Friday, January 31, 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 NVIDIA Corp. (NVDA), Johnson & Johnson (JNJ) and T-Mobile US, Inc. (TMUS), as well as a micro-cap stock The Eastern Co. (EML). 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 open 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 >>> December PCE Steady with Expectations; Plenty of Mixed Q4 Earnings
Today's Featured Research Reports
NVIDIA’s shares have outperformed the Zacks Semiconductor - General industry over the past year (+96.7% vs. +73.9%). The company is benefiting from the strong growth of artificial intelligence (AI), high performance and accelerated computing. The data center end-market business is benefiting from the growing demand for generative AI and large language models using graphic processing units (GPUs) based on NVIDIA Hopper and Ampere architectures.
A surge in hyperscale demand and higher sell-ins to partner across the Gaming and ProViz end markets following the normalization of channel inventory are acting as tailwinds. Collaborations with Mercedes-Benz and Audi are likely to advance its presence in the autonomous vehicles and other automotive electronics space.
The Zack’s analyst expect NVIDIA’s revenues to witness a CAGR of 50.5% through fiscal 2025-2027. However, softening IT spending amid macroeconomic headwinds and the U.S.-China tech war remain major concerns.
(You can read the full research report on NVIDIA here >>>)
Shares of Johnson & Johnson have underperformed the Zacks Large Cap Pharmaceuticals industry over the past year (-0.5% vs. +1%). The company’s sales in the MedTech segment have slowed down due to headwinds in Asia-Pacific markets like China and competitive pressure in some categories. The launch of Stelara generics is expected to significantly erode the drug’s sales in 2025. The uncertainty around its talc lawsuits remains.
Nevertheless, J&J beat Q4 estimates for earnings and sales. Its Innovative Medicine unit is showing a growth trend, driven by existing products like Darzalex, Tremfya and Erleada and continued uptake of new launches, including Spravato, Carvykti and Tecvayli.
J&J is making rapid progress with its pipeline and has been on an acquisition spree lately, which has strengthened its pipeline. J&J has also made strong progress toward resolving the talc litigation.
(You can read the full research report on Johnson & Johnson here >>>)
T-Mobile’s shares have outperformed the Zacks Wireless National industry over the past year (+46.6% vs. +27.6%). The company reported impressive fourth-quarter 2024 results, with both the bottom and top lines surpassing the respective Zacks Consensus Estimate. The company is benefiting from solid demand for postpaid services.
In 2024, the company added 6.1 million postpaid net customers while postpaid net account additions were 1.1 million, both metrics being the best in the industry. Solid growth in free cash flow accentuates efficient capital management and implies that the company is well-positioned to invest in growth initiatives and pay debt and dividends.
However, owing to the stock’s premium valuation, we believe investors should remain cautious as macroeconomic factors, market saturation, or economic downturns can significantly impact overvalued stocks like TMUS. Fierce competition is straining profitability. A high debt burden remains a concern.
(You can read the full research report on T-Mobile here >>>)
Shares of Eastern have outperformed the Zacks Security and Safety Services industry over the past year (+17% vs. +12.1%). This microcap company with market capitalization of $171.52 million demonstrates robust revenue growth, with net sales rising 6% year over year to $206.1 million in the first nine months of 2024, fueled by demand for truck mirror assemblies and transport packaging. Its 13% backlog growth highlights strong future sales potential. Gross margins improved to 25.2%.
Portfolio realignment, including divesting Big 3 Mold, focuses resources on high-growth segments. The “One Eastern” strategy enhances efficiency, supported by investments in Mexico and China for competitive scalability. Eastern’s 337th consecutive dividend exemplifies financial stability and shareholder focus.
However, challenges include a 54% drop in operating cash flow, rising SG&A expenses, elevated capital intensity, and inventory pressures. Debt increased to $41.5 million with rising leverage, amplifying interest rate risks. Geopolitical challenges further weigh on financial flexibility.
