Top stock reports for RTX, Honeywell and Charles Schwab

On December 23, 2024By Littum

Thursday 19 December 2024

Zacks Research Daily presents the best research output from our team of analysts. Today’s Research Daily features new research reports on 16 major stocks, including RTX Corp. (RTX), Honeywell International Inc. (HON) and The Charles Schwab Corp. ( SCHW ), as well as two microcap stocks Steel Partners Holdings LP ( SPLP ) and Better Choice Company Inc. (BTTR). 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 handpicked from the 70 or so reports published by our analyst team today.

You can see all today’s research reports here >>>

RTXs shares have outperformed the Zacks Aerospace – Defense industry over the past year (+39.8% vs -8.8%). The company continues to receive abundant orders for its wide range of battle-proven defense products from the Pentagon and its foreign allies. It won several notable defense awards during the third quarter.

A steadily improving commercial air traffic has strengthened commercial OEM as well as commercial aftermarket sales for the company. RTX has a solid financial position which makes it possible to carry out successful share buybacks.

However, rising crude oil prices tend to put cost pressure on airlines and can affect the operating results of commercial OEMs such as RTX. The company could also be affected if China enforces its announced sanctions against its missile and defense unit. Supply-chain challenges also pose a threat to RTX’s growth.

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

Shares of Honeywell has outperformed the Zacks Diversified Operations industry over the past year (+11.1% vs -7.8%). The company is witnessing strength in commercial aviation and building automation. The aviation segment is particularly strongly driven by robust demand in the aviation aftermarket.

Strong demand across the commercial aviation aftermarket and original equipment companies is helping the aviation segment. The company also continues to reward shareholders, adding to the stock’s appeal. While acquisitions have expanded its product range and geographic reach, they have also increased the company’s balance sheet debt.

Weakness in the Industrial Automation segment due to lower demand for projects is a concern. The weakened demand for their products in sensing and security technologies is also worrying. Given the company’s international exposure, currency conversion remains an overhang.

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

Charles Schwab’s shares are up +5.2% during the year-to-date period versus the Zacks Financial – Investment Bank industry’s gain of +38.0%. As the company deals with low-yielding assets on its balance sheet, it plans to shrink itself to maintain profits and rely more on off-balance sheet arrangements to house deposits. This is likely to put pressure on its top line growth.

Zack’s analyst expects total revenue to grow just 2.6% in 2024. Increased costs will hamper profitability. Although we estimate that the total expenditure will decrease in 2024, it will increase in 2025.

However, falling interest rates will support the expansion of the net interest margin (NIM). Its focus on repaying high-cost bank supplemental funding balances will further help margins. We expect NIM to be 2.13% in 2024. Buyouts have increased the company’s customer assets. We estimate that total client assets will see a CAGR of 8.8% by 2026. Solid capital allocations are another positive.

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

Shares of Steel Partners’ has outperformed the Zacks Diversified Operations industry over the past year (+6.7% vs -7.7%). This $796.20 million market capitalization microcap company shows consistent growth across its diversified operations, driven by strong customer demand, operational efficiency and effective execution.

The company’s robust profitability improvements reflect its focus on cost discipline, margin expansion and increased segment contribution. In addition, its solid balance sheet and deleveraging efforts improve financial flexibility and reduce risks, supporting growth initiatives and investments.

Through disciplined capital allocation, including share buybacks and consistent distributions, Steel Partners reinforces its commitment to delivering shareholder value. With a diversified portfolio, successful acquisition synergies and strengthened financial services profitability, the company is well positioned for sustainable growth and long-term value creation.

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

Better choice shares have underperformed the Zacks Retail – Miscellaneous industry over the past year (-84.8% vs. +10.4%). This $3.73 million market capitalization microcap company relies on the Asia-Pacific region and exposes Better Choice to regulatory, economic and competitive risks, while liquidity concerns persist despite recent capital infusions. Increased costs for marketing and supply chain improvements remain a challenge.

Nevertheless, Better Choice delivered its first profitable quarter in Q3 2024, with adjusted EBITDA above $0.2 million and gross margins of 40%, driven by operational efficiencies and inventory reductions. Strong supply chain performance (97% fill rates) positions the company for sustained growth.

