Friday, February 21, 2025

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 Microsoft Corp. (MSFT), Analog Devices, Inc. (ADI) and Enbridge Inc. (ENB), as well as a micro-cap stock, NVE Corp. (NVEC). 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 >>>

Ahead of Wall Street

The daily 'Ahead of Wall Street' article is a must-read for all investors who would like to be ready for that day's trading action. The article comes out before the market opens and attempts to make sense of that morning's economic releases and how they will affect that day's market action. You can read this article for free on our home page and can actually sign up there to get an email notification as this article comes out each morning.

You can read today's AWS here >>> Pre-Market Dow Sinks on UNH Report; Econ Reports After the Open

Today's Featured Research Reports

Microsoft’s shares have underperformed the Zacks Computer - Software industry over the past year (+1.1% vs. +7.2%). The Zacks analyst believes that the Microsoft Office's declining commercial licensing due to the continued customer shift to cloud offerings is an overhang. Higher operating expenses and spending on Azure amid stiff competition in the cloud space remain concerns.

However, the company is riding on robust Azure and Office 365 performance, amplified by surging AI Copilot adoption. Continued momentum in the small and medium businesses and frontline worker offerings, as well as a rise in revenue per user, is encouraging.

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

Analog Devices’ shares have outperformed the Zacks Semiconductor - Analog and Mixed industry over the past year (+27.1% vs. +2.4%). The Zacks analyst believes that the company is benefiting from strong momentum across the consumer and automotive end markets. Strong momentum across the electric vehicle space on the back of its robust Battery Management System solutions remains a tailwind. Strong investments in technology and business innovation are contributing well.

Yet the weak demand environment across multiple end markets remains a major concern. The sluggish communications market due to the broad-based inventory corrections is a major negative. Broad-based weakness in the industrial end market remains a headwind.

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

Shares of Enbridge have underperformed the Zacks Oil and Gas – Production and Pipelines industry over the past two years (+11.0% vs. +40.8%). Per the Zacks analyst, the company’s significant debt load, rising interest costs and exposure to interest rate fluctuations pose financial risks. Additionally, the global energy transition and legal challenges, particularly surrounding Line 5, could impact long-term growth and asset value.

However, its extensive crude and liquids pipeline network, backed by long-term, low-risk contracts, ensures stable cash flows. Enbridge's strong dividend growth offers reliable income for its shareholders. It is well-positioned to meet rising gas and power demand, driven by developments in data centers, electric power and coal retirement.

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

NVE’s shares have underperformed the Zacks Electronics - Semiconductors industry over the last six months (-5.3% vs. +33.7%). The Zacks analyst believes that product sales declined year over year due to inventory gluts and weak semiconductor demand. Rising costs pressure margins, while higher inventories risk write-downs. The dependence on large customers and semiconductor cycles heightens revenue volatility. New product adoption and macroeconomic risks create uncertainties.

However, strategic R&D investments fuel innovation in miniaturized medical devices and robotics. Capacity expansion supports growth, and stable demand in medical and defense markets ensures revenue resilience.

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

Other noteworthy reports we are featuring today include Trane Technologies plc (TT), Waste Connections, Inc. (WCN) and Occidental Petroleum Corp. (OXY).

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>>>

Today's Must Read

Adoption of Cloud & Office 365 Strength Aid Microsoft (MSFT)

Battery Management System Solutions Aid Analog Devices (ADI)

Enbridge (ENB) to Gain on Long-Term, Take-or-Pay Contracts

Featured Reports

Planned Investments, Permian Basin Focus Aid Occidental (OXY)
Per the Zacks analyst Occidental's investments to strengthen infrastructure and expansion of Permian Basin operation through acquisition will drive its performance over the long run.

Trane's (TT) Growth Driven by Innovation, Faces Competition
The Zacks Analyst notes that Trane's growth is driven by demand for its innovative solutions, energy-efficient products, and decarbonization efforts. However, stiff competition remains a challenge.

Operating Prowess Aid Waste Connections (WCN), Liquidity Low
Per the Zacks analyst, Waste Connections' low-overhead, highly efficient operational structure allows it to expand into geographically contiguous markets. Low liquidity remains a concern.

MGM Resorts (MGM) Banks on Sports Betting, High Costs Ail
Per the Zacks analyst, MGM Resorts is likely to benefit from sports betting expansion, property enhancements and strategic partnerships. However, high costs and heightened competition are a headwind.

ANSYS' (ANSS) Performance Driven by Robust Product Portfolio
Per the Zacks Analyst, higher demand for simulation solutions is driving ANSYS's performance. Stiff competition and forex volatility are concerning.

Mainland China Weakness Hurts The Estee Lauder Companies (EL)
Per the Zacks analyst, The Estee Lauder Companies is hurt by weakness in mainland China. During fiscal second-quarter, net sales dropped 6% due to weaknesses across China and travel retail.

Solid AUM, Innovation Aid SEI Investments (SEIC), Costs High
Per the Zacks analyst, robust AUM, buyouts, superior technology, and solid balance sheet will likely aid SEI Investments' financials. Yet, high costs and huge reliance on fee-based revenues are woes.

New Upgrades

Sonoco (SON) to Benefit from Higher Volumes & Acquisitions
The Zacks Analyst believes improving volumes in both of its segments, contribution from its recent Eviosys acquisition as well as ongoing investments in core businesses will aid Sonoco's growth.

Phibro (PAHC) Gains Ground on Growing Animal Health Business
The Zacks analyst is impressed with Phibro's Animal Health business, which demonstrated a strong 32.5% sales growth in the second quarter of fiscal 2025.

PRA Group (PRAA) Banks on Acquisitions, Cash Collections
Per the Zacks Analyst, strategic initiatives like acquisitions and collaborations should enhance PRAA's capabilities. Strong cash collections from the United States and Europe bode well.

New Downgrades

NIKE (NKE) Witnesses Soft Lifestyle Sales and Other Headwind
Per Zacks analyst, NIKE has been experiencing sluggish sales in its lifestyle segment, including men's, women's, and Jordan. In addition, challenges in the Greater China market remain concerns.

High Medical Care Costs Hurt Margins of Molina (MOH)
Per the Zacks Analyst, a rise in medical care costs and general and administrative expenses will inflict adversities on the company's margins. Its medical care ratio also remains high.

Macro Risks & Increased Costs Hurt Fluor's (FLR) Growth
Per the Zacks analyst, Fluor's prospects are hurting from lingering global macro risks and project delays. Also, the inflationary pressures add to the headwinds.

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Analog Devices, Inc. (ADI) : Free Stock Analysis Report

Microsoft Corporation (MSFT) : Free Stock Analysis Report

Occidental Petroleum Corporation (OXY) : Free Stock Analysis Report

Enbridge Inc (ENB) : Free Stock Analysis Report

Waste Connections, Inc. (WCN) : Free Stock Analysis Report

Trane Technologies plc (TT) : Free Stock Analysis Report

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