(You can read the full research report on Eastern here >>>)
Other noteworthy reports we are featuring today include Starbucks Corp. (SBUX), The Boeing Co. (BA) and Marathon Petroleum Corp. (MPC).
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
NVIDIA (NVDA) Rides on Strong Adoption of GPUs, Partnerships
J&J's (JNJ) Innovative Medicine Strong, MedTech Slows Down
T-Mobile (TMUS) Rides on Healthy Demand, Strategic Acquisition
Featured Reports
Menu Innovation & Marketing Efforts Aid Starbucks (SBUX)
Per the Zacks analyst, Starbucks benefits from menu simplification, marketing campaigns and digital initiatives. Also, the removal of the extra charge for non-dairy milk customizations bodes well.
Defense Business Aids Boeing (BA), Supply Chain Issue Woes
Per the Zacks analyst, strong order growth for Boeing's defense business unit should benefit the company. Yet, supply-chain issues impacting the aviation industry continue to pose a risk for Boeing
Marathon (MPC) to Gain from Sale of Speedway Retail Unit
The Zacks analyst likes Marathon's sale of Speedway business and the resulting cash infusion but is worried over the execution risk associated with its foray into renewable diesel activities.
Solid Adoption of ESG Solution Aids MSCI's (MSCI) Progress
Per the Zacks analyst, MSCI is benefiting from strong demand for custom and factor index modules and the increasing adoption of the ESG and Climate solutions into the investment process.
General Mills (GIS) Benefits From Strength in Pet Segment
Per the Zacks analyst, General Mills' Pet segment displays robust potential due to its high consumer demand, premium brand positioning, and strategic investments in innovation and brand communication.
Solid Demand & Investments Aid Packaging Corporation (PKG)
Per the Zacks analyst, Packaging Corp will gain on strong packaging demand driven by e-commerce and the need for food, beverages and medicines and its ongoing investments to boost production.
Patient-Centric Care Model, Strength in IKC Aid DaVita (DVA)
The Zacks analyst is upbeat about DaVita's patient-centric care model that leverages its platform of kidney care services. Continued strength in Integrated Kidney Care or IKC unit is an added plus.
New Upgrades
Strong Execution Services & Balance Sheet Aid Virtu Financial (VIRT)
Per the Zacks Analyst, a diversified revenue stream in Execution services continues to drive Virtu Financial's revenues. A robust balance sheet ensures a strong solvency position.
Strength in Motive Power Segment to Benefit EnerSys (ENS)
Per the Zacks analyst, EnerSys' Motive Power Segment is driven by increased sales of maintenance-free thin plate pure lead and lithium products. Its shareholder friendly measures are encouraging.
Strong Automotive Insurance Vertical Drives EverQuote (EVER)
Per the Zacks analyst, EverQuote is set to grow on solid performance of automotive and other insurance marketplace verticals. Increasing consumer traffic and higher quote request volume are positives.
New Downgrades
CSX's Prospects Hurt by High Debt Load & Soft Coal Market
The Zacks analyst is concerned about the weak coal market, which has resulted in below-par coal revenues. CSX's high debt levels are also worrisome.
Signet (SIG) Struggles with Fashion Gifting as Comps Decline
Per the Zacks analyst, Signet saw a drop in same-store sales, with the fashion gifting segment underperforming due to shifting consumer preferences for lower-priced items. The company cut the Q4 view.
Rising Costs & Weak Credit Quality Hurt Deutsche Bank (DB)
Per Zacks analyst, Deutsche Bank's rising expenses due to ongoing litigation costs related to the Postbank takeover are likely to limit its bottom line. Also, the weak credit quality is concerning.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpThe Boeing Company (BA) : Free Stock Analysis Report
Johnson & Johnson (JNJ) : Free Stock Analysis Report
Starbucks Corporation (SBUX) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Marathon Petroleum Corporation (MPC) : Free Stock Analysis Report
T-Mobile US, Inc. (TMUS) : Free Stock Analysis Report
Eastern Company (The) (EML): 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.
