Top Stock Reports for Chevron, Eli Lilly & Charles Schwab

Monday, November 14, 2022

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 Chevron Corporation (CVX), Eli Lilly and Company (LLY) and The Charles Schwab Corporation (SCHW). 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 >>>

Chevron shares have outperformed the Zacks Oil and Gas – Integrated – International industry over the past year (+59.6% vs. +47.7%). Based on a slew of tailwinds, the company is poised for further capital appreciation. The supermajor is considered one of the best placed integrated oil firms to achieve sustainable production growth, thanks to its premier position in the lucrative Permian Basin.

Chevron’s Noble Energy takeover expanded its footprint in the region and the DJ Basin along with the addition of cash generating offshore assets in Israel. In shareholder friendly moves, the integrated major recently hiked its dividend and boosted the stock repurchase program.

Considering all of these factors, the Zacks analyst expect the company’s EPS to grow 148% this year. Consequently, Chevron is viewed as a preferred energy major to own now.

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

Eli Lilly shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+36.3% vs. +8.0%). The company’s revenue growth is being driven by higher demand for drugs like Trulicity, Taltz, and others. It is regularly adding promising new pipeline assets through business development deals.

Lilly expects to launch five new medicines by 2023 end including Mounjaro for type II diabetes (already launched) and donanemab for early Alzheimer’s disease. Both drugs have multibillion dollar sales potential.

However, generic competition for several drugs, rising pricing pressure in the United States mainly on key drug, Trulicity, and price cuts in some international markets like China, Japan and Europe are some top-line headwinds. Estimates have gone down slightly ahead of Q3 results. Lilly has a negative record of earnings surprises in the recent quarters.

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

Shares of Charles Schwab have declined -4.3% over the past year against the Zacks Financial – Investment Bank industry’s decline of -9.5%. The company does not have an impressive earnings surprise history. Its elevated expenses might hamper the company’s bottom-line growth to an extent. A stretched valuation limits the upside potential of the stock.

However, its earnings surpassed the Zacks Consensus Estimate in two and lagged in two of the trailing four quarters. Strategic acquisitions, likely to be earnings accretive, have reinforced Schwab’s position as a leading brokerage player. Offering commission-free trading has led to a rise in client assets and brokerage accounts, thereby improving trading revenues.

The interest rate hikes are expected to aid margin growth. Also, Schwab’s efficient capital deployments reflect a solid balance sheet position, through which it will enhance shareholder value.

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

Other noteworthy reports we are featuring today include Salesforce, Inc. (CRM), Lowe’s Companies, Inc. (LOW), and SAP SE (SAP).

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

Chevron (CVX) to Gain from Massive Permian Acreage

Lilly (LLY) Potential New Products Key to Growth

Strategic Acquisitions Aid Schwab (SCHW) Amid Cost Concerns

Featured Reports

Digital Transformation and Acquisitions Aid Salesforce (CRM)
Per the Zacks analyst, Salesforce is benefiting from ongoing digital transformations and adoption of its cloud services. Moreover, strategic acquisitions like Slack and Tableau are positive.

Lowe’s (LOW) Pro Customer Strategy May Help Lift Sales
Per the Zacks analyst, Lowe’s pro customer strategy, omni-channel efforts and merchandising initiatives may help boost sales. Pro customer sales increased 13% during the second quarter of fiscal 2022.

Solid Momentum in Cloud Business Driving SAP’s Performance
Per the Zacks Analyst, SAP’s performance is gaining from its strengthening cloud business, mainly Rise with SAP solution. However, weak uptake of software licenses and support offerings is a concern.

3M (MMM) Benefits From Pricing Actions Amid Forex Woes
While pricing actions and cost-control measures are supporting 3M’s margin performance, the Zacks analyst is concerned about foreign-exchange woes, which force the company to lower its 2022 forecast.

Investments Aid AES Corp (AES) Amid the Rising Inflation
Per the Zacks Analyst, increased investments in renewables bolsters AES Corporation earnings growth prospects. Yet, the rising inflation resulting in increased expenses remains a bottleneck.

Kirby’s (KEX) Marine Transportation Arm Aids, Fuel Costs Ail
The Zacks analyst is impressed with the performance of Kirby’s Marine Transportation segment. However, high fuel costs are limiting bottom-line growth.

Growing Cloud Deals & Strength in Vantage Aid Teradata (TDC)
Per the Zacks analyst, Teradata is witnessing solid growth in public annual recurring revenues due to rising cloud deals. Strength in Vantage platform is helping it gain momentum among customers.

New Upgrades

lululemon (LULU) Tracks Well with E-commerce Expansion Plans
Per the Zacks analyst, lululemon is heavily investing in e-commerce capabilities like developing sites, transactional omni functionality and fulfilment options to capture the growing online demand.

Arista (ANET) Rides on Scalable Cloud Infrastructure Demand
Per the Zacks analyst, Arista is likely to benefit from solid demand trends, healthy customer additions and continued spending on IT infrastructure products for deployment in cloud environments.

Puma Biotech (PBYI) Rides High on Robust Nerlynx Sales Performance
Per the Zacks analyst, solid performance of its only approved drug, Nerlynx, has fueled growth for Puma Biotech. The label expansion for Nerlynx also looks promising.

New Downgrades

Escalating Costs, Lower Cash Reserves Hurt Pediatrix (MD)
Per the Zacks analyst, a rise in expenses due to higher practice salaries and benefits might dent margins. A weak cash balance can affect the company’s financial flexibility.

Higher Mortgage Rates & Costs to Hurt M.D.C. Holdings (MDC)
Per the Zacks analyst, rising mortgage rates, material cost inflation and continued supply-chain issues have been impacting M.D.C. Holdings’ orders and backlogs.

Softness in Housing Industry Impacts Toll Brothers (TOL)
Per the Zacks analyst, softness in housing industry owing to prevailing supply-chain bottlenecks, labor shortages and rising inflation are hurting Toll Brothers.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Chevron Corporation (CVX) : Free Stock Analysis Report
Salesforce Inc. (CRM) : Free Stock Analysis Report
Eli Lilly and Company (LLY) : Free Stock Analysis Report
Lowe’s Companies, Inc. (LOW) : Free Stock Analysis Report
The Charles Schwab Corporation (SCHW) : Free Stock Analysis Report
SAP SE (SAP) : Free Stock Analysis Report
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