Zacks Analyst Blog Highlights Home Depot, Philip Morris, IBM, NVIDIA and Delta Air Lines

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 The Home Depot, Inc., Philip Morris International Inc. and IBM Corp. These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

Shares of Home Depot have lagged rival Lowe’s (+4.3% vs. +17.5%) and the broader market (+4.3% vs. +20.1% for the S&P 500 index) in the year-to-date period, reflecting worries about the retailer’s exposure to cyclical forces.

That said, the company has been witnessing significant benefits from the execution of the “One Home Depot” investment plan, which focuses on expanding supply chain facilities, technology investments and enhancement to the digital experience.

The interconnected retail strategy and underlying technology infrastructure have helped consistently boost web traffic for the past few quarters. The company remains on track with its strategic investments to build a Pro ecosystem.

However, HD posted dismal first-quarter fiscal 2023 performance. Results were impacted by a more broad-based pressure across the business, driven by softened demand versus expectations. A deflation in lumber prices and unfavorable weather have also hurt the results. HD also provided a conservative view for fiscal 2023.

Shares of Philip Morris have outperformed the Zacks Tobacco industry over the past year (+7.0% vs. +5.0%). The company has been benefiting from its solid pricing power. Higher pricing variance was an upside to the company’s performance in the second quarter of 2023 and is likely to remain a driver.

A focus on reduced-risk products, especially IQOS, has been working well for the company, which is witnessing a continued product mix shift from cigarettes to smoke-free products. These upsides are likely to boost organic revenues in the full-year 2023.

However, Philip Morris has been battling cost-related headwinds. The company expects to make additional growth-oriented investments in 2023, which may impact margins. Also, soft cigarette shipment volumes and volatile currency movements have been concerns. In full-year 2023, cigarette shipment volumes are expected to decline by 1.5-2.5%.

Shares of IBM have outperformed the Zacks Computer – Integrated Systems industry over the past year (+15.7% vs. +12.3%). The company is witnessing solid net sales growth in the software segment driven by healthy hybrid cloud adoption and solid demand trends across RedHat, automation, data in AI and security.

Strong foundation of research and innovation, a broad portfolio that caters to various industry requirements and diverse global market presence set it apart from its competitors. IBM is also poised to benefit from the Watsonx platform.

However, declining trends in the infrastructure vertical are hurting top-line growth. Intense competition from other established players in cloud services is putting pressure on margins. A highly-leveraged balance sheet and integration risk due to frequent acquisitions are other concerns.

Other noteworthy reports we are featuring today include NVIDIA Corp. and Delta Air Lines, Inc.

International Business Machines Corporation (IBM): Free Stock Analysis Report

Delta Air Lines, Inc. (DAL): Free Stock Analysis Report

Philip Morris International Inc. (PM): Free Stock Analysis Report

NVIDIA Corporation (NVDA): Free Stock Analysis Report

The Home Depot, Inc. (HD): Free Stock Analysis Report

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