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The Zacks Analyst Blog Highlights Pfizer, Shopify, PG&E, Hess and Datadog
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For Immediate Release
Chicago, IL – August 14, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Pfizer Inc. (PFE - Free Report) , Shopify Inc. (SHOP - Free Report) , PG&E Corp. (PCG - Free Report) , Hess Corp.'s (HES - Free Report) and Datadog Inc. (DDOG - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Buy These 5 Year-to-Date Laggards with Solid Near-Term Upside
U.S. stock markets regained momentum after facing a setback in the first week of August. Prior to that, U.S. stock markets witnessed an impressive 19-month rally. Wall Street's bull run has got an added boost this year, to the surprise of a large section of financial pandits, who indiscriminately warned of overvaluation.
However, the rally was predominantly driven by the technology sector. A massive adoption of the generative artificial intelligence (AI) technology across the world has skyrocketed AI-centric technology giants' valuation. It was only in July 2024, that investors' preferences shifted from stretched valued tech behemoths to beaten-down rate-sensitive cyclical stocks.
Nevertheless, despite the sector rotation several corporate bigwigs remain laggards year to date. Investment in these stocks with a favorable Zacks Rank and the expectation of solid near-term stock price appreciation should be prudent from an investment perspective.
Two Positives
Following the release of a few weak economic data in July, especially the labor market data, the CME FedWatch currently shows a 100% probability of a 25-basis point interest rate cut in September and a 51.5% chance of a 50-basis point rate cut.
For November, market participants estimate a 100% probability that the total (year to date) rate cut will be 50 basis points and a 62.6% probability that the total rate cut will be 75 basis points. Likewise for December, market participants estimate a 100% probability that the total rate cut will be 75 basis points and a 72.4% probability that the total rate cut will be 1% in 2024.
Furthermore, second-quarter 2024 earnings results have come in better than expected so far. As of Aug 9, 456 companies on the S&P 500 Index have reported their financial numbers. Total earnings of these index members are up 9.1% from the same period last year on 5.3% higher revenues, with 79.6% beating EPS estimates and 59% beating revenue estimates.
At present, total earnings of the S&P 500 Index in second-quarter 2024 are expected to be up 9.4% on 5.4% higher revenues. If it materializes, this will be the highest quarterly earnings growth since the first quarter of 2022.
Our Top Picks
We have narrowed our search to five large-cap stocks that have lagged the market year to date. However, these stocks have strong potential for the rest of 2024. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Pfizer Inc. expects better non-COVID operational revenue growth in the future quarters, driven by its in-line products like Vyndaqel and Prevnar, new launches like Abrysvo, Velsipity, Penbraya and newly acquired products, including those acquired from Seagen. Huge profits from its COVID products have strengthened PFE's cash position. The funds are being used to make acquisitions, increase dividends, buy back shares and reduce debt.
PFE has committed significant resources toward the development of treatments in the fields of oncology, internal medicine, rare diseases, immunology, inflammation, vaccines and hospitals. For the near future, PFE has drafted a robust mRNA strategy where it is investing in mRNA technology and collaborations
Pfizer has an expected revenue and earnings growth rate of 5.3% and 39.7%, respectively, for the current year. The average price target of brokerage firms represents an increase of 17.1% from the last closing price of $28.45. The brokerage target price is currently in the range of $27-$45.
Shopify Inc. 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 SHOP to win new merchants regularly. The 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. The expansion of back-office merchant solutions to more countries is also strengthening SHOP's international footprint.
Shopify has an expected revenue and earnings growth rate of 22.2% and 35.1%, respectively, for the current year. The average price target of brokerage firms represents an increase of 12.5% from the last closing price of $68.31. The brokerage target price is currently in the range of $63-$100.
PG&E Corp. boasts a solid portfolio of regulated utility assets that offer a stable earnings base and long-term growth potential. PCG's planned capital expenditure of $62 billion for the 2024-2028 period bodes well for its long-term growth prospects. PCG is also expanding its renewable energy portfolio by enhancing its presence in electric vehicle charging and battery energy storage markets.
PG&E has an expected revenue and earnings growth rate of 4.5% and 9.8%, respectively, for the current year. The average price target of brokerage firms represents an increase of 16% from the last closing price of $18.23. The brokerage target price is currently in the range of $18-$23.
Hess Corp.'s two primary production engines are the Bakken shale and the Stabroek project offshore Guyana. In particular, HES has achieved numerous world-class oil findings in the Stabroek Block, accounting for more than 11 billion barrels of oil equivalent (Boe) in recoverable resources.
Moving onto HES' Bakken shale play, the exploration & production firm possesses numerous premium untapped drilling locations. HES' announced buyout by Chevron is also a great transaction for shareholders, as they realize a premium and become part of a supermajor.
HES has an expected revenue and earnings growth rate of 24.2% and more than 100%, respectively, for the current year. The average price target of brokerage firms represents an increase of 26.2% from the last closing price of $169.64. The brokerage target price is currently in the range of $156-$210.
Datadog Inc. is benefiting from new customer additions and increased adoption of its cloud-based monitoring and analytics platform, driven by accelerated digital transformation and cloud migration across organizations. DDOG's solid adoption of Synthetics and Network Performance Monitoring products is expected to aid customer wins in the near term.
Contributions from a solid cloud partner base, including Google Cloud, Microsoft Azure and Amazon Web Services, remain a key growth driver for DDOG besides an expanding portfolio. Considering the above-mentioned factors, we expect 2024 net sales to increase 22% from 2023.
Datadog has an expected revenue and earnings growth rate of 23.4% and 16.7%, respectively, for the current year. The average price target of brokerage firms represents an increase of 29.2% from the last closing price of $112.16. The brokerage target price is currently in the range of $98-$165.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights Pfizer, Shopify, PG&E, Hess and Datadog
For Immediate Release
Chicago, IL – August 14, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Pfizer Inc. (PFE - Free Report) , Shopify Inc. (SHOP - Free Report) , PG&E Corp. (PCG - Free Report) , Hess Corp.'s (HES - Free Report) and Datadog Inc. (DDOG - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Buy These 5 Year-to-Date Laggards with Solid Near-Term Upside
U.S. stock markets regained momentum after facing a setback in the first week of August. Prior to that, U.S. stock markets witnessed an impressive 19-month rally. Wall Street's bull run has got an added boost this year, to the surprise of a large section of financial pandits, who indiscriminately warned of overvaluation.
However, the rally was predominantly driven by the technology sector. A massive adoption of the generative artificial intelligence (AI) technology across the world has skyrocketed AI-centric technology giants' valuation. It was only in July 2024, that investors' preferences shifted from stretched valued tech behemoths to beaten-down rate-sensitive cyclical stocks.
Nevertheless, despite the sector rotation several corporate bigwigs remain laggards year to date. Investment in these stocks with a favorable Zacks Rank and the expectation of solid near-term stock price appreciation should be prudent from an investment perspective.
Two Positives
Following the release of a few weak economic data in July, especially the labor market data, the CME FedWatch currently shows a 100% probability of a 25-basis point interest rate cut in September and a 51.5% chance of a 50-basis point rate cut.
For November, market participants estimate a 100% probability that the total (year to date) rate cut will be 50 basis points and a 62.6% probability that the total rate cut will be 75 basis points. Likewise for December, market participants estimate a 100% probability that the total rate cut will be 75 basis points and a 72.4% probability that the total rate cut will be 1% in 2024.
Furthermore, second-quarter 2024 earnings results have come in better than expected so far. As of Aug 9, 456 companies on the S&P 500 Index have reported their financial numbers. Total earnings of these index members are up 9.1% from the same period last year on 5.3% higher revenues, with 79.6% beating EPS estimates and 59% beating revenue estimates.
At present, total earnings of the S&P 500 Index in second-quarter 2024 are expected to be up 9.4% on 5.4% higher revenues. If it materializes, this will be the highest quarterly earnings growth since the first quarter of 2022.
Our Top Picks
We have narrowed our search to five large-cap stocks that have lagged the market year to date. However, these stocks have strong potential for the rest of 2024. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Pfizer Inc. expects better non-COVID operational revenue growth in the future quarters, driven by its in-line products like Vyndaqel and Prevnar, new launches like Abrysvo, Velsipity, Penbraya and newly acquired products, including those acquired from Seagen. Huge profits from its COVID products have strengthened PFE's cash position. The funds are being used to make acquisitions, increase dividends, buy back shares and reduce debt.
PFE has committed significant resources toward the development of treatments in the fields of oncology, internal medicine, rare diseases, immunology, inflammation, vaccines and hospitals. For the near future, PFE has drafted a robust mRNA strategy where it is investing in mRNA technology and collaborations
Pfizer has an expected revenue and earnings growth rate of 5.3% and 39.7%, respectively, for the current year. The average price target of brokerage firms represents an increase of 17.1% from the last closing price of $28.45. The brokerage target price is currently in the range of $27-$45.
Shopify Inc. 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 SHOP to win new merchants regularly. The 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. The expansion of back-office merchant solutions to more countries is also strengthening SHOP's international footprint.
Shopify has an expected revenue and earnings growth rate of 22.2% and 35.1%, respectively, for the current year. The average price target of brokerage firms represents an increase of 12.5% from the last closing price of $68.31. The brokerage target price is currently in the range of $63-$100.
PG&E Corp. boasts a solid portfolio of regulated utility assets that offer a stable earnings base and long-term growth potential. PCG's planned capital expenditure of $62 billion for the 2024-2028 period bodes well for its long-term growth prospects. PCG is also expanding its renewable energy portfolio by enhancing its presence in electric vehicle charging and battery energy storage markets.
PG&E has an expected revenue and earnings growth rate of 4.5% and 9.8%, respectively, for the current year. The average price target of brokerage firms represents an increase of 16% from the last closing price of $18.23. The brokerage target price is currently in the range of $18-$23.
Hess Corp.'s two primary production engines are the Bakken shale and the Stabroek project offshore Guyana. In particular, HES has achieved numerous world-class oil findings in the Stabroek Block, accounting for more than 11 billion barrels of oil equivalent (Boe) in recoverable resources.
Moving onto HES' Bakken shale play, the exploration & production firm possesses numerous premium untapped drilling locations. HES' announced buyout by Chevron is also a great transaction for shareholders, as they realize a premium and become part of a supermajor.
HES has an expected revenue and earnings growth rate of 24.2% and more than 100%, respectively, for the current year. The average price target of brokerage firms represents an increase of 26.2% from the last closing price of $169.64. The brokerage target price is currently in the range of $156-$210.
Datadog Inc. is benefiting from new customer additions and increased adoption of its cloud-based monitoring and analytics platform, driven by accelerated digital transformation and cloud migration across organizations. DDOG's solid adoption of Synthetics and Network Performance Monitoring products is expected to aid customer wins in the near term.
Contributions from a solid cloud partner base, including Google Cloud, Microsoft Azure and Amazon Web Services, remain a key growth driver for DDOG besides an expanding portfolio. Considering the above-mentioned factors, we expect 2024 net sales to increase 22% from 2023.
Datadog has an expected revenue and earnings growth rate of 23.4% and 16.7%, respectively, for the current year. The average price target of brokerage firms represents an increase of 29.2% from the last closing price of $112.16. The brokerage target price is currently in the range of $98-$165.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.