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The Zacks Analyst Blog Highlights Alibaba, PepsiCo, ConocoPhillips, Lockheed Martin and 3M Company
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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: Alibaba Group Holding Ltd. BABA, PepsiCo, Inc. PEP, ConocoPhillips COP, Lockheed Martin Corp. LMT and 3M Company MMM.
Here are highlights from Monday’s Analyst Blog:
Top Research Reports for Alibaba, PepsiCo and ConocoPhillips
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 Alibaba Group Holding Ltd., PepsiCo, Inc. and ConocoPhillips. These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Alibaba shares have outperformed the Zacks Internet – ecommerce industry over the past year (+8.1% vs. +3.7%) as well as Amazon (+8.1% vs. -1.1%). The company’s solid momentum across the international commerce retail businesses is driving its top-line growth.
The Zacks analyst expects Alibaba’s revenues to increase +4.4% in fiscal 2024 on a year-over-year basis. Strength in Trendyol, Lazada and AliExpress continues to contribute well.
Additionally, solid momentum across financial services, education and automobile industries remains a positive for the company’s cloud business. This apart, strength across the local consumer services and Cainiao logistics services, Alibaba Health and Freshippo is contributing well.
However, weak in China microenvironment is a headwind. Sluggish China commerce business is a concern. Additionally, softness in digital media business is a headwind. Rising expenses associated with new initiatives are overhangs.
Shares of PepsiCo have outperformed the Zacks Beverages – Soft drinks industry over the past six months (+12.4% vs. +9.8%). The company reported the seventh straight quarter of double-digit organic revenue growth in the second quarter.
The results reflect strength and resilience in its diversified portfolio, modernized supply chain, improved digital capabilities, flexible go-to-market distribution systems and robust consumer demand trends. Resilience and strength in the global beverage and convenient food businesses also aided results.
However, PepsiCo witnessed cost pressures driven by impacts of supply-chain disruptions and inflationary labor, transportation and commodity costs. Adverse currency rates also remain headwinds.
Shares of ConocoPhillips have outperformed the Zacks Oil and Gas – Integrated – United States industry over the past year (+30.0% vs. +20.6%). The company holds a bulk of acres in the unconventional plays of Eagle Ford shale, Permian Basin and Bakken shale. Significant opportunities are there for the company in the Bakken Shale, where it owns about 750 undrilled locations that could provide access to huge reserves.
ConocoPhillips projects its 2023 production at 1.78-1.8 MMBoe/d, suggesting an increase from 1.74 MMBoe/d last year. COP’s balance sheet is significantly less leveraged than the industry it belongs to. Additionally, the company announced its 2023 planned return of capital to shareholders of $11 billion.
However, ConocoPhillips is highly exposed to oil price fluctuations, which makes things challenging for the company. Also, the company has been generating lower dividend yield than the industry for the past few years. As such, the stock warrants a cautious stance.
Other noteworthy reports we are featuring today include Lockheed Martin Corp. and 3M Company.
Lockheed Martin Corporation (LMT): Free Stock Analysis Report
ConocoPhillips (COP): Free Stock Analysis Report
3M Company (MMM): Free Stock Analysis Report
PepsiCo, Inc. (PEP): Free Stock Analysis Report
Alibaba Group Holding Limited (BABA): Free Stock Analysis Report
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