Friday, December 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 Berkshire Hathaway Inc. (BRK.B), Exxon Mobil Corporation (XOM) and Novo Nordisk A/S (NVO), as well as a micro-cap stock, Universal Health Realty Income Trust (UHT). These research reports have been hand-picked from roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Berkshire Hathaway shares have outperformed the Zacks Finance sector (+31.7% vs. +23.4%) as well as the S&P 500 index (+31.7% vs. +27.5%) in the year-to-date period. The Zacks analyst believes that continued insurance business growth fuels float gains and driving earnings. The non-insurance businesses have also been doing well in the last few years. The addition of Pilot Travel Centers has strengthened its energy business. A sturdy capital level provides further impetus.

However, exposure to cat loss induces earnings volatility and also affects underwriting results. Huge capital expenditure remains a headwind. The company is yet to come out of the shadow of Charles Munger’s passing.

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

Exxon Mobil shares have outperformed the Zacks Oil and Gas – Integrated - International industry over the past year (+16.7% vs. +8.8%). The Zacks analyst believes that the acquisition of Pioneer and Guyana ramp-up have enhanced Exxon Mobil’s profitability. Expansion in low-carbon tech, including Baytown's hydrogen facility, positions it for future growth.

Yet, refining margins are pressured due to global capacity increases, with crack spreads softening. Regulatory hurdles in California and XOM’s reliance on finding recoverable reserves add risk.

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

Shares of Novo Nordisk have underperformed the Zacks  Large Cap Pharmaceuticals industry over the last six months (-23.8% vs. -9.2%). Per the Zacks analyst, the company has faced several setbacks recently. Its insulin icodec in the United States received the FDA’s CRL. A late-stage study on ocedurenone to treat patients with uncontrolled hypertension and CKD had also failed earlier. Moreover, NVO faced allegations from U.S. Senator Bernie Sanders for charging high prices for its semaglutide drugs, Ozempic and Wegovy.

However, GLP-1 medicines are performing well, fueled by increasing demand. Label expansions of the same in cardiovascular and other indications will likely boost sales.

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

Universal Health’s shares have underperformed the Zacks REIT and Equity Trust – Other  industry over the past year (-4.1% vs. +10.5%). The Zacks analyst believes that high leverage and rising interest costs are an issue for the company. Dependence on Universal Health Services and flat lease growth signal limited upside potential. Vacant properties and competitive pressures are other challenges.

Yet, Universal Health Realty exhibits stable growth with lease revenues leading the way. Its healthcare-focused portfolio benefits from long-term triple-net leases. Strategic MOB expansions like Sierra Medical Plaza leverage strong healthcare demand.

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

Other noteworthy reports we are featuring today include Applied Materials, Inc. (AMAT), CrowdStrike Holdings, Inc. (CRWD) and Delta Air Lines, Inc. (DAL).

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>>>

Today's Must Read

Solid Insurance Business Aid Berkshire (BRK.B), Cat loss Ail

GLP-1 Drugs Boost Novo Nordisk (NVO), Market Rivalry a Woe

ExxonMobil's (XOM) Starbroek & Permian Oil Discoveries Aid

Featured Reports

Applied Materials (AMAT) Rides on Strength in AGS Segment
Per the Zacks analyst, solid adoption of 200-mm systems and strengthening subscription business are benefiting the Applied Materials' Applied Global Services (AGS) segment.

CrowdStrike (CRWD) Rides on Product Strength, Acquisitions
Per the Zacks analyst, CrowdStrike is gaining from solid contributions of its growth-oriented products, primarily Falcon platform. Also, strategic buyouts like Bionic and Reposify are positive.

Permian Acquisition to Boost Coterra (CTRA) Profitability
The Zacks analyst believes that Coterra Energy's $3.95 billion acquisition strengthens its position in the lucrative Permian Basin but is worried over lower natural gas prices.

DuPont (DD) Benefits from Productivity Action, New Products
Per the Zacks analyst, DuPont's cost and productivity improvement actions will support its margins. It should also gain from new product launches in high-growth markets.

Buyouts Drive Extra Space (EXR), Low New Customer Rates Ail
Per the Zacks analyst, its high brand value, geographically diversified portfolio and accretive buyouts are likely to aid Extra Space Storage's performance despite lower new customer rates.

Robust 5G Coverage Aid Telefonica (TEF) Amid Forex Headwinds
Per the Zacks analyst, Telefonica's broadened 5G footprint across Spain, Germany and Brazil is strengthening its position. Unfavorable forex trends and global macroeconomic uncertainty are concerning.

Air Travel Demand Aids Delta Air Lines (DAL) Amid Cost Woes
The Zacks analyst is impressed by the rosy air travel demand scenario. However, the company's high labor costs are a concern.

New Upgrades

Solid Pipeline, Cash Position to Aid Canadian Solar (CSIQ)
Per the Zacks analyst, a strong project pipeline boosts revenue growth prospects for Canadian Solar. Also, its solid financial position should attract more investors to buy this stock

Robust SaaS Portfolio, Mask Sales Aid ResMed (RMD)
The Zacks Analyst is impressed with ResMed's Software-as-a-Service arm gaining from the MEDIFOX DAN acquisition, as well as the Brightree and MatrixCare portfolio. Mask Sales grow on new launches.

Robust Construction Activity & Acquisitions Aid EMCOR (EME)
Per the Zacks analyst, EMCOR benefits from innovation and high-demand projects, particularly in data centers, semiconductor plants, and institutional sectors. Also, focus on acquisitions bode well.

New Downgrades

Technology & Product Investment Costs Hurt Insperity (NSP)
Per the Zacks analyst, Insperity's investments toward technology, product and service offerings is likely to keep the bottom line under pressure.

Lower Sales on Macro Woes Continue to Hurt CommScope (COMM)
Per the Zacks Analyst, lower net sales across segments are hurting CommScope's (COMM) revenue growth. Macroeconomic woes remain a concern.

Guess? (GES) Troubled by Challenges in Asia & North America
Per the Zacks analyst, weak consumer demand and traffic in North America and Asia are weighing on Guess?'s performance. Management lowered its fiscal 2025 view as it expects these hurdles to persist.

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Exxon Mobil Corporation (XOM) : Free Stock Analysis Report

Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report

Novo Nordisk A/S (NVO) : Free Stock Analysis Report

Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report

Applied Materials, Inc. (AMAT) : Free Stock Analysis Report

CrowdStrike (CRWD) : Free Stock Analysis Report

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