Key Stock Updates for Alphabet, Morgan Stanley, and ServiceNow
Zacks Research Daily Highlights
Featured Stocks: Today's report includes research on 16 major stocks, notably Alphabet Inc. (GOOGL), Morgan Stanley (MS), and ServiceNow, Inc. (NOW), along with micro-cap stocks New England Realty Associates Limited Partnership (NEN) and Bridger Aerospace Group Holdings, Inc. (BAER). The micro-cap research is unique in the country.
Market Insights: The 'Ahead of Wall Street' article provides insights into economic releases and their potential impact on market actions, available for free on the Zacks homepage.
Alphabet Inc. (GOOGL)
Performance Overview: GOOGL shares have increased by 11.8% year-to-date, slightly below the Zacks Internet - Services industry’s 13.1% gain. The company is experiencing strong growth in its cloud and search segments.
Cloud Growth: Google Cloud's annual revenue run rate has surpassed $50 billion, driven by advancements in AI infrastructure and Generative AI Solutions. The Circle to Search feature is now active on over 300 million devices, and AI Overviews reach over 2 billion users monthly, increasing global queries by over 10%.
Challenges: Despite growth, GOOGL faces litigation issues and intense competition in the cloud sector.
Morgan Stanley (MS)
Stock Performance: MS shares have outperformed the Zacks Financial - Investment Bank industry, rising 48.7% compared to 43.5% over the past year.
Growth Drivers: The company is focusing on wealth and asset management, with projected investment banking fees and total revenues expected to grow by 3.9% and 3.6%, respectively, in 2025.
Concerns: Operating expenses are anticipated to rise by 7% this year, and uncertainty in capital market performance poses a risk.
ServiceNow, Inc. (NOW)
Market Position: ServiceNow shares have outperformed the Zacks Computers - IT Services industry, with a 7.3% increase compared to a decline of 8.6% in the industry.
Business Growth: The company reported 11 deals exceeding $5 million in net new annual contract value in Q2 2025 and raised its subscription revenue guidance for 2025 to between $12.775 billion and $12.795 billion, indicating a growth rate of 19.5-20%.
Future Outlook: ServiceNow is on track to exceed $15 billion in subscription revenues by 2026, bolstered by AI and machine learning technologies.
New England Realty Associates Limited Partnership (NEN)
Stock Performance: NEN shares have underperformed, declining by 1% compared to the Zacks Real Estate - Operations industry’s 19.2% gain.
Financial Challenges: The company faces a 26% increase in debt to $511.2 million and a rising residential vacancy rate of 2.4%.
Positive Developments: The acquisition of Hill Estates adds 399 units, enhancing cash flows, while rental income grew by 5% in H1 2025 to $41.5 million.
Bridger Aerospace Group Holdings, Inc. (BAER)
Stock Performance: BAER shares have underperformed the Zacks Aerospace - Defense industry, declining 24.1% compared to a 13.3% gain in the industry.
Operational Risks: The company faces cash burn and reliance on low-margin work, with a concentration on federal contracts posing risks.
Growth Potential: BAER operates the only CL-415EAF Scooper fleet in the U.S., benefiting from long-term government contracts and a $46 million sale-leaseback that improves liquidity.
Additional Reports
Other Notable Stocks: The report also highlights Waste Management, Seagate Technology, and Synchrony Financial, focusing on their respective growth strategies and challenges.
Market Trends: The semiconductor market is projected to grow from $452 billion in 2021 to $971 billion by 2028, indicating significant opportunities for companies in this sector.
Investment Recommendations: Zacks Investment Research offers insights into the best stocks for the upcoming month, emphasizing the importance of strategic investments in high-growth sectors.
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Analyst Views on WM
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Investors Turn to Emerging Dividend Aristocrats for Stability
- Market Haven: In 2026, investors are turning to stable dividend payers due to concerns over artificial intelligence, with Wolfe Research noting that the Dividend Aristocrats ETF (NOBL) has risen over 9% year-to-date, demonstrating the effectiveness of its defensive strategy amid economic uncertainty.
- Telecom Performance: Verizon has raised its dividend for 19 consecutive years, with a 20% stock price increase in 2026 and a current dividend yield of about 5.8%; despite cautious analyst sentiment, Daiwa Capital Markets upgraded it to buy, highlighting its stable profits and dividends.
- Costco's Steady Growth: Costco has consistently raised its dividend over the past 20 years, recently increasing its quarterly payout from $1.16 to $1.30, with a 14% stock price rise in 2026, and analysts predict it will be a key beneficiary in a stimulated consumer environment, with a projected 6% upside in stock price over the next year.
- Emerging Dividend Aristocrats List: In addition to Verizon and Costco, Wolfe Research identified companies like BlackRock, Hershey Co, and Waste Management as emerging dividend aristocrats, highlighting their appeal and stability in an uncertain market.
Waste Management's Investment Returns Set to Materialize
- Shareholder Return Expectations: Waste Management anticipates a 29% year-over-year free cash flow growth in 2026, marking the largest jump since COVID, indicating that after years of investment, cash flow is rebounding, allowing for substantial shareholder returns.
- Capital Expenditure Strategy: The company deployed approximately $11.6 billion in 'planting' capital from FY2022 to FY2025, with $7.5 billion allocated to the acquisition of Stericycle, successfully creating a medical waste management segment that generated $2 billion in revenue and achieved a 16% profit margin in its first year, demonstrating the effectiveness of strategic investments.
- Infrastructure Modernization: WM invested about $1.8 billion in infrastructure, establishing seven landfill gas-to-energy plants now producing pipeline-quality natural gas, