Share to Twitter Share to Linkedin We believe that Caterpillar stock (NYSE: CAT) is a better pick than the pharmaceutical giant Eli Lilly stock (NYSE: LLY), given its better prospects. Although these companies are from different sectors, we compare them because they have similar operating incomes of $8-$9 billion. The decision to invest often comes down to finding the best stocks within the parameters of certain characteristics that suit an investment style. The size of profits can matter, as larger profits can imply greater market power. Since these stocks are from different sectors, comparing P/S against one another may not be helpful. We compare their current multiples with the historical ones in the sections below. Looking at stock returns, LLY stock has fared better, with a 19% rise in the last twelve months, compared to a 4% rise for CAT and an 8% decline for the broader S&P500 index. There is more to the comparison, and in the sections … [Read more...] about Caterpillar Stock Appears To Be A Better Pick Over This Pharmaceuticals Giant
Goldman Sachs Stock Is Trading Below Its Intrinsic Value
Share to Twitter Share to Linkedin Goldman Sachs’ stock (NYSE: GS) has lost approximately 6% YTD as compared to the 2% rise in the S&P500 index over the same period. Further, at its current price of $322 per share, it is trading 19% below its fair value of $396 – Trefis’ estimate for Goldman Sachs’ valuation . The investment bank posted lower-than-expected results in the fourth quarter of 2022, missing both revenues and earnings consensus estimates. The total revenues decreased 16% y-o-y to $10.59 billion, mainly driven by a 48% drop in investment banking and a 27% decline in asset & wealth management businesses. The investment banking was primarily down due to lower underwriting revenues – equity underwriting (-82%) and debt underwriting (-70%), driven by lower deal volumes. Similarly, asset & wealth management suffered due to a sharp decline in net income from equity investments and debt investments. That said, the platform solutions and FICC … [Read more...] about Goldman Sachs Stock Is Trading Below Its Intrinsic Value
Should You Buy Corning Stock Over Its Sector Peer?
Share to Twitter Share to Linkedin We believe that Corning stock (NYSE: GLW) is currently a better pick over its sector peer Cisco stock (NASDAQ NDAQ : CSCO), given its better prospects and a relatively lower valuation of 2.1x trailing revenues vs. 3.9x for Cisco. This valuation gap can be attributed to Cisco’s superior profitability and lower financial risk, as discussed below. Looking at stock returns, both of them have declined 12% in the last twelve months, aligning with the 11% fall for the broader S&P500 index. There is more to the comparison, and in the sections below, we discuss why we believe GLW stock will offer better returns than CSCO stock in the next three years. We compare a slew of factors, such as historical revenue growth, returns, and valuation, in an interactive dashboard analysis of Corning vs. Cisco : Which Stock Is A Better Bet? Parts of the analysis are summarized below. 1. Corning’s Revenue Growth Is Better … [Read more...] about Should You Buy Corning Stock Over Its Sector Peer?
Why Did Norfolk Southern Stock Fall 30% Since 2021?
Share to Twitter Share to Linkedin After a 17% fall, year-to-date, Norfolk Southern stock (NYSE: NSC) has some room for growth, in our view. NSC stock has declined from $248 in early January to around $205 now. The YTD 17% fall for Norfolk Southern NSC marks an underperformance with the 2% returns for the broader S&P500 index. The recent fall for Norfolk Southern can be attributed to the derailment of a train carrying toxic materials in East Palestine, Ohio last month. Ohio state has sued Norfolk Southern over the incident. Looking at a slightly longer term, NSC stock is down 31% from levels seen in late 2021. This can be attributed to 1. the company’s P/S ratio, which plunged 42% to 3.7x trailing revenues, from 6.4x in 2021, partly offset by 2. a 14% rise in Norfolk Southern’s revenue to $13 billion, and 3. its average shares outstanding falling 4% to 231 million, driven by share repurchases of $3 billion. Our interactive dashboard, … [Read more...] about Why Did Norfolk Southern Stock Fall 30% Since 2021?
Adobe Stock Topped The Consensus In Q1, What’s Next?
Share to Twitter Share to Linkedin Adobe’s stock (NASDAQ NDAQ : ADBE DBE ) has lost 1% YTD as compared to the 1% rise in the S&P500 index over the same period. Further, ADBE stock is currently trading around $334, which is 14% below its fair value of $388 – Trefis’ estimate for Adobe’s valuation . The company posted better-than-expected results in the first quarter of FY2023 (Dec 3, 2022 - March 3, 2023), with revenues increasing 9% y-o-y to $4.66 billion. It was driven by a 9% increase in digital media, followed by a 12% rise in the digital experience segments. The digital media business benefited from an 8% y-o-y improvement in the creative cloud and a 13% rise in the document cloud sub-categories. Notably, the subscription-based revenues increased 10% y-o-y to $4.37 billion. On the cost front, the operating expenses as a % of revenues witnessed an unfavorable increase in the quarter, leading to a marginal drop in the net income to $1.25 … [Read more...] about Adobe Stock Topped The Consensus In Q1, What’s Next?
Is Pfizer Stock Undervalued At $40?
Share to Twitter Share to Linkedin Pfizer stock (NYSE: PFE) has seen a fall of 21% this year, compared with 2% returns for the broader S&P500 index. Pfizer PFE stock has been weighed down due to an anticipated decline of over 30% in its 2023 sales, primarily due to lower sales of its Covid-19 products. The company expects its Comirnaty and Paxlovid combined sales to be $21.5 billion in 2023, vs. the $56.7 billion they generated in 2022. Pfizer’s revenue rose at an average annual rate of 40% to $100 billion in 2022, compared to $41 billion in 2019, primarily driven by a very high demand for the Covid-19 vaccine and the antiviral pill. Although the demand for Covid-19 products is expected to decline meaningfully in 2023, Pfizer expects 2023 to be the low point and sales of Covid-19 products to rise from 2024. Pfizer’s other products, including Eliquis (alliance revenue), Vyndaqel, and Prevnar, will likely see steady sales growth with market share … [Read more...] about Is Pfizer Stock Undervalued At $40?
What Is Driving Growth For Abbott Stock?
Share to Twitter Share to Linkedin After a 10% fall year-to-date, at the current levels, Abbott stock (NYSE: ABT) has room for growth, in our view. ABT stock fell from $110 in early January to $99 now. The YTD -10% return for ABT marks an underperformance with the broader S&P500 index, up 4%. The recent fall of ABT stock can partly be attributed to the ongoing investigation by the SEC and the FTC for Abbott’s baby formula products. Looking at a slightly longer term, ABT stock is up 37% from levels seen in late 2018, compared to a 60% rise in the broader S&P500 index. This 37% rise for ABT can be attributed to 1. Abbott’s Revenue , which grew a solid 43% to $44 billion over the last twelve months, compared to $31 billion in 2018, 2. a 1.3% fall in its total shares outstanding to 1.8 billion currently, partly offset by 3. the company’s P/S ratio, which fell 5% to 4.0x trailing revenues, from 4.2x in 2018. Our dashboard – Why Abbott Stock … [Read more...] about What Is Driving Growth For Abbott Stock?
What’s Happening With Motorola Solutions Stock?
Share to Twitter Share to Linkedin Motorola Solutions Inc. (NYSE: MSI) - one of the largest suppliers of land-mobile-radio solutions - has seen its stock outperform. The stock remains up by about 4% year-to-date, while it has gained about 16% over the last 12 months. This compares to the S&P 500 which remains down by 10% over the past 12 months. So what’s driving the outperformance? Demand for MSI’s products has been strong despite a broader slowdown in the economy. Over Q4 2022, the most recently reported quarter, MSI saw revenue beat estimates, growing by almost 17% year-over-year to $2.7 billion, driven primarily by higher land mobile radio and video security and access control sales. Adjusted earnings also jumped by 26% to $3.60 per share. Moreover, Wall Street has also been quite positive on the stock, while macro tailwinds such as slower interest rate hikes by the Fed and signs of cooling inflation also appear to have helped. For 2023, Motorola … [Read more...] about What’s Happening With Motorola Solutions Stock?
SLB Stock Looks Attractive At $46
Share to Twitter Share to Linkedin After an 11% decline over the last week, at the current price of around $46 per share, we believe SLB’s stock (NYSE: SLB), formerly known as Schlumberger, which provides oil field services including drilling, completion, and production solutions to upstream oil & gas companies in the U.S. and abroad - could see gains in the longer term. SLB stock has declined from around $52 to $46 in the last five days, as the Brent crude fell to around the level of $73, which was also a 15-month low. This was due to the fallout of the banking sector and the European Central Bank rate hike. Oil is falling as straight-line parallels are drawn to prior bank sector-driven recessions, particularly the 2008 financial crisis. Having said that, the short-term trend for oil will depend upon the level of market angst. But, we believe that the company’s fundamentals remain strong, which will likely pave the way for longer-term gains. As such, the … [Read more...] about SLB Stock Looks Attractive At $46
What’s Happening With Juniper Stock?
Share to Twitter Share to Linkedin Juniper , a company that sells networking products, including routers, switches, network management software, network security products, and software-defined networking technology, has seen its stock underperform a bit, falling by about 2% year-to-date, compared to the S&P 500 which remains up by 2% over the same period. There are a couple of factors impacting the stock. Firstly, recent earnings from the company have been mixed. For Q4 2022, while earnings were in line with estimates at $0.65 per share, revenues missed estimates, although they rose by 11.5% year-over-year to $1.45 billion. Moreover, investors have also been a bit concerned about the broader macro environment, with customers getting more cautious about their spending. This could impact IT budgets to an extent, hurting networking solutions vendors such as Juniper. So what’s the outlook like for Juniper stock? There are a couple of tailwinds that we see … [Read more...] about What’s Happening With Juniper Stock?