Top Analyst Reports For Exxon Mobil, PepsiCo & HSBC

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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 Exxon Mobil Corporation (XOM), PepsiCo, Inc. (PEP) and HSBC Holdings plc (HSBC). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

Exxon Mobil shares have outperformed the Zacks Oil and Gas - Integrated - International industry over the past year (+5.4% vs. +4.9%). The company being a reliable player in the energy sector, boasts a resilient integrated capital structure and a track record of prudent CAPEX management. Its strategic discoveries in the Stabroek Block and Permian Basin promise growth and lower greenhouse gas intensity.

With a robust balance sheet, ExxonMobil prioritizes shareholder returns, evidenced by substantial buybacks and a strategic acquisition of Pioneer Natural Resources. XOM reported better-than-expected quarterly earnings due to increased liquids production.

However, challenges loom, notably in upstream operations susceptible to volatile oil prices and regulatory hurdles like the $2B impairment in California. While committed to shareholders, XOM faces scrutiny for lagging industry peers in dividend yield and enduring financial strain from low-return investments and pandemic impacts.

Shares of PepsiCo have underperformed the Zacks Beverages - Soft drinks industry over the past year (-2.1% vs. +7.4%). The company banks on strength and resilience in its categories, diversified portfolio, modernized supply chain, improved digital capabilities, flexible go-to-market distribution systems and robust consumer demand trends.

These factors along with robust pricing aided PepsiCo’s earnings and organic revenues fourth-quarter 2023. The company witnessed organic revenue growth across the global beverage and convenient food businesses. Additionally, the company’s productivity and cost-management initiatives bode well. For 2024, PEP expects to deliver organic revenues revenue growth of at least 4%.

However, PepsiCo witnessed soft volume trends across both businesses, which impacted reported revenues in the fourth quarter. Adverse currency rates also remain headwinds.

Shares of HSBC have gained +16.0% over the past year against the Zacks Banks - Foreign industry’s gain of +27.7%. The company’s strong capital position, higher interest rates, an extensive network and business restructuring initiatives will keep supporting HSBC. The company is winding down its retail operations in Canada and is in the process of fully exiting Russia (gets Russia unit sale approval).

In order to focus more on Asia, the company is set to acquire Citigroup’s wealth business in China. However, HSBC’s fourth-quarter 2023 results were hurt by lower revenues. While its efforts to improve market share in the Asia region will aid financials in the long run, it might lead to a rise in near-term costs.

Because of its growth strategy and higher technology-related expenses, HSBC expects 2024 expense growth of 5%. The current tough macroeconomic backdrop is another near-term headwind.

Other noteworthy reports we are featuring today include Cadence Design Systems, Inc. (CDNS), CrowdStrike Holdings, Inc. (CRWD) and Vulcan Materials Company (VMC).


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