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Top Analyst Reports for Walt Disney, TJX & Canadian Pacific

Monday, August 15, 2022

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including The Walt Disney Co. (DIS), The TJX Companies, Inc. (TJX) and Canadian Pacific Railway Ltd. (CP). 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 >>>

Walt Disney shares have declined -32.1% over the past year against the Zacks Media Conglomerates industry’s decline of -28.2%. The company’s profitability was negatively impacted by higher programming and production costs across Disney+, ESPN+ and Hulu. Disney’s leveraged balance sheet remains a concern.

Nevertheless, third-quarter fiscal 2022 results reflected strength in Disney+ and revival in Parks, Experiences and Products businesses. The company benefits from the growing popularity of Disney+, owing to a strong content portfolio and a cheaper bundle offering. Availability in the Nordics, Latin America and other Asian territories is helping it expand its user base.

Theme Park business is likely to gain from strong demand across both the domestic and international parks. Per capita spending increased 10% year over year, while occupancy at domestic hotels was 90% in the fiscal third quarter.

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

TJX shares have declined -5.3% over the past year against the Zacks Retail - Discount Stores industry’s decline of -1.8%. The company is battling higher freight costs, which hurt its merchandise margin in the first quarter. For fiscal 2023, management is projecting 150-160 basis points incremental freight expense.

The company is also grappling with higher selling, general and administrative expenses, which was witnessed in the fiscal first quarter. TJX’s off-price business model, strategic store locations, impressive brands and fashion products are upsides.

Further, its Marmaxx division delivered comp-store sales growth of 3% in the first quarter of fiscal 2023, driven by increased customer traffic. It has been benefiting from its solid store and e-commerce growth efforts. Its treasure hunt shopping experience is gaining traction among shoppers.

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

Canadian Pacific Railway shares have outperformed the Zacks Transportation - Rail industry over the past year (+14.6% vs. +7.3%). The buyout of Kansas City Southern, completed last year, is a huge positive and should aid results in the coming quarters. Canadian Pacific's efforts to pay out dividends to its shareholders even in such challenging times also deserve praise.

However, the company’s dispute over the pay-related contract with a labour union, the Teamsters Canada Rail Conference (TCRC) — Train and Engine Negotiating Committee — induced a work stoppage at Canadian Pacific. The disruption worsened the already bad supply-chain situation in Canada.

The strike disrupted shipments of key items like grains and fertilizer. Thankfully, the work stoppage ended on Mar 22 following an agreement between the company and TCRC to enter into binding arbitration. Increasing fuel expenses (up 69.7% year over year in second-quarter 2022) are hurting the bottom line.

(You can read the full research report on Canadian Pacific Railway here >>>)

Other noteworthy reports we are featuring today include Air Products and Chemicals, Inc. (APD), Dow Inc. (DOW) and Pembina Pipeline Corp. (PBA).

Mark Vickery
Senior Editor

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

Disney+ Growth & Revival of Parks Business Aids Disney (DIS)

TJX Companies' (TJX) Marmaxx Unit Solid, Freight Costs High

Canadian Pacific's (CP) Dividends Support, Fuel Costs Sting

Featured Reports

Project Investments, Productivity to Aid Air Products (APD)
While Air Products faces headwinds from higher power and fuel costs, it should gain from investments in high-return industrial gas projects and productivity actions, per the Zacks analyst.n

Dow (DOW) Gains on Cost Actions, Project Investment
Per the Zacks analyst, Dow will gain from cost synergy savings and productivity actions and its investment in high-return growth projects amid headwinds from raw material and logistical constraints.

Pembina (PBA) to Benefit from Integrated Business Model
The Zacks analyst believes that Pembina Pipeline's integrated business model makes it less exposed to the volatile commodity market but is worried about the midstream firm's high debt burden.

Strong Demand for 5G & Wi-Fi 6 Aids Skyworks' (SWKS) Growth
Per Zacks analyst, Skyworks' growing clout in the connectivity solutions and 5G market is a positive. Higher demand for Wi-Fi 6 solution is a key catalyst.

Land Acquisition Move Aids PulteGroup (PHM) Amid Inflation
Per the Zacks analyst, land acquisition strategies and focus on entry-level buyers help PulteGroup to drive growth. Yet, supply-chain issues, material cost inflation and higher wage are concerns.

New Upgrades

Solid Top Line, Strong Cash Flows Aid Unum Group (UNM)
Per the Zacks analyst, its strong revenues driven by higher overall persistency, disciplined sales trends have led to significant growth. Moreover, healthy balance sheet should drive long-term growth.

Solid Contract Sales Boosts Marriott Vacations (VAC) Prospects
Per the Zacks analyst, Marriott Vacations' is likely to benefit from solid contract sales digital initiative and vacation ownership business. Also focus on Owner benefit and exchange program bode well

New Downgrades

Stiff Competition, Forex Woes Continue to Ail Avanos (AVNS)
The Zacks analyst is worried about Avanos facing fierce competition in particular product category and the individual markets for these products. Unfavorable currency movement is an added issue.

Soft Hard Seltzer Ail Boston Beer's (SAM) Performance
Per the Zacks analyst, Boston Beer has been reeling under slowed growth trends in hard seltzer for some time now. As a result, Q2 revenues in the category declined 13% year over year.


Zacks Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.

This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.

Free: See Our Top Stock and 4 Runners Up >>

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
 
Air Products and Chemicals, Inc. (APD): Free Stock Analysis Report
 
The TJX Companies, Inc. (TJX): Free Stock Analysis Report
 
Dow Inc. (DOW): Free Stock Analysis Report
 
The Walt Disney Company (DIS): Free Stock Analysis Report
 
Canadian Pacific Railway Limited (CP): Free Stock Analysis Report
 
Pembina Pipeline Corp. (PBA): Free Stock Analysis Report
 
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