Best analyst reports for Lowe’s, Southern Company and Freeport-McMoRan

Thursday, January 13, 2022

Zacks Research Daily features top research results from our team of analysts. Today’s Research Daily features new research reports on 16 major stocks, including Lowe’s Companies, Inc. (LOW), The Southern Company (SO) and Freeport-McMoRan Inc. (FCX). These research reports have been handpicked from the approximately 70 reports published today by our team of analysts.

You can see all today’s research reports here >>>

Lowe’s shares have gained +15.8% over the past three months, roughly in line with Zacks Building Products – Retail’s +15.3% gain. The Zacks analyst believes the company remains well positioned to capitalize on demand from the home improvement market, supported by investments in technology, the commodity category and strength in the Pro business.

Lowe’s reported strong third-quarter fiscal 2021 results, in which both the high and low topped the Zacks consensus estimate and rose year-over-year. Results benefited from the good execution of strategies, including the Total Home strategy. The Total Home strategy resonated well with Pro and DIY customers. The focus on productivity has helped the company increase its margins.

Additionally, sales increased 25% in the third fiscal quarter. Management is committed to improving Pro offerings, growing the company’s market share and increasing operating margin.

(You can read the full research report on Lowe’s here >>>)

Shares of Southern Company outperformed the Zacks Utility – Electric Power industry over the past year (+14.8% vs. +6.7%). The Zacks analyst believes that by taking advantage of the demographics of its operating territories, such as healthy population and employment growth, Southern Company has gradually increased its customer base. With good rate base growth and constructive regulation, the utility is expected to deliver steady growth in earnings and dividends over the next few years.

However, its high leverage, as well as ongoing time and cost overrun issues on its Vogtle project, are major overhangs. While the power utility holding company’s 60.9% debt ratio limits financial flexibility, its $25 billion Vogtle nuclear plant has already exceeded budget and is years behind schedule. Therefore, Southern Company justifies a cautious attitude on the part of investors.

(You can read the full Southern Company research report here >>>)

Freeport-McMoRan shares have gained +21.6% over the past three months against the industry’s -1.4% decline Zacks Mining – Non Ferrous. The Company conducts exploration activities near existing mines to expand reserves. The Zacks analyst believes the company should benefit from progress in exploration activities which will increase production capacity.

Freeport’s Lone Star project offers additional benefits. The company is also well positioned to benefit from automotive electrification, which is positive for copper as electric vehicles are copper-intensive. The rise in copper prices should also support its margins. The company’s efforts to reduce its debt are also encouraging.

However, the company is facing headwinds due to rising energy and freight costs. Higher costs could hurt its margins. Another concern is the recent weakness in copper demand in China amid slowing economic growth.

(You can read the full research report on Freeport-McMoRan here >>>)

Other noteworthy reports we feature today include Netflix, Inc. (NFLX), Cenovus Energy Inc. (CVE) and Molina Healthcare, Inc. (MOH).

Sheraz Mian

Director of Research

Note: Sheraz Mian leads the equity research department at Zacks and is a well-known expert on overall earnings. He is frequently quoted in the written and electronic press and publishes the weekly Earnings trends and Earnings Overview reports. If you would like to receive an email notification whenever Sheraz publishes a new article, please click here>>>

To read today

Lowe’s (LOW) Omnichannel Efforts and Professional Business Bode Well

Southern Company (SO) driven by the regulated growth of its customer base

Exploration progress, debt reduction to help Freeport (FCX)

Featured Reports

Cenovus (CVE) will benefit from the sale of Tucker’s Alberta assets
The Zacks analyst is bullish on Cenovus’ divestiture of Tucker’s thermal asset, which will improve its ability to increase shareholder returns.

Help for Hawaiian Electric (HE) investments, COVID impacts are affected
Systematic investment in utility infrastructure development projects has boosted Hawaiian Electric, according to the Zacks analyst.

Strong bandwidth demand helps Ciena (CIEN) amid COVID-19 woes
According to the Zacks analyst, increasing network traffic, demand for bandwidth and the adoption of cloud architectures are adding to Ciena’s momentum.

Revenue growth, lower costs Aid Molina Healthcare (MOH)
According to the Zacks analyst, Molina Healthcare’s revenue surge can be attributed to strong premium income and solid membership growth. Efforts to control costs have boosted its margins.

Growth in fee income helps UMB Financial (UMBF) amid high costs
According to the Zacks analyst, the steps taken by UMB Financial to diversify its operations and improve its revenue-generating capabilities will increase commission income.

Strong Housing Demand Helps PulteGroup (PHM) Amid Supply Difficulties
According to the Zacks analyst, strong demand trends, rising prices and a focus on entry-level buyers are benefiting PulteGroup. Yet disruptions in the manufacture and supply of building products are of concern.

Robust Content Helps Netflix (NFLX) Amid Fierce Competition
According to the Zacks analyst, Netflix’s strong content portfolio is driving subscriber additions, helping it gain market share from Disney+, Apple TV+, HBO Max and Peacock.

New upgrades

E-Commerce Growth and CAM Segment Helps Air Transport (ATSG)
According to the Zacks analyst, the performance of the CAM segment is encouraging. Additionally, strong e-commerce demand is positive for air travel (ATSG).

AMN Healthcare (AMN) continues to benefit from acquisitions
The Zacks analyst is optimistic about AMN Healthcare strengthening its inorganic following via buyouts. An expanded portfolio meeting diverse and growing healthcare talent needs is also cause for optimism.

Capri Holdings (CPRI) Digital Efforts to Help Top Line
The Zacks analyst said the deployment of resources to upgrade the distribution infrastructure and e-commerce platform bodes well for Capri Holdings. E-commerce sales grew by double digits in the second quarter.

New downgrades

Competition for Halozyme’s partner drugs (HALO) on the rise
According to the Zacks analyst, Halozyme derives its revenue from royalties on sales of drugs developed using ENHANZE technology. Some drugs are facing increasing competition from biosimilars, hurting its topline.

Cost and volume issues hurt prospects for Canadian Pacific (CP)
The Zacks analyst worries about escalating operating expenses, which are hurting the company’s bottom line. Lower volume growth expectations are also a downside.

Growing competition and rising spending are hurting Alibaba (BABA)
According to the Zacks analyst, Alibaba faces intense competition in the e-commerce market. Additionally, the higher costs associated with new initiatives remain an overhang.

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Click to get this free report

Southern Company The (SO): Free Stock Analysis Report

Netflix, Inc. (NFLX): Free Stock Analysis Report

FreeportMcMoRan Inc. (FCX): Free Stock Analysis Report

Lowe’s Companies, Inc. (LOW): Free Stock Analysis Report

Molina Healthcare, Inc (MOH): Free Stock Analysis Report

Cenovus Energy Inc (CVE): 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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