Wednesday, June 10, 2026
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 Merck & Co., Inc. (MRK), The Southern Co. (SO) and Lumentum Holdings Inc. (LITE), as well as a micro-cap stock Peoples Bancorp of North Carolina, Inc. (PEBK). 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 >>>
Ahead of Wall Street
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You can read today's AWS here >>> CPI Inflation Rate +4.2%: Hottest in 3 Years
Today's Featured Research Reports
Merck’s shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+53.3% vs. +25.2%). The company’s blockbuster drug, Keytruda, and new products have been driving sales. Animal Health is also contributing to growth. Though Keytruda will lose patent exclusivity in 2028, its sales are expected to remain strong until then.
Merck’s new products, Winrevair, Welireg and Capvaxive, key pipeline progress and expansion of its respiratory and infectious disease and oncology portfolios through the acquisitions of Verona Pharma, Cidara Therapeutics and Terns Pharmaceuticals have improved its long-term growth prospects. This progress has increased confidence that Merck can maintain growth even after Keytruda loses exclusivity.
However, it faces several near-term challenges, including persistent challenges for Gardasil in China, potential competition for Keytruda, and rising competitive and generic pressure on some of its drugs.
(You can read the full research report on Merck here >>>)
Shares of Southern Company have gained +7.1% over the past year against the Zacks Utility - Electric Power industry’s gain of +23.2%. The company is a leading U.S. electric utility with a stable, recession-resistant business model, benefiting from strong electricity demand growth, particularly from data centers and hyperscale customers, and a robust pipeline exceeding 75 gigawatts of potential projects.
Southern Company is expanding its regulated generation and transmission assets, investing in battery storage and renewable projects, and maintaining a 25-year streak of dividend increases, appealing to income-focused investors.
However, elevated leverage with $67.1 billion in long-term debt, capital-intensive infrastructure needs, exposure to economic slowdowns, regulatory risks, ongoing depreciation charges, and weather-driven earnings volatility limit financial flexibility. Hence, investors are advised to wait for a better entry point.
(You can read the full research report on Southern Company here >>>)
Lumentum’s shares have outperformed the Zacks Communication - Components industry over the past year (+968.3% vs. +313.6%). The company is benefiting from sustained AI and cloud network buildouts, with record fiscal Q3 revenue and expanding profitability as laser chips and cloud transceivers scale.
Management’s Q4 outlook calls for another step up in revenue and operating margin, supported by continued EML growth, scale-across components like pump and narrow linewidth lasers, and a ramp in 1.6T transceivers with initial internal CW laser integration. A multiyear OCS purchase agreement and the acquisition of an additional indium phosphide fab, backed by a larger cash balance, extend capacity and visibility, while CPO development moves toward revenue.
However, supply constraints and outsourcing dependence can delay shipments, and ongoing ASP and customer concentration risks remain a headwind. Industrial lasers remain muted and can dilute the mix.
(You can read the full research report on Lumentum here >>>)
Shares of Peoples Bancorp of North Carolina have outperformed the Zacks Banks - Southeast industry over the past year (+66.1% vs. +15.4%). This microcap company with a market capitalization of $236.97 million has its investment thesis supported by improving earnings power, driven by balance-sheet management, loan growth and a stable deposit franchise. Margin expansion reflects effective asset-liability management and favorable funding dynamics, while loan growth continues to support revenue generation.
Strong capital levels and a conservative dividend policy provide flexibility to support future growth and shareholder returns. However, key risks include rising operating expenses, potential margin compression from higher funding costs and higher credit costs tied to portfolio growth.
Fee income remains sensitive to appraisal-related activity. Valuation reflects investor caution around the sustainability of earnings growth and credit performance. Further upside will depend on sustaining profitability, maintaining credit quality and delivering consistent earnings growth.
(You can read the full research report on Peoples Bancorp of North Carolina here >>>)
Other noteworthy reports we are featuring today include Sterling Infrastructure, Inc. (STRL), Woodward, Inc. (WWD) and Lamar Advertising Co. (LAMR).
