Wednesday, January 29, 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 American Express Co. (AXP), Lockheed Martin Corp. (LMT) and Constellation Energy Corp. (CEG), as well a micro-cap stock Crawford United Corp. (CRAWA). 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's 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 >>> Pre-Markets Modestly Lower on Weak Trade Numbers, Good Earnings
Today's Featured Research Reports
American Express’ shares have outperformed the Zacks Financial - Miscellaneous Services industry over the past year (+59.9% vs. +22.1%). The company beat fourth-quarter earnings estimate by a whisker. Its growth initiatives, like launching new products, reaching new agreements and forging alliances, are boosting its revenues. Consumer spending on travel and entertainment, which carries higher margins for AmEx, is advancing well.
American Express' focus on Millennials and Gen-Z consumers, who exhibit strong dining preferences, will position the company for long-term growth. Its solid cash-generation abilities enable the pursuit of business investments and share buybacks and dividend payments.
However, with higher utilization of its cards, costs in the form of card member services and card member rewards are likely to go up. Its current debt level induces a rise in interest expenses. As such, the stock warrants a cautious stance.
(You can read the full research report on American Express here >>>)
Shares of Lockheed Martin have outperformed the Zacks Aerospace - Defense industry over the past year (+10.4% vs. +0.9%). The company ended Q4 2024 on a mixed note. While its earnings beat the Zacks Consensus Estimate, sales missed. Lockheed Martin remains the largest U.S. defense contractor with a steady order flow from its leveraged presence in the global defense industry.
The increased funding offered for its defense products by the U.S. government should boost its business. The F-35 combat jet program remains a major revenue contributor for Lockheed. The company holds a strong solvency position.
However, Lockheed is facing performance issues concerning some of its programs that may lead to notable losses. A shortage of skilled labor may adversely impact its operating results. The sanctions imposed by China on Lockheed might also affect its business.
(You can read the full research report on Lockheed Martin here >>>)
Constellation Energy’s shares have outperformed the Zacks Alternative Energy - Other industry over the past year (+135.2% vs. +68.6%). The company’s strategic $5.1 billion capital expenditure through 2025 should help acquire nuclear fuel and increase inventory levels. The company aims to eliminate 100% of greenhouse gas emissions by leveraging innovative technology.
Constellation Energy aims to increase shareholder value through dividend payments and share repurchases. It has enough liquidity to meet its short-term obligations. However, the company is subject to risks related to non-performance by its suppliers and fluctuation in weather conditions.
Constellation Energy’s retail business is subject to strong competition. The supply markets for nuclear fuel, natural gas and oil are subject to price fluctuations, which can negatively impact its overall performance.
(You can read the full research report on Constellation Energy here >>>)
Shares of Crawford United have outperformed the Zacks Manufacturing - General Industrial industry over the past six months (+10.3% vs. +5.2%). This microcap company with market capitalization of $152.26 million demonstrates consistent growth, with third-quarter 2024 revenues up 9.2% year over year to $36.7 million and year-to-date sales rising 2.5% to $112.8 million. Year over year, operating income rose 22.4% to $5.3 million, and net income grew 19.7% to $3.4 million in third-quarter 2024, reflecting strong cost management.
In third-quarter 2024, gross margins reached 29.1%, and EBITDA grew 10.1% to $6.8 million year over year, showcasing robust cash generation. Strategic acquisitions like Advanced Industrial Coatings bolstered aerospace and defense offerings while diversified markets in healthcare and transportation mitigated risks.
Challenges include slower revenue growth, dependence on cyclical aerospace and defense markets, rising costs, acquisition integration risks, competitive pressures and macroeconomic uncertainty.
(You can read the full research report on Crawford United here >>>)
Other noteworthy reports we are featuring today include MercadoLibre, Inc. (MELI), Suncor Energy Inc. (SU) and Cloudflare, Inc. (NET).
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
Improving Volumes Aid American Express (AXP), High Costs Hurt
Order Growth Boosts Lockheed (LMT), Tiff With Turkey Ails
Focus on Renewable Energy Aid Constellation Energy (CEG)
Featured Reports
MercadoLibre (MELI) Gains From Total Payment Volume Growth
Per the Zacks analyst, MercadoLibre benefits from solid total payment volume growth which is driven by strong momentum across Mercado Pago and mobile-point-of-sale business.
Suncor Energy (SU) Buoyed by Integrated Business Model
The Zacks analyst believes that Suncor's integrated business model positions it well for strong cash flow generation. However, the company's high oil price sensitivity is a concern.
Cloudflare (NET) Rides on Product Strength, Acquisitions
Per the Zacks analyst, Cloudflare is gaining from solid contributions of its growth-oriented products, primarily Cloudflare One platform. Strategic buyouts like Kivera and BastionZero are a positive.
Strong Device Sales Aid ResMed (RMD), High Debt Concerns
The Zacks Analyst is impressed with the strong market performance of ResMed's AirSense 10 and the AirSense 11 platforms, boosting device sales globally. Yet, debt surpassing cash levels pose a risk.
Carnival (CCL) Banks on Booking Improvements, High Costs Ail
Per the Zacks analyst, Carnival benefits from improved booking trends, marketing campaigns and new ship additions. However, high operating expenses is a concern.
eSignature Strength Boost DocuSign (DOCU) Amid Low Liquidity
The Zacks analyst is positive about DocuSign's top line as it is significantly benefiting from continued customer demand for eSignature. Declining liquidity is concerning.
Zillow Group (ZG) Rides on Healthy Demand, AI Integration
Per the Zacks analyst, strong single and multi-family listings in the rental business will likely drive Zillow Group's top line. Focus on developing AI native tools is a tailwind.
New Upgrades
Pilgrim's Pride's (PPC) Operational Excellence to Fuel Sales
Per the Zacks analyst, Pilgrim's Pride's Focus on quality, service, and innovation has been enhancing its performance. Net sales of $4,585 million jumped 5.2% year over year in the quarter.
Corcept (CORT) Rides on Robust Korlym Sales Performance
Per the Zacks analyst, Corcept's sole drug, Korlym, approved for treating Cushing's syndrome, is driving the top-line. The company is also making good progress with its promising pipeline candidates.
Solid Rebound in IB Business Supports Moelis & Company (MC)
Per the Zacks analyst, the revival of investment banking (IB) activities, organic growth, global expansion initiatives and strong balance sheet position will keep aiding Moelis & Company's financials.
New Downgrades
Persistent Supply Chain Issues Hurt Spirit AeroSystems (SPR)
Per the Zacks analyst, higher-than-estimated supply-chain costs for the 787-jet program caused Spirit AeroSystems to incur notable losses. It also holds a weak solvency position.
Weak Demand for Power Products & High Debt Ail Honda (HMC)
Per the Zacks analyst, Honda's Power Products segment has been struggling with declining demand across most markets, which is likely to hit its top-line growth. Rising debt levels are also concerning.
Weaker Demand, High Debt Level Ail Olin (OLN)
Per the Zacks analyst, Olin faces headwinds from soft demand in its chemical businesses along with Hurricane Beryl impacts, which will weigh on its earnings. Its high debt level is also a concern.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
Constellation Energy Corporation (CEG) : Free Stock Analysis Report
American Express Company (AXP) : Free Stock Analysis Report
Suncor Energy Inc. (SU) : Free Stock Analysis Report
MercadoLibre, Inc. (MELI) : Free Stock Analysis Report
Crawford United Corporation (CRAWA) : Free Stock Analysis Report
Cloudflare, Inc. (NET) : 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.
