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The Zacks Analyst Blog Highlights American Express, ServiceNow, RTX and Frequency Electronics
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For Immediate Release
Chicago, IL – August 30, 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: American Express Co. (AXP - Free Report) , ServiceNow, Inc. (NOW - Free Report) , RTX Corp. (RTX - Free Report) and Frequency Electronics, Inc. (FEIM - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
Top Research Reports for American Express, ServiceNow and RTX
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 American Express Co., ServiceNow, Inc. and RTX Corp., as well a micro-cap stocks Frequency Electronics, Inc. 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.
Shares of American Express have outperformed the Zacks Financial - Miscellaneous Services industry over the past year (+63.6% vs. +23.4%). The company’s growth initiatives, like launching new products, reaching new agreements and forging alliances, are boosting its revenues.
Consumer spending on travel and entertainment, which carries higher margins for AmEx, is advancing well. It beat Q2 earnings estimates. Its solid cash-generation abilities enable the pursuit of business investments and prudent deployment of capital via buybacks and dividends.
However, with higher utilization of AXP’s cards, costs in the form of card member services and card member rewards are likely to go up. Rising marketing costs are straining its margins. Its current debt level amid a high-interest rate environment induces a rise in interest expenses. The stock is overvalued at the moment. As such, the stock warrants a cautious stance.
ServiceNow shares have outperformed the Zacks Computers - IT Services industry over the year-to-date period (+19.0% vs. +3.6%). The company has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation.
ServiceNow had 1,988 total customers with more than $1 million in annual contract value (ACV) at the end of second quarter, which represents 15% year-over-year growth in customers. ServiceNow had 14 deals greater than $5 million in net new ACV and four deals of more than $10 million. It closed 88 deals greater than $1 million net new ACV.
Generative AI deals continued to gain traction with net new ACV for Now Assist and was part of 11 deals worth more than $1 million in the reported quarter. It is riding on an expanding partner base. Nevertheless, ServiceNow is suffering from persistent inflation, stiff competition, and a challenging macroeconomic environment.
Shares of RTX have outperformed the Zacks Aerospace - Defense industry over the past year (+44.1% vs. +0.3%). The company ended second-quarter 2024 on a solid note, with both its revenues and earnings having surpassed their respective Zacks Consensus Estimate. It continues to receive ample orders for its wide range of combat-proven defense products.
A steadily recovering commercial air traffic has been bolstering commercial OEM as well as commercial aftermarket sales for the company. RTX holds a solid financial position, which enables it to make successful share repurchases.
However, rising crude prices tends to put cost pressure on airlines that may affect the operating results of commercial OEM producers like RTX. The company may also be affected if China enforces its announced sanctions against its missile and defense unit. Supply-chain challenges also pose a threat to RTX.
Frequency Electronics shares have outperformed the Zacks Instruments - Control industry over the year-to-date period (+41.8% vs. +10.9%). This microcap company with market capitalization of $135.62 million posted strong financial results in FY 2024, with revenue rising 36% to $55.3 million, driven by U.S. Government satellite programs and DOD customers.
Frequency Electronics turned a $5.5 million net loss in FY 2023 into a $5.6 million net income, reflecting robust revenue growth, effective cost management and overcoming technical challenges. A record $78 million backlog ensures revenue visibility and supports business momentum. Positioned strategically in the growing satellite payload market, Frequency Electronics is capitalizing on demand for low and medium Earth orbit satellites.
A debt-free balance sheet with $27 million in working capital provides flexibility for growth, while a $1.00 per share special dividend underscores shareholder value. However, the shift to cost-sensitive contracts pressures margins, and dependence on government contracts adds revenue uncertainty.
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 American Express, ServiceNow, RTX and Frequency Electronics
For Immediate Release
Chicago, IL – August 30, 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: American Express Co. (AXP - Free Report) , ServiceNow, Inc. (NOW - Free Report) , RTX Corp. (RTX - Free Report) and Frequency Electronics, Inc. (FEIM - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
Top Research Reports for American Express, ServiceNow and RTX
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 American Express Co., ServiceNow, Inc. and RTX Corp., as well a micro-cap stocks Frequency Electronics, Inc. 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 American Express have outperformed the Zacks Financial - Miscellaneous Services industry over the past year (+63.6% vs. +23.4%). The company’s growth initiatives, like launching new products, reaching new agreements and forging alliances, are boosting its revenues.
Consumer spending on travel and entertainment, which carries higher margins for AmEx, is advancing well. It beat Q2 earnings estimates. Its solid cash-generation abilities enable the pursuit of business investments and prudent deployment of capital via buybacks and dividends.
However, with higher utilization of AXP’s cards, costs in the form of card member services and card member rewards are likely to go up. Rising marketing costs are straining its margins. Its current debt level amid a high-interest rate environment induces a rise in interest expenses. The stock is overvalued at the moment. As such, the stock warrants a cautious stance.
(You can read the full research report on American Express here >>>)
ServiceNow shares have outperformed the Zacks Computers - IT Services industry over the year-to-date period (+19.0% vs. +3.6%). The company has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation.
ServiceNow had 1,988 total customers with more than $1 million in annual contract value (ACV) at the end of second quarter, which represents 15% year-over-year growth in customers. ServiceNow had 14 deals greater than $5 million in net new ACV and four deals of more than $10 million. It closed 88 deals greater than $1 million net new ACV.
Generative AI deals continued to gain traction with net new ACV for Now Assist and was part of 11 deals worth more than $1 million in the reported quarter. It is riding on an expanding partner base. Nevertheless, ServiceNow is suffering from persistent inflation, stiff competition, and a challenging macroeconomic environment.
(You can read the full research report on ServiceNow here >>>)
Shares of RTX have outperformed the Zacks Aerospace - Defense industry over the past year (+44.1% vs. +0.3%). The company ended second-quarter 2024 on a solid note, with both its revenues and earnings having surpassed their respective Zacks Consensus Estimate. It continues to receive ample orders for its wide range of combat-proven defense products.
A steadily recovering commercial air traffic has been bolstering commercial OEM as well as commercial aftermarket sales for the company. RTX holds a solid financial position, which enables it to make successful share repurchases.
However, rising crude prices tends to put cost pressure on airlines that may affect the operating results of commercial OEM producers like RTX. The company may also be affected if China enforces its announced sanctions against its missile and defense unit. Supply-chain challenges also pose a threat to RTX.
(You can read the full research report on RTX here >>>)
Frequency Electronics shares have outperformed the Zacks Instruments - Control industry over the year-to-date period (+41.8% vs. +10.9%). This microcap company with market capitalization of $135.62 million posted strong financial results in FY 2024, with revenue rising 36% to $55.3 million, driven by U.S. Government satellite programs and DOD customers.
Frequency Electronics turned a $5.5 million net loss in FY 2023 into a $5.6 million net income, reflecting robust revenue growth, effective cost management and overcoming technical challenges. A record $78 million backlog ensures revenue visibility and supports business momentum. Positioned strategically in the growing satellite payload market, Frequency Electronics is capitalizing on demand for low and medium Earth orbit satellites.
A debt-free balance sheet with $27 million in working capital provides flexibility for growth, while a $1.00 per share special dividend underscores shareholder value. However, the shift to cost-sensitive contracts pressures margins, and dependence on government contracts adds revenue uncertainty.
(You can read the full research report on Frequency Electronics here >>>)
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.