Friday October 25, 2024
The Zacks Research Daily presents the best research from our analyst team. Today’s Research Daily features new research reports on 16 major stocks, including Costco Wholesale Corp. (COST), The Coca-Cola Co. (KO) and T-Mobile US, Inc. (TMUS), as well as a micro-cap share of Preformed Line Products Co. (PLPC). The Zacks Microcap Research is unique because our research content on these small and under-the-radar companies is the only research of its kind in the country.
These research reports have been hand-picked from the approximately 70 reports published by our analyst team today.
That’s possible View all today’s research reports here >>>
Costcos The stock has outperformed the Zacks Retail – Discount Stores sector over the past year (+36.3% vs. +19.9%). Because the company is a defensive consumer stock, it has survived the market turmoil quite well. The discount retailer’s key strengths include strategic investments, a customer-centric approach, merchandise initiatives and an emphasis on membership growth. These factors have helped the company record decent sales and profit figures.
The Zacks analyst expects the company to post fiscal 2025 adjusted earnings per share of 10% on revenue growth of 7%. This outlook reflects Costco’s ability to navigate the challenging operating environment, generate solid sales and record high membership renewal rates.
A favorable product mix, stable store traffic, pricing power and strong liquidity position should help Costco continue to outperform. While it trades more expensively than its peers, its long-term growth prospects should give the stock solid upside potential.
(That’s possible read here >>> the full research report on Costco)
Shares of Coca-cola have outperformed the Zacks Beverages – Soft Drinks industry over the past year (+13.4% vs. +10.7%). The company is experiencing positive business trends, as evidenced by its strong track record of exceeding expectations. In the third quarter of 2024, the company exceeded sales and earnings expectations for the seventh consecutive quarter, with earnings improving year-over-year.
Results benefited from continued business momentum, helped by higher prices in markets experiencing intense inflation and a favorable mix. KO is well positioned to benefit from its marketing and innovation strategy and growing digital investments.
Coca-Cola has given an optimistic outlook for 2024. It expects organic sales growth of 10% for 2024, while comparable earnings per share will grow by 5-6%. However, Coca-Cola is facing inflationary cost pressures due to higher raw material and material costs and increased marketing investments.
(That’s possible read here >>> the full research report on Coca-Cola)
T-Mobile USA’ The stock has outperformed the Zacks Wireless National sector over the past year (+53.6% vs. +36.0%). The company reported impressive third-quarter 2024 results, with the bottom and top lines exceeding the Zacks Consensus Estimate. Solid demand for postpaid services drove sales.
In the third quarter, the company added 1.6 million postpaid net customers, while the number of postpaid net accounts reached 315,000. Both figures are the best in the sector. Solid free cash flow growth highlights efficient capital management and implies that the company is well positioned to invest in growth initiatives and pay debt and dividends.
However, the highly competitive and saturated nature of the U.S. wireless market could negatively impact financial results. The strategy of introducing various promotional activities to outdo the competition puts pressure on margins. The declining prepaid ARPU is a concern. We repeat our Neutral advice.
(That’s possible read here >>> the full research report on T-Mobile US)
Shares of Preformed line products have underperformed the Zacks Electronics – Miscellaneous Products sector over the past year (-4.2% vs. -4.0%). This microcap company with a market cap of $615.14 million faces near-term risks including declining sales due to communications market weakness, margin compression, foreign exchange challenges and reduced cash flow. The slowdown in customer deployment, delays in stimulus funding and ongoing inventory management challenges are weighing on the company’s prospects.
Nevertheless, Preformed Line Products offers a strong investment case thanks to its robust market position, diverse product portfolio and solid financial health. The company’s extensive range of products for the energy, telecommunications and other industries, supported by strategic global manufacturing facilities, provides a competitive advantage.
PLPC’s focus on innovation and production efficiency ensures that the company can benefit from expected infrastructure investments, especially in the energy and communications sectors.
(That’s possible read here >>> the full research report on Preformed Line products)
Other notable reports we’re featuring today include Amgen Inc. (AMGN), HSBC Holdings plc (HSBC) and Marriott International, Inc. (MAR).
Mark Vickery
Senior editor
Note: Sheraz Mian leads the Zacks Equity Research division and is a renowned expert on total earnings. He is frequently quoted in the print and electronic media and publishes the weekly magazine Earnings trends And Income example reports. If you would like an email notification every time Sheraz publishes a new article, please click here>>>
