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Friday, December 20, 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 Caterpillar Inc. (CAT), Shopify Inc. (SHOP) and Eaton Corp. plc (ETN), as well as a micro-cap stock Vaso Corp. (VASO). 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 >>>
Caterpillar’s shares have outperformed the Zacks Manufacturing – Construction and Mining industry over the past year (+26.2% vs. +22.4%). The company’s Construction Industries segment will gain from increased construction activities in the U.S. and globally. The mining sector will be bolstered by commodity demand driven by the energy transition trend, which will support the Resource Industries segment.
The Energy & Transportation segment is well-positioned for growth, backed by strong demand across all applications. The company has has been winessing growth in aftermarket parts and service-related revenues, which generate high margins. It plans to double its services revenues to $28 billion in 2026.
Caterpillar has paid higher annual dividends to shareholders for 30 consecutive years. Its current dividend yield is higher than its peers. A solid liquidity position and investments in expanding services and digital initiatives will lead to exceptional returrns.
(You can read the full research report on Caterpillar here >>>)
Shares of Shopify have outperformed the Zacks Internet – Services industry over the past year (+40.6% vs. +30.5%). The company is benefiting from strong growth in its merchant base. New merchant-friendly tools like Bill Pay, Tax Platform, Collective and the Marketplace Connect app are helping it to win new merchants regularly.
Strong adoption of these solutions holds promise for Shopify’s prospects. Integration of Shop Pay Installments into the point-of-sale terminal and general availability of Pro makes it easier for merchants to discover and engage their customers. Expansion of back-office merchant solutions to more countries is also strengthening Shopify’s international footprint.
An expanding partner base that includes TikTok, Snap, Pinterest, Criteo, IBM, Cognizant, Amazon and Adayen are expected to expand its merchant base further. However, persistent inflation and cautious consumer spending are headwinds.
(You can read the full research report on Shopify here >>>)
Eaton’s shares have outperformed the Zacks Manufacturing – Electronics industry over the past year (+43.2% vs. +15.7%). The company benefits from its research and development work that allows the company to develop new products. Eaton is aided by rising demand from the new AI data center and contributions from its organic assets.
Eaton has been expanding via acquisitions and strategy to manufacture in the region of its end market which has helped the company to reduce expenses. Reindustrialization and megatrends will create more opportunities for Eaton. Our model projects total revenues to improve year over year in 2024 to 2026 period.
However, Eaton’s global operations expose it to unpredictable currency translation, cyber security threats, changes in tax rates and security breaches, which might impact operations. The shortage of raw materials and supplier insolvencies might impact production and operations
(You can read the full research report on Eaton here >>>)
Shares of Vaso have underperformed the Zacks Medical – Instruments industry over the past year (+3.4% vs. -60.2%). This microcap company with market capitalization of $20.96 million is facing rising selling, general and administrative (SG&A) costs, operating losses of $1.4 million, declining EBITDA and margin pressures, and heightened competition underscore risks. Strategic investments, while promising, pose execution challenges.
Nevertheless, Vaso demonstrates a diversified business model across IT services, medical devices and sales services, with IT revenue growing 12.3% year over year to $11.1 million in third-quarter 2024, reflecting strong demand in healthcare digitization.
Liquidity remains robust, with $26.8 million in cash as of Sept. 30, 2024, and $3.6 million operating cash flow in the first nine months of 2024, supporting growth initiatives. Deferred revenues rose 2.9% to $33.1 million, enhancing predictability. Seasonal fourth-quarter upside and a partnership with GE HealthCare boost near-term prospects.
(You can read the full research report on Vaso here >>>)
Other noteworthy reports we are featuring today include Trane Technologies plc (TT), Diamondback Energy, Inc. (FANG) and Fidelity National Information Services, Inc. (FIS).
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
Rising Demand, Strategic Initiatives Aid Caterpillar (CAT)
Product Rollouts & Growing Merchant Base Aid Shopify (SHOP)
New Product Development,Wide Market Reach Aid Eaton (ETN)
Featured Reports
Strong Commercial HVAC Markets Aid Trane Technologies (TT)
Per the Zacks analyst, Trane Technologies’ top-line benefits from strong Commercial HVAC Markets. Energy-efficient product installation and decarbonizing the built environment strengthens the market.
Diamondback (FANG) to Benefit from Low Breakeven Costs
The Zacks analyst likes Diamondback Energy’s extremely low oil price breakeven costs, wherein the company needs the commodity to be at just $40 a barrel to be profitable.
Fidelity’s (FIS) Strategic Acquisitions Aid, High Debt Hurt
Per the Zacks analyst, multiple buyouts and technological investments are helping Fidelity National enhance its capabilities. However, its high debt burden remains a concern.
Align Technology (ALGN) Expands Invisalign Amid Macro Woes
The Zacks analyst is impressed with Align Technology’s robust commercialization of the Invisalign Palatal Expander system, including in Singapore. Yet, macroeconomic hurdles can hurt its operations.
Insmed (INSM) Rides on Upbeat Bronchiectasis Drug Study Data
The Zacks Analyst is encouraged by Insmed’s recently reported data from a phase III study on brensocatib in treating bronchiectasis. Based on the results, a commercial launch is planned for mid-2025.
Rising Deposit Aid Flagstar Financial (FLG), High Costs Ail
Per the Zacks analyst, Flagstar Financial’s improving deposit balance will support the company’s financials. Yet, rising costs remain a concern.
Expansion Efforts, Investments to Aid OUTFRONT Media (OUT)
Per the Zacks Analyst, efforts to expand the out-of-home advertising platform and strategic investments in its digital billboard portfolio are likely to aid OUTFRONT Media despite competitive market.
New Upgrades
Increasing Defense Orders From Pentagon Aids Leidos (LDOS)
As per the Zacks analyst, Leidos Holdings is likely to benefit from increasing defense order growth from the Pentagon and US allies.
GAP (GAP) Benefits From Brand Strength & Other Endeavors
Per Zacks analyst, Gap is benefiting from strength in brands and higher market share. The company has also been gaining from lower commodity costs, improved promotions and cost-management efforts.
Product Expansions Boosts JAKKS Pacific’s (JAKK) Prospects
Per the Zacks analyst, JAKKS Pacific is likely to benefit from product expansions, FOB business model and retail growth efforts. Also, focus on strategic collaborations bode well.
New Downgrades
Forex Woes, Soft Sensing Solutions Business Ail Sensata (ST)
Per the Zacks analyst, Sensata’s performance is affected by a weak Sensing solutions segment and forex headwinds. High-debt burden is an added concern.
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 first-quarter, organic net sales dropped 5% due to deteriorating consumer sentiment in China.
Persisting Inflation & Macro Risks Ail Leggett’s (LEG) Growth
Per the Zacks analyst, a still high inflationary scenario is hindering demand growth in residential end markets. Also, high costs and expenses and economic softness in Europe are additional headwinds.
Zacks Names #1 Semiconductor Stock
It’s only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it’s positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
Caterpillar Inc. (CAT) : Free Stock Analysis Report
Eaton Corporation, PLC (ETN) : Free Stock Analysis Report
Fidelity National Information Services, Inc. (FIS) : Free Stock Analysis Report
Diamondback Energy, Inc. (FANG) : Free Stock Analysis Report
Trane Technologies plc (TT) : Free Stock Analysis Report
Shopify Inc. (SHOP) : Free Stock Analysis Report
Vaso Corporation (VASO): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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