Top Stock Reports for Procter & Gamble, NIKE & UPS

Sheraz Mian
·7 min read

Friday, October 30, 2020

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 Procter & Gamble (PG), NIKE (NKE) and United Parcel Service (UPS). 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 >>>

Procter & Gamble shares have outperformed the Zacks Soap and Cleaning Materials industry in the year to date period (+9% vs. +8.8%). The Zacks analyst believes that the company’s efforts to make its cleaning and personal care products available during the ongoing coronavirus crisis have helped bolster sales.

Its solid first-quarter fiscal 2021 earnings mark the continuation of its earnings surprise trend. Further, earnings and sales improved year over year in the reported quarter on gains from significant sales increase, related fixed cost leverage and ongoing productivity efforts. Sales were aided by strength across all segments as well as robust shipments, pricing and mix.

Cost savings aided core currency-neutral gross and operating margin, which expanded 170 bps and 350 bps, respectively. Also, it delivered adjusted free cash flow productivity of 95% in the fiscal first quarter. Driven by the robust results, the company raised its outlook for fiscal 2021. However, currency headwinds are likely to affect results in fiscal 2021. Also, stiff competition remains a woe.

(You can read the full research report on Procter & Gamble here >>>)

Shares of NIKE have gained +33.5% over the past year against the Zacks Shoes and Retail Apparel industry’s rise of +31.9%. The Zacks analyst believes that even as stores reopen, NIKE witnesses strong digital trends, which demonstrates the strength of its brands and investments made over the past several years to improve digital consumer experiences.

Digital sales for the NIKE brand in first-quarter fiscal 2021 exhibited double-digit growth across North America, Greater China, and APLA, along with triple-digit growth in EMEA.  Moreover, decline in SG&A expenses on lower overhead costs and demand creation expenses aided earnings.

Further, the company expects robust top line growth in fiscal 2021 owing to anticipated gains in the second half. However, soft traffic at retail stores and lower revenues at Wholesale business remain headwinds. Moreover, higher promotions and supply-chain costs hurt gross margin in the quarter.

(You can read the full research report on NIKE here >>>)

UPS shares have gained +71.2% over the past six months against the Zacks Transportation - Air Freight and Cargo industry’s rise of +102.1%. The Zacks analyst believes that UPS is benefiting from a significant increase in home deliveries amid the prevalent coronavirus pandemic.

Notably, the need for door-to-door delivery of essentials during this crisis is rising. Owing to the surge in residential delivery volumes and strong outbound demand from Asia, UPS performed very well in third-quarter 2020.

Moreover, the optimism surrounding the stock is evident from the Zacks Consensus Estimate for current-year earnings being revised upward in the past 60 days. However, the third-quarter decline in adjusted operating profit at the U.S. Domestic Package segment is a concern.

(You can read the full research report on UPS here >>>)

Other noteworthy reports we are featuring today include Cisco (CSCO), Zoom Video Communications (ZM) and Lockheed Martin (LMT).

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Sheraz Mian

Director of Research                                                             

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

P&G's (PG) Productivity & Cost Savings Plan to Aid Margins

NIKE's (NKE) Digital Business Aid Top Line Amid the Pandemic

UPS Strong on E-commerce Surge and Robust Free Cash Flow

Featured Reports

Cisco (CSCO) to Gain From Security Products & Webex Ado

Per Zacks analyst, Cisco is poised to benefit from expanding presence in the rapidly growing security market. Also, solid uptake of Webex amid coronavirus-led work-from-home wave remains a tailwind.

Work-From-Home & Online Learning Wave Aids Zoom Video (ZM)

Per the Zacks analyst, Zoom Video is benefiting from the coronavirus-induced remote working and Internet-based education wave.

Robust Demand Aids Lockheed (LMT), F-35 program's Cost Hurts

Per the Zacks analyst, Lockheed Martin witnesses strong demand for its aircraft programs and missile defense systems.

Project Investments, Productivity to Aid Air Products (APD)

While Air Products faces headwind from weak volumes in the Americas and EMEA, it should gain from investments in high-return industrial gas projects and productivity actions, per the Zacks analyst.

Growth Investments Aids ABB Despite Soft Market Demand

Per the Zacks analyst, ABB's organic growth investments along with diligent cost-cutting actions will boost its competency.

Freight Woes Ail Canadian Pacific (CP), Dividends Impress

The Zacks analyst is concerned about the softness in freight revenues. However, the company's measures to reward its shareholders through dividends are encouraging.

Investment on Infrastructure & Renewable Aid Eversource (ES)

Per the Zacks analyst, Eversource's investment of $14.2 billion to enhance clean electricity generation will boost its profitability.

New Upgrades

Brown & Brown (BRO) Gains on Solid Organic, Inorganic Growth

Per the Zacks analyst, Brown & Brown is set to grow on strategic acquisitions and mergers, which enhance its capabilities. Also, higher commissions and fees position it well for growth.

Pilgrim's Pride (PPC) Gains From Robust European Operations

Per the Zacks analyst, Pilgrim's Pride (PPC) is gaining from higher sales in European operations for a while now. Notably, during third-quarter sales in the region surged 63.4% year over year.

Antero (AR) Banks on Natural Gas-Rich Appalachian Basin

The Zacks analyst is optimistic about Antero's production growth since the upstream firm has a huge inventory of drilling locations in the prolific Appalachian Basin.

New Downgrades

High Expenses, Concentration Risk Hurt CME Group (CME)

Per the Zacks analyst, CME Group's high expenses and dependence on trading volumes from two product lines for a significant portion of its clearing and transaction fee revenues are a concern.

CRISPR's (CRSP) High Reliance on Vertex for Revenues a Woe

Per the Zacks analyst, CRISPR Therapeutics is solely dependent on Vertex for collaboration revenues, which is a concern. Stiff competition in the target market also remains a headwind.

Rising Expenses Weighs on Jack in the Box's (JACK) Margins

Per the Zacks analyst, wage inflation along with a rise in delivery fees and supply costs owing to the coronavirus pandemic hurts the Jack in the Box's margin. Moreover, high debt is also a concern.

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Zoom Video Communications, Inc. (ZM) : Free Stock Analysis Report
United Parcel Service, Inc. (UPS) : Free Stock Analysis Report
Procter Gamble Company The (PG) : Free Stock Analysis Report
NIKE, Inc. (NKE) : Free Stock Analysis Report
Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
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