Top Stock Reports for Netflix, Honeywell International & RTX

Wednesday, October 25, 2023

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 Netflix, Inc. (NFLX), Honeywell International Inc. (HON) and RTX Corp. (RTX). 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 >>>

Netflix shares have outperformed the Zacks Broadcast Radio and Television industry over the year-to-date period (+41.1% vs. +17.4%). The company added 1.88 million paid subscribers globally in third-quarter 2023 compared with 1.43 million paid subscribers added in the year-ago quarter.

Netflix continues to dominate the streaming space, courtesy of its diversified content portfolio, which is attributable to heavy investments in the production and distribution of localized and foreign-language content. Crackdown on password-sharing and the introduction of paid sharing in more than 100 countries, is also expected to aid growth.

The average revenue per membership declined as Netflix continues to face stiff competition in the streaming space from the likes of Apple, Amazon Prime Video, Disney+, Peacock and Paramount+. Netflix’s leveraged balance sheet and higher streaming obligation are also concerns.

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

Shares of Honeywell International have underperformed the Diversified Operations industry over the past year (-3.7% vs. -0.1%). The company is witnessing supply-chain issues. Weakness in the Safety and Productivity Solutions unit due to lower warehouse, and workflow and productivity solutions volumes is worrisome. Raw material cost inflation and adverse foreign currency movements are other concerns.

Nevertheless, Recovery in commercial flight hours, strength in process solutions and UOP businesses augur well for Honeywell. Solid operational execution, pricing actions and cost-control measures continue to drive the company’s top line. HON’s bullish forecast for 2023 holds promise.

Handsome rewards to shareholders add to the stock’s appeal. HON’s recent acquisition of Compressor Controls enhances its expertise in industrial control, automation and process solutions.

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

Shares of RTX have underperformed the Aerospace – Defense industry over the year-to-date period (-20.4% vs. -14.7%). The appreciating U.S. dollar has been burdening airlines, which may hurt the stock. Also, removals and inspections of engines from A32neo might increase costs for RTX. It may also be affected if China enforces its announced sanctions against RTX’s missile and defense unit.

Nevertheless, thanks to its wide range of combat-proven defense products, RTX continues to receive ample orders from the Pentagon and its foreign allies, which, in turn, bolsters its backlog count.

A steady recovery in commercial air traffic is boosting commercial OEM as well as commercial aftermarket sales for RTX. The stock holds a solid solvency position.

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

Other noteworthy reports we are featuring today include Medtronic plc (MDT), Marsh & McLennan Companies, Inc. (MMC) and Eaton Corp. plc (ETN).

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

Netflix (NFLX) Benefits from Paid Sharing & Robust Portfolio

Aerospace Unit Aids Honeywell (HON) Amid Supply-Chain Woes

Order Growth Continues to Aid RTX, Amid Jet Fuel Price Hike

Featured Reports

Medtronic (MDT) Gains in Market Share, Global Growth Robust
The Zacks analyst is impressed that despite macro-economic issues, Medtronic is reporting market share gains across core businesses. Non-U.S. developed and emerging markets expansions remain strong.

Strategic Buyouts Aid Marsh & McLennan (MMC), Expenses Hurt
Per the Zacks analyst, numerous acquisitions help Marsh & McLennan expand geographically, boost current segments and develop new businesses. However, rising expenses remain a concern.

New Product Development, Wide Market Reach Aid Eaton (ETN)
Per the Zacks analyst Eaton’s operations in 175 countries across the world and development of new products through ongoing R&D investments will continue to drive demand and boost profitability.

Transco Pipeline System Aids Williams (WMB) Amid Debt Woes
While Williams’ expansion projects for its core Transco system of pipelines should buoy its revenues and cash flows, the Zacks analyst is worried over the high long-term debt load of $21.5 billion.

Universal Display (OLED) Rides on Robust Portfolio, Solid Demand
Per the Zacks analyst, Universal Display will likely gain from growing demand for OLED solutions driven by emerging use cases in automotive, foldable smartphones and other electronic devices.

Strong Sales for Empaveli Drives Apellis’ (APLS) Revenues
Per the Zacks analyst, Apellis’ first marketed drug, Empaveli, is witnessing consistent sales growth in the United States. The drug is also being developed for other indications which hold promise.

Premium Office-Space Demand to Aid Cousins Properties (CUZ)
Per the Zacks Analyst, Cousins Properties’ Sun Belt-focused portfolio of class A office properties is poised to benefit from the robust demand for top-quality office spaces with class-apart amenities.

New Upgrades

Honda Motor (HMC) to Gain from Collaborations & Cost Control
Per the Zacks analyst, Honda’s joint venture with GAC and Dongfeng is set to boost its electric push in China, while cost-control efforts would divert savings towards more profitable opportunities.

Logitech (LOGI) Gains on Lower Component & Operating Costs
Per the Zacks analyst, Logitech’s bottom-line performance is likely to continue benefiting from reduced component costs, lesser reliance on expedited shipping and disciplined expense management.

Dycom (DY) Rides on Solid Telecommunications Business Growth
Per the Zacks analyst, Dycom is benefiting from increased demand for network bandwidth and mobile broadband. Also, new contracts and Engineering & Construction investments bodes well.

New Downgrades

Cybersecurity concerns and Seasonality Trouble Equifax (EFX)
Per the Zacks analyst, Equifax continues to face the aftermath of cybersecurity in the form of considerable accrued legal expenses. Seasonality affects Equifax’s revenue streams.

Investments in Specialized Distribution to Aid FEMSA (FMX)
Per the Zacks analyst, FEMSA has been on track with its strategy of creating a national distribution platform in the United States, through the expansion in the specialized distribution industry.

Weak European Macro Environment Key Concern for Revvity (RVTY)
Per the Zacks analyst, lackluster academic end market in Europe, coupled with issues related to third party logistics provider in have been negatively impacting organic revenue growth of the company.

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