Wednesday, February 26, 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 Berkshire Hathaway Inc. (BRK.B), IBM Corp. (IBM) and GE Aerospace (GE), as well as micro-cap stock Fossil Group, Inc. (FOSL). 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 >>>

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-Markets Try, Try Again to Break into Green

Today's Featured Research Reports

Berkshire Hathaway’s shares have outperformed the Zacks Insurance - Property and Casualty industry over the past year (+17.3% vs. +17.1%). The company is one of the largest property and casualty insurance companies with numerous diverse business activities. A strong cash position supports earnings-accretive bolt-on buyouts and is indicative of its financial flexibility.

Continued insurance business growth fuels an increase in float, drives earnings and generates maximum return on equity. The non-insurance businesses have also been doing well in the last few years. The insurer has also started increasing its investment in Japan. A sturdy capital level provides further impetus. Shares of Berkshire have outperformed the industry year to date.

However, exposure to cat loss induces earnings volatility and also affects underwriting results. Huge capital expenditure remains a headwind. With the demise of Charles Munger, uncertainty looms over the company's performance.

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

Shares of IBM have outperformed the Zacks Computer - Integrated Systems industry over the past year (+46.1% vs. -5.3%). The company is poised to benefit from strong demand for hybrid cloud and AI, driving growth in Software and Consulting. The company’s growth is expected to be driven primarily by analytics, cloud computing, and security in the long haul.

IBM’s core technology platform for AI capabilities watsonx is gaining significant market traction across industries. The acquisition of Applications Software Technology LLC, a global Oracle consultancy firm will bolster its capabilities to assist clients in deploying, managing and maximizing the value of Oracle cloud solutions.

However, frequent acquisitions have escalated integration risks. Buyouts have negatively impacted the company’s balance sheet in the form of high levels of goodwill and net intangible assets. Fierce competition in the hardware enterprise servers and storage markets is weighing on profits.

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

GE Aerospace’s shares have outperformed the Zacks Transportation - Airline industry over the past year (+71.6% vs. +42.1%). The company has been witnessing strength in its businesses, driven by robust demand for commercial engines, propulsion and additive technologies. Rising U.S. & international defense budgets, geopolitical tensions, positive airline & airframer dynamics and robust demand for commercial air travel augur well for the company.

GE Aerospace’s portfolio-reshaping actions are likely to unlock values for its shareholders. The company raised its dividend by 28.6% to 36 cents per share in February 2025. For 2025, GE Aerospace expects organic revenues to grow in the low-double-digit range from the year-ago level.

However, it has been dealing with high costs and expenses related to certain projects and restructuring activities, which are likely to affect its margins and profitability. Also, foreign exchange headwinds might be worrying for the company.

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

Shares of Fossil have outperformed the Zacks Retail - Apparel and Shoes industry over the past year (+60.2% vs. +6.7%). This microcap company with market capitalization of $75.54 million expanded Transform and Grow (TAG) plan targets $300 million in annualized operating income benefits by 2025, up from $100 million in 2024, focusing on SKU rationalization, procurement efficiencies and exiting low-margin categories.

CEO Franco Fogliato’s leadership centers on revitalizing core categories, highlighted by the Machine platform relaunch in 2025 and global campaigns to boost brand competitiveness. Liquidity of $130 million supports debt management. E-commerce expansion aligns with shifting consumer preferences.

Despite gross margin gains, revenue declined 19% year over year. Restructuring costs and declining licensed brand performance strain near-term results. Supply chain risks and wholesale dependence add external pressures, while the backloaded benefits of the TAG plan underscore a need for execution to achieve profitability goals.

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

Other noteworthy reports we are featuring today include Intercontinental Exchange, Inc. (ICE), Amphenol Corp. (APH) and GSK plc (GSK).

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

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

IBM Rides on Solid Customer Engagement, Strategic Acquisitions

Commercial Engines & Services Unit to Aid GE Aerospace (GE)

Featured Reports

Intercontinental (ICE) Banks on Acquisitions Amid High Costs
Per the Zacks analyst, Intercontinental Exchange is set to grow on a number of acquisitions and cost synergies, which in turn, position it well for growth. However, rising expenses weigh on margins.

GSK (GSK) Specialty Medicines Unit Strong; Vaccines Weak
GSK is witnessing increased sales growth of the Specialty Medicines unit. However, slowing sales in the Vaccines unit concerns the Zacks analyst

Colgate's (CL) Innovation Strategy Strengthens Organic Sales
Per the Zacks analyst, Colgate's innovation strategy focuses on growing in adjacent categories and product segments. The premiumization of its Oral Care portfolio has been aiding organic sales.

Increasing LNG Demand to Aid Baker Hughes' (BKR) Growth
Per the Zacks analyst, Baker Hughes' profitability should gain from the potential natural gas demand growth in the upcoming years. However, reduced North American upstream spending raises concern.

Investment & Expanding Operation Aid American Water (AWK)
Per the Zacks analyst American Water's planned long-term investment to strengthen infrastructure and expanding operation through acquisition and organic means are going to drive its performance.

Penumbra (PEN) Rides on Thrombectomy Sales, Global Growth
Penumbra's Thrombectomy growth globally is an upside. Per the Zacks analyst, differentiated technologies of Lightning Flash 2.0 and Lightning Bolt 7 leading to strong patient outcomes is a key driver.

Genpact (G) Gains From AI Product Portfolio Amid Talent Cost
Per the Zacks analyst, acquisitions like Rage Framework and Tandem Seven have expanded Genpact's AI product portfolio. A competitive talent market remains a concern.

New Upgrades

End-Market Strength & Diversification Aids Amphenol (APH)
Per the Zacks analyst, Amphenol benefits from commercial air, defense, industrial and mobile devices end-market demand. Diversified business model also lowers volatility of individual geographies.

Strength Across Outdoor & Fitness Segments Aid Garmin (GRMN)
Per the Zacks analyst, Garmin is riding on solid demand for adventure watches and advanced wearables which is driving the performance of its Outdoor and Fitness segments.

Investments, Appalachian Assets Aid National Fuel Gas (NFG)
Per the Zacks analyst, National Fuel Gas' systematic investment to further strengthen its midstream operations and strong presence in the Appalachian region will boost its performance.

New Downgrades

Expected Decline in Production, High-Cost Ail Autoliv (ALV)
Per the Zacks analyst, the anticipated decline in light vehicle production is expected to reduce demand for Autoliv's products, thereby impacting revenues. High R&D costs also remain a concern.

Records Digitization & High Debt to Hurt Iron Mountain (IRM)
Per the Zacks analyst, digitization of records, a substantial debt burden and competition from industry peers are likely to offer bleak prospects to Iron Mountain.

Uncertain Housing Market & High Costs Ail Boise Cascade (BCC)
Per the Zacks analyst, Boise Cascade's prospects are hurting from the ongoing uncertainties in the housing market and the lingering inflation. Also, high costs and expenses add to the headwinds.

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This article originally published on Zacks Investment Research (zacks.com).

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