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
Merck's (MRK) Growth Outlook Stable Despite Keytruda Patent Cliff
Southern Company (SO) Buoyed by High Demand From Data Centers
AI-Driven Optics Upgrades Boosts Lumentum's (LITE) Prospects
Featured Reports
Growing Mission-Critical Demand & Integrated Model Aid Sterling (STRL)
Per the Zacks analyst, Sterling is gaining from robust demand trends for mission-critical activity, mainly in data centers and semiconductors. Also, its integrated business model adds to the growth.
Woodward (WWD) Gains from Strength in Aerospace Segment
Per the Zacks analyst, Woodward's Aerospace segment is gaining from strength in the commercial aftermarket and higher defense activity, with fiscal 2026 revenues expected to grow 21-24% from this unit
Lamar (LAMR) Digital Growth Fuels Cash Flow Despite Cyclical Ad Risk
Per the Zacks Analyst, Lamar's resilient local demand and growing digital business support steady cash generation and dividends, while cyclical ad budgets and leverage remain key risks.
Service Center Unit Aids Applied Industrial (AIT), Costs Ail
Per the Zacks analyst, Applied Industrial's Service Center Based Distribution segment is driven by increase in demand for technical MRO services. However, high costs remain concerning for the company.
Restructuring Gains and Demand Driven Growth Boosts VMI Prospects
Per the Zacks analyst, VMI is benefiting from ongoing restructuring initiatives that are resulting in cost savings. The Utility segment is also poised for robust growth from high demand.
Investments & Customer Additions Aid Southwest Gas (SWX)
Per the Zacks analyst, Southwest Gas' strategic investment plans will support system improvements and pipe replacement programs. Consistent customer additions will further boost its results.
Blue Owl (OBDC) to Grow on Diversified Portfolio Amid Margin Pressure
Per the Zacks analyst, Blue Owl's diversified portfolio supports growth, but lower interest rates and spread compression are weighing on earnings.
New Upgrades
Five Below's (FIVE) Traffic Gains and Customer Focus Fuel Growth
Per the Zacks analyst, Five Below may benefit from broad-based customer traffic gains and a customer-centric strategy that strengthens engagement and supports sustained demand momentum.
Expanding DevSecOps Footprint Aids GitLab (GTLB) Prospect
Per the Zacks analyst, GitLab is benefiting from growing DevSecOps adoption, strong renewal trends and increasing AI-driven usage across workflows.
SaaS Expansion Supports Omnicell's (OMCL) Growth Outlook
The Zacks analyst is optimistic about Omnicell's growth outlook, driven by expanding SaaS and Expert Services adoption, pharmacy automation initiatives and global expansion.
New Downgrades
Theravance (TBPH) Relies on Profit Sharing Amid Pipeline Constraints
Theravance's revenue growth is driven by higher profit-sharing income from U.S. Yupelri sales. Lack of Pipeline Diversification and discontinuation of lead its candidate concern the Zacks analyst.
Chord Energy's (CHRD) Williston Basin Advantage Drives Growth
Chord Energy's Williston Basin position and its shift to longer laterals drive cost-efficient production growth. However, its sensitivity to oil prices concerns the Zacks analyst.
Weak Global Vehicle Production to Hurt Aptiv (APTV)
Per the Zacks analyst, weak global vehicle production due to geopolitical tensions, weak momentum for electric cars, and worldwide semiconductor shortage are expected to impact Aptiv's business.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
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Southern Company (The) (SO): Free Stock Analysis Report
Merck & Co., Inc. (MRK): Free Stock Analysis Report
Lamar Advertising Company (LAMR): Free Stock Analysis Report
Woodward, Inc. (WWD): Free Stock Analysis Report
Sterling Infrastructure, Inc. (STRL): Free Stock Analysis Report
Lumentum Holdings Inc. (LITE): Free Stock Analysis Report
Peoples Bancorp of North Carolina, Inc. (PEBK): Free Stock Analysis Report
Autoscope Technologies Corporation (AATC): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).