The Zacks Analyst Blog Highlights Walmart, Southern Company, Intercontinental Exchange and IDT

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 Walmart Inc., The Southern Company and Intercontinental Exchange, Inc., as well as a micro-cap stock IDT 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 >>>

Walmart’s shares have outperformed the Zacks Retail – Supermarkets industry over the past year (+52% vs. +50%). The company is benefiting from its diverse business model that spans multiple segments, channels and formats. The company’s strong omnichannel strategy has boosted traffic across both physical stores and digital platforms.

Its emphasis on improving delivery services has been successful, contributing to steady grocery market-share gains. Upsides like these, along with growth in the advertising business, have fueled second-quarter fiscal 2025 results, wherein the top and bottom lines grew year over year, and e-commerce sales surged.

However, the retail landscape remains dynamic due to challenges like inflation and volatile consumer spending. High operating costs are also a concern. While Walmart raised its fiscal 2025 view, its modest growth targets for the third quarter reflect a cautious approach.

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

Shares of Southern Co. have outperformed the Zacks Utility – Electric Power industry over the past year (+32.2% vs. +22.9%). The company is leveraging the demographics of its operating territories — as in healthy population and job growth — and it has gradually increased its customer base.

With good rate-base growth, constructive regulation and with the power supplier’s recent success in bringing the Vogtle nuclear project online, Southern is expected to generate steady earnings and dividend growth going forward.

However, the utility’s high leverage restricts financial flexibility, while an increased focus on nuclear energy could face opposition amidst growing environmental concerns. As it is, the utility sector remains sensitive to interest rate fluctuations and market sentiment. Therefore, Southern Company warrants a cautious stance from the investors.

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

Intercontinental Exchange’s shares have outperformed the Zacks Securities and Exchanges industry over the past year (+45.2% vs. +26%). The company’s top line benefits from its compelling product and service portfolio, the broad range of risk management services and strength in global data services. Continued strength in its energy franchise and improving recurring market data revenues are likely to keep growth on track.

Strategic buyouts help it achieve cost synergies that are in sync with its aim of generating long-term value for shareholders. It is well-poised for growth due to accelerated digitization in the U.S. residential mortgage industry. Intercontinental Exchange also engages in the effective deployment of capital.

However, expenses are likely to remain high in the near term. Foreign currency fluctuations and stricter regulations raise concerns. High interest expenses and high leverage pose risk.

(Youcanread the full research report on Intercontinental Exchange here >>>)

Shares of IDT have outperformed the Zacks Diversified Communication Services industry over the past year (+61.4% vs. +2.6%). This microcap company with market capitalization of $1.17 billion has growth strategy centers on high-growth segments like NRS, BOSS Money, and net2phone, which are expanding in digital payments, international remittances, and cloud communications.

NRS achieved 42% fourth-quarter fiscal 2024 revenue growth, while BOSS Money saw a 41% transaction volume increase in fiscal 2024 and generated positive EBITDA. IDT’s cost controls boosted profitability, with a 12.7% fiscal fourth-quarter gross profit increase. Positioned in digital and cashless payment trends, IDT leverages BOSS Money and NRS’s strong merchant network, though competition and regulatory compliance pressures may impact profitability.

The legacy communications segment’s decline and fintech competition pose challenges for sustaining revenue growth. Other challenges include regulatory pressures, currency volatility and scaling investments.

(You canread the full research report on IDT here >>>)