Asia-Pacific remains a key driver, fueled by China’s doubling in pet ownership trends and demand for premium brands such as Halo. The SRx Health acquisition adds scale and enables access to veterinary drugs, increasing diversification. Digital sales took off with double-digit subscription growth and a 20% increase in repeat purchases.

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

Other notable reports we feature today include Chubb Ltd. (CB), Amphenol Corp. (APH) and United Rentals, Inc. (URI).

Mark Vickery
Senior Editor

Note: Sheraz Mian heads Zacks’ Equity Research department and is a well-regarded expert on aggregate earnings. He is often quoted in the print and electronic media and publishes the weekly magazine Earnings trends and Earnings preview reports. If you would like to receive an email notification every time Sheraz publishes a new article, please do click here >>>

Today’s must read

Amid supply chain disruptions, solid order growth helps RTX

Honeywell ( HON ) benefits from strength in the Aerospace segment

Buyouts, Rate Cuts Aid Schwab (SCHW), Trading Revenues Weak

Selected reports

Better Pricing, New Business Growth Drives Chubb Limited (CB)
According to the Zacks analyst, Chubb is poised to grow with better pricing, new business growth and high renewal rates. Still, exposure to catastrophe losses and escalating expenses remain a concern.

End-Market Strength & Diversification Aids Amphenol (APH)
According to the Zacks analyst, Amphenol is benefiting from commercial demand from the aerospace, defense, industrial and mobile end markets. Diversified business model also lowers volatility in individual geographies.

Government spending helps United Rentals (URI) amid macro risks
According to the Zacks analyst, United Rentals is benefiting from strong demand for infrastructure and construction, the Yak acquisition and a diverse fleet. However, the cyclical nature of business is a problem.

TEVA’s new drugs and generic stability are reviving growth
The Zacks analyst believes that newer drugs, Austedo and Ajovy, as well as a stable generic business are reviving its top-line growth.

Jabil ( JBL ) is riding on healthy demand in multiple verticals
According to the Zacks analyst, strength in data center infrastructure, cloud and digital commerce will likely drive Jabil’s top line. Solid growth in free cash flow is a tailwind.

CH Robinson (CHRW) Strong on dividend amid shipping woes
The Zacks analyst is impressed with the company’s efforts to reward shareholders. Weak freight demand and low liquidity represent major headwinds.

Core brands Aid Flowers Foods (FLO) In the middle of a harsh landscape
According to the Zacks analyst, strength in core brands has been the driving force for Flowers Foods amid a tough consumer landscape. Unit sales of Nature’s Own, DKB, Wonder Bread and Canyon Bakehouse grew in the third quarter.

New upgrades

Asset Intelligence Segment Aids Zebra Technologies (ZBRA)
According to the Zacks analyst, higher sales of print solutions and RFID products are driving Zebra Technologies’ Asset Intelligence and Tracking unit. Its shareholder-friendly measures are encouraging.

Healthy Demand for Premier Office Spaces Aids SL Green (SLG)
According to the Zacks analyst, healthy demand for prime office space, a solid tenant base with long-term leases and opportunistic investments to improve portfolio quality bode well for SL Green.

Steady flow of commercial and defense orders helps triumph
According to the Zacks analyst, Triumph Group is winning as orders keep coming from its commercial and military customers. Recovery of commercial air traffic will create new demand and boost TGI’s prospects.

New downgrades

BP faces profit pressure amid falling oil prices in 2025
According to the Zacks analyst, BP’s earnings and cash flow are at risk as Brent crude prices are expected to fall to $74 a barrel by 2025, challenging its financial goals and shareholder payouts.

Weak demand hurts Microchip’s ( MCHP ) top-line outlook
According to the Zacks analyst, Microchip is suffering from weakened demand and a challenging macroeconomic environment. Persistent inflation and high interest rates hurt the outlook.

Soft Retail Pharmacy, Margin Pressure Ails Walgreens (WBA)
The Zacks analyst is concerned that a decline in discretionary spending is hurting Walgreens’ U.S. retail pharmacy arm. Slower generic launches and generic inflation are also weighing on its margins.

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