. (NEE), BP p.l.c. (BP) and Gilead Sciences, Inc. (GILD), as well as two micro-cap stocks Hamilton Beach Brands Holding Company (HBB) and FONAR Corporation (FONR). 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 >>>

NextEra Energy shares have outperformed the Zacks Utility - Electric Power industry over the past six months (+37.0% vs. +5.2%). The company continues to expand its operations through organic projects and acquisitions. The company will add more renewable projects in its portfolio and has nearly 21.5 GW of renewable projects in its backlog.

Efficient cost management is boosting the company's margins. Florida’s improving economy boosts the company’s subsidiary FPL’s customer base. NextEra Energy is managing its debts efficiently and has ample liquidity to meet its debt obligations.

However, due to the nature of NextEra Energy’s business, it is subject to complex rules and regulations. Risks in operating nuclear power-based generation units, unfavorable weather conditions, still-high interest rates and increasing supply costs can dversely impact earnings.

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

Shares of BP have gained +10.2% over the past year against the Zacks Oil and Gas - Integrated - International industry’s gain of +15.5%. The company has a strong portfolio of upstream projects, supporting notable growth in production. The integrated energy company exhibits robust upstream growth with the start-up of major projects like Seagull, which boosts its production capacity.

Diversification into renewables through the Lightsource BP acquisition supports long-term sustainability amid energy transitions. The divestment strategy aims to reach $25 billion by 2025, enhancing the balance sheet and returning capital to shareholders.

However, a high debt-to-capitalization ratio raises financial flexibility and balance sheet concerns. Also, despite resolving significant litigation expenses from the 2010 oil spill, BP had to sell valuable assets. These divestitures could potentially limit future cash generation. Refining margins may face pressure due to narrower crude differentials.

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

Gilead have underperformed the Zacks Medical - Biomedical and Genetics industry over the past year (-14.3% vs. -9.5%). The company’s recent pipeline setbacks weigh on Gilead. Gaining incremental market share is likely to be a daunting task due to the competition in the HIV market and the saturated oncology space.

Nevertheless, Gilead’s flagship HIV therapy, Biktarvy, continues to maintain its strong growth, thereby fueling the top line. The approval of new therapies has boosted its market-leading HIV franchise. Our estimates for Biktarvy indicate a CAGR of around 5.8% over the next three years, driven by continued market growth.

Substantial growth in Yescarta and Tecartus and the strong uptake of Trodelvy have strengthened its oncology franchise. The company’s efforts to bolster its oncology and virology franchise through internal pipeline development and strategic collaborations are encouraging.

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

Shares of Hamilton Beach have outperformed the Zacks Household Appliances industry over the past year (+104.2% vs. -23.2%). This microcap company with market capitalization of $270.90 million has diversified its product portfolio with a focus on innovation and energy efficiency, marketing well-known brands and expanding into health technology.

Financially, HBB has improved its position by reducing debt from $79.3 million to $50 million. The gross profit margin rose significantly to 23.4% in first-quarter 2024, driven by cost efficiencies and favorable product mixes. HBB's recent dividend increase to 11.5 cents per share demonstrates its commitment to shareholder value.

However, revenue growth remained unchanged year over year due to pricing pressures and competitive markets. Supply-chain risks, supplier concentration in China and a centralized distribution strategy expose HBB to operational disruptions. Selling and administrative expenses have risen primarily due to new ventures and higher employee costs.

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

FONAR’s have underperformed the Zacks Medical - Products industry over the past year (-9.8% vs. +3.5%). This microcap company with market capitalization of $98.66 million is witnessing rising SG&A expenses and decreased cash flow from operations signal potential operational challenges. Increased competition, reliance on HMCA and regulatory risks are key concerns.

Despite economic uncertainties and limited revenue diversification, FONAR’s legacy in MRI technology and continued R&D investment provide a solid foundation for future growth. Inventory management issues and sector-specific vulnerabilities persist.

Nevertheless, FONAR has shown strong financial performance for the nine months ending Mar 31, 2024, with total revenues up 5.6% and net income rising 25.3%, reflecting effective cost management. Adoption of SwiftMR technology positions FONAR competitively. Strategic expansion, a robust balance sheet, and a diversified revenue stream strengthen its market position.

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

Other noteworthy reports we are featuring today include CME Group Inc. (CME), Parker-Hannifin Corporation (PH) and Crown Castle Inc. (CCI).

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>>>