Tuesday, October 8, 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 JPMorgan Chase & Co. (JPM), Medtronic plc (MDT) and Shopify Inc. (SHOP), as well as a micro-cap stock Perma-Pipe International Holdings, Inc. (PPIH). 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 JPMorgan Chase have outperformed the Zacks Banks - Major Regional industry over the year-to-date period (+26.9% vs. +22.9%). Relatively high interest rates, strategic buyouts, opening branches and solid loan balance will support net interest income (NII), though elevated funding costs will weigh on it.

According to the Zacks analyst estimates for NII (managed) and loans imply a CAGR of 1% and 4.7%, respectively, by 2026. While there has been a resurgence in deal-making activities, a complete revival will still take some time. Hence, the performance of the IB business is not expected to improve much.

The volatile nature of the capital markets business and high mortgage rates will likely hurt fee income growth. Owing to these challenges, we expect non-interest income (managed) to rise in 2024 but decline next year. Mounting operating expenses will hamper the bottom line. We expect total non-interest expenses to rise 5.9% in 2024.

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

Medtronic’s shares have gained +8.3% over the year-to-date period against the Zacks Medical - Products industry’s gain of +12.0%. The company is strategically expanding its global presence to address the unmet demand for advanced medical devices. Within Cardiovascular, Medtronic is gaining market share, banking on product launches in CRM and Structural Heart.

Hypertension has brought up multibillion-dollar opportunities for MDT. In MedSurg, Medtronic is scaling the production of Hugo RAS. The Surgical and Neuroscience portfolios continues to contribute positively.

Further, the company’s Pacing business continued to drive strong growth banking on strong global growth of its Micra leadless pacemaker. Innovations and market expansion efforts are helping it offset the impact of the inflation and supply disruptions.Medtronic’s strong liquidity position should allow it to meet its near-term debt obligations. All these factors support our bullish stance on the stock.

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

Shares of Shopify have gained +3.8% over the year-to-date period against the Zacks Internet - Services industry’s gain of +15.7%. The company is benefiting from strong growth in its merchant base. New merchant-friendly tools like Bill Pay, Tax Platform, Collective and the Marketplace Connect app are helping it to win new merchants regularly.

Strong adoption of these solutions holds promise for Shopify’s prospects. Integration of Shop Pay Installments into the point-of-sale terminal and general availability of Pro makes it easier for merchants to discover and engage their customers. Expansion of back-office merchant solutions to more countries is also strengthening Shopify’s international footprint.

An expanding partner base that includes TikTok, Snap, Pinterest, Criteo, IBM, Cognizant, Amazon, and Adayen are expected to expand its merchant base further. However, persistent inflation and cautious consumer spending are headwinds.

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

Perma-Pipe International’s shares have outperformed the Zacks Steel - Pipe and Tube industry over the year-to-date period (+67.7% vs. +5.2%). This microcap company with market capitalization of $106.18 million has demonstrated solid financial growth in 2024, with net sales rising 11% to $71.8 million and gross profit up to $24 million, supported by increased volumes and a favorable product mix.

The company’s backlog signals strong future revenue potential. Strategic expansions position it to capitalize on high-growth sectors like oil & gas and petrochemicals. Technological innovation, particularly the XTRU-THERM insulation system, provides a competitive edge, securing contracts in key markets. Financially, Perma-Pipe's improved cash reserves and liquidity position it well for future growth, though rising debt and high interest costs pose challenges.

However, project delays in the Middle East, foreign currency risks and geographic exposure to volatile regions could impact profitability. Heavy reliance on the oil and gas sector also creates revenue concentration risks.

(You can read the full research report on Perma-Pipe International here >>>)

Other noteworthy reports we are featuring today include Mondelez International, Inc. (MDLZ), Westport Fuel Systems Inc. (WPRT) and FedEx Corp. (FDX).

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>>>