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The Zacks Analyst Blog Highlights McDonald's, Danaher, S&P Global, Twin Disc and Cato
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For Immediate Release
Chicago, IL – October 2, 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: McDonald's Corp. (MCD - Free Report) , Danaher Corp. (DHR - Free Report) , S&P Global Inc. (SPGI - Free Report) , Twin Disc, Inc. (TWIN - Free Report) and The Cato Corp. (CATO - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Top Stock Reports for McDonald's, Danaher and S&P Global
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 McDonald's Corp., Danaher Corp. and S&P Global Inc., as well as two micro-cap stocks Twin Disc, Inc. and The Cato Corp. 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 McDonald's have underperformed the Zacks Retail - Restaurants industry over the year-to-date period (+4.5% vs. +6.2%). The company's prospects are marred due to lower global and U.S. comps. McDonald's comps dropped for the first time in the second quarter of 2024 after increasing for 13 straight quarters.
McDonald experienced negative comparable store sales in its internationally operated markets, reflecting broad-based pressure and more cautious spending by customers.
Furthermore, challenges from the ongoing war in the Middle East and reduced consumer confidence in China are concerning. Persisting labor inflation and stiff competition are additional headwinds to the company. Although higher average checks, menu innovation, a loyalty program, and unit expansion are positives, earnings estimates for 2024 have declined in the past 30 days.
Danaher’s shares have outperformed the Zacks Diversified Operations industry over the year-to-date period (+20.6% vs. +3.5%). The company’s stable demand in the clinical and molecular diagnostics businesses is supporting its Diagnostics segment. The segment has been witnessing positive responses toward its new products.
Danaher’s commitment to return value to shareholders is encouraging. Synergies from the Abcam acquisition bolster its growth. Through Danaher’s DBS initiatives, it has been able to reduce the impact of supply-chain constraints and inflationary pressures.
However, the company is plagued by weakness in the Life Sciences and Biotechnology units due to decreased demand across major end markets. An increase in SG&A expenses may affect the margin performance. High debt levels may raise its financial obligations and drain its profitability. Given the company’s international exposure, forex woes are weighing on its top line.
Shares of S&P Global have outperformed the Zacks Business - Information Services industry over the past year (+42.0% vs. +32.5%). The company remains well-poised to gain from the growing demand for business information services. Buyouts help innovate, increase differentiated content and develop products. The latest service launches have been aiding the company's growth.
Dividend payments and share buybacks boost investors' confidence and positively impact earnings per share. A current ratio of more than 1 indicates that the company will be easily paying off its short-term obligations.
On the flip side, S&P Global remains vulnerable to proceedings, investigations and inquiries concerning the ratings provided, leading to legal charges, damages or fines. Growth initiatives, higher compensations and incentives raise the company's expenses.
Twin Disc's shares have underperformed the Zacks Manufacturing - General Industrial industry over the year-to-date period (-22.1% vs. +13.3%). This microcap company with market capitalization of $176.16 million is facing weak industrial demand, rising operational costs, supply chain vulnerabilities, dependence on volatile oil prices, and currency risks could pressure future performance.
Nevertheless, Twin Disc's strategic acquisition of Katsa Oy enhances its product range in power transmission, key to expanding into hybrid and electric marine and industrial solutions. The purchase strengthens its foothold in Europe, driving long-term growth and cross-selling opportunities. The shift toward high-margin products like advanced marine transmissions lifted gross margins to 28.2% in 2024.
Improved operational efficiency in 2024 boosted free cash flow to $25 million. Diversification efforts increased Asia Pacific sales to 28%, reducing over-reliance on North America and amplifying global reach, with overall revenues rising 6.6% to $295.1 million. Despite robust finances, including low net debt and a strong balance sheet, challenges persist.
Shares of Cato Corp’s have underperformed the Zacks Manufacturing - General Industrial industry over the year-to-date period (-22.9% vs. +13.9%). This microcap company with market capitalization of $102.64 million is witnessing challenges persist with an 8% sales decline due to store closures, weak e-commerce performance (less than 5% of total sales) and inflationary pressures affecting consumer spending. Cato’s reliance on physical stores and exposure to economic cycles further heighten risks.
Nevertheless, Cato's strong financial position, with $30.8 million in cash and $69.9 million in working capital, enhances its operational stability and ability to invest in future growth. Improved cost control, with a 7% reduction in SG&A expenses, has bolstered profitability, and net income nearly doubled to $11.1 million for the first half of 2024.
The company's disciplined inventory management minimizes markdown risk, preserving margins. Cato’s consistent dividend payments underscore its financial health. Additionally, it is well-positioned to benefit from expected growth in the global apparel market.
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 McDonald's, Danaher, S&P Global, Twin Disc and Cato
For Immediate Release
Chicago, IL – October 2, 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: McDonald's Corp. (MCD - Free Report) , Danaher Corp. (DHR - Free Report) , S&P Global Inc. (SPGI - Free Report) , Twin Disc, Inc. (TWIN - Free Report) and The Cato Corp. (CATO - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Top Stock Reports for McDonald's, Danaher and S&P Global
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 McDonald's Corp., Danaher Corp. and S&P Global Inc., as well as two micro-cap stocks Twin Disc, Inc. and The Cato Corp. 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 McDonald's have underperformed the Zacks Retail - Restaurants industry over the year-to-date period (+4.5% vs. +6.2%). The company's prospects are marred due to lower global and U.S. comps. McDonald's comps dropped for the first time in the second quarter of 2024 after increasing for 13 straight quarters.
McDonald experienced negative comparable store sales in its internationally operated markets, reflecting broad-based pressure and more cautious spending by customers.
Furthermore, challenges from the ongoing war in the Middle East and reduced consumer confidence in China are concerning. Persisting labor inflation and stiff competition are additional headwinds to the company. Although higher average checks, menu innovation, a loyalty program, and unit expansion are positives, earnings estimates for 2024 have declined in the past 30 days.
(You can read the full research report on McDonald's here >>>)
Danaher’s shares have outperformed the Zacks Diversified Operations industry over the year-to-date period (+20.6% vs. +3.5%). The company’s stable demand in the clinical and molecular diagnostics businesses is supporting its Diagnostics segment. The segment has been witnessing positive responses toward its new products.
Danaher’s commitment to return value to shareholders is encouraging. Synergies from the Abcam acquisition bolster its growth. Through Danaher’s DBS initiatives, it has been able to reduce the impact of supply-chain constraints and inflationary pressures.
However, the company is plagued by weakness in the Life Sciences and Biotechnology units due to decreased demand across major end markets. An increase in SG&A expenses may affect the margin performance. High debt levels may raise its financial obligations and drain its profitability. Given the company’s international exposure, forex woes are weighing on its top line.
(You can read the full research report on Danaher here >>>)
Shares of S&P Global have outperformed the Zacks Business - Information Services industry over the past year (+42.0% vs. +32.5%). The company remains well-poised to gain from the growing demand for business information services. Buyouts help innovate, increase differentiated content and develop products. The latest service launches have been aiding the company's growth.
Dividend payments and share buybacks boost investors' confidence and positively impact earnings per share. A current ratio of more than 1 indicates that the company will be easily paying off its short-term obligations.
On the flip side, S&P Global remains vulnerable to proceedings, investigations and inquiries concerning the ratings provided, leading to legal charges, damages or fines. Growth initiatives, higher compensations and incentives raise the company's expenses.
(You can read the full research report on S&P Global here >>>)
Twin Disc's shares have underperformed the Zacks Manufacturing - General Industrial industry over the year-to-date period (-22.1% vs. +13.3%). This microcap company with market capitalization of $176.16 million is facing weak industrial demand, rising operational costs, supply chain vulnerabilities, dependence on volatile oil prices, and currency risks could pressure future performance.
Nevertheless, Twin Disc's strategic acquisition of Katsa Oy enhances its product range in power transmission, key to expanding into hybrid and electric marine and industrial solutions. The purchase strengthens its foothold in Europe, driving long-term growth and cross-selling opportunities. The shift toward high-margin products like advanced marine transmissions lifted gross margins to 28.2% in 2024.
Improved operational efficiency in 2024 boosted free cash flow to $25 million. Diversification efforts increased Asia Pacific sales to 28%, reducing over-reliance on North America and amplifying global reach, with overall revenues rising 6.6% to $295.1 million. Despite robust finances, including low net debt and a strong balance sheet, challenges persist.
(You can read the full research report on Twin Disc here >>>)
Shares of Cato Corp’s have underperformed the Zacks Manufacturing - General Industrial industry over the year-to-date period (-22.9% vs. +13.9%). This microcap company with market capitalization of $102.64 million is witnessing challenges persist with an 8% sales decline due to store closures, weak e-commerce performance (less than 5% of total sales) and inflationary pressures affecting consumer spending. Cato’s reliance on physical stores and exposure to economic cycles further heighten risks.
Nevertheless, Cato's strong financial position, with $30.8 million in cash and $69.9 million in working capital, enhances its operational stability and ability to invest in future growth. Improved cost control, with a 7% reduction in SG&A expenses, has bolstered profitability, and net income nearly doubled to $11.1 million for the first half of 2024.
The company's disciplined inventory management minimizes markdown risk, preserving margins. Cato’s consistent dividend payments underscore its financial health. Additionally, it is well-positioned to benefit from expected growth in the global apparel market.
(You can read the full research report on The Cato 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.