The Zacks Analyst Blog Highlights Coca-Cola, Chevron, ServiceNow, Sypris Solutions and Mobile Infrastructure

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 Coca-Cola Co., Chevron Corp. and ServiceNow, Inc., as well as two micro-cap stocks Sypris Solutions, Inc. and Mobile Infrastructure Corp. The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.

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 >>>

Coca-Cola’s shares have outperformed the Zacks Beverages – Soft drinks industry over the year-to-date period (+25.2% vs. +13.7%). The company experiences positive business trends, as evidenced by its strong track record of beating expectations. In second-quarter 2024, the company exceeded sales and earnings estimates for the sixth consecutive quarter, with both metrics showing year-over-year improvement.

Strong revenue growth across most operating segments, supported by improved price/mix and unit volume growth aided results. KO is well-poised to benefit from innovations and growing digital investments. It has provided an optimistic view for 2024. The Zacks analyst expect organic revenue growth of 10% for 2024, with an 8.3% positive price/mix and a 1.7% rise in concentrate sales.

However, Coca-Cola faces inflationary cost pressures due to higher commodity and material costs, as well as increased marketing investments.

(You can read the full research report on Coca-Cola here >>>)

Shares of Chevron have underperformed the Zacks Oil and Gas – Integrated – International industry over the past six months (-3.2% vs. -1.6%). The company is grappling with high sensitivity to oil price fluctuations and relatively expensive valuation.

Another concern is the sub-100% reserve replacement ratio, indicating challenges in replenishing produced energy. Considering all these factors, investors are advised to wait for a better entry point.

Nevertheless, Chevron is positioned as one of the top global integrated oil firms, set for sustainable production growth, particularly due to its dominant position in the lucrative Permian Basin. Further, the planned acquisition of Hess Corporation is expected to significantly strengthen Chevron’s presence in oil-rich Guyana.

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

ServiceNow’s shares have outperformed the Zacks Computers – IT Services industry over the year-to-date period (+33.7% vs. +8.6%). The company has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation. It had 1,988 total customers with more than $1 million in annual contract value (ACV) at the end of second quarter, which represents 15% year-over-year growth in customers.

ServiceNow had 14 deals greater than $5 million in net new ACV and four deals of more than $10 million. It closed 88 deals greater than $1 million net new ACV. Generative AI deals continued to gain traction with net new ACV for Now Assist and was part of 11 deals worth more than $1 million in the reported quarter.

It is riding on an expanding partner base. However, ServiceNow is suffering from persistent inflation, stiff competition, and a challenging macroeconomic environment.

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

Shares of Sypris Solutions have underperformed the Zacks Electronics – Miscellaneous Services industry over the past year (-11.7% vs. +10.8%). This microcap company with market capitalization of $37.91 million is facing high operating costs, revenue concentration in Sypris Technologies, increased debt, and supply chain challenges which pose risks. Currency exchange risks could impact profitability.

Nevertheless, Sypris Solutions’ long-term contract extension with a global truck OEM secures a stable revenue stream and solidifies a 25-year relationship. In defense, Sypris Electronics’ new orders under a multi-year contract for the U.S. Navy’s electronic warfare program highlight its role in high-reliability electronics, with the potential for additional orders.

Sypris Solutions benefits from growth in the aerospace and defense electronics markets. Sypris reported a 23% revenue increase in the Sypris Electronics segment, reflecting operational efficiency. Diversification into automotive, off-highway, and oil and gas sectors reduces dependence on the commercial vehicle market.

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

Mobile Infrastructure’s shares have underperformed the Zacks Real Estate – Operations industry over the past year (-19.8% vs. +33.8%). This microcap company with market capitalization of $107.21 million is facing risks which include $93.1 million in near-term debt maturities, interest rate exposure and ongoing preferred stock conversion pressure.

Nevertheless, Mobile Infrastructure’s revenues grew 28.4% year over year in second-quarter 2024, driven by converting leases to management contracts, which enhanced transparency and cost management, resulting in net operating income (NOI) growth of 14% to $5.6 million.

Mobile Infrastructure is well-positioned for long-term growth, especially in markets converting office spaces to residential units, which is expected to boost parking demand by 2025. Its 42-property portfolio, located in stable Midwest and Southwest regions, supports consistent revenue amid low competition. Despite a $2.5 million second-quarter net loss, the undervalued stock has strong Net Asset Value (NAV) support of $7.25 per share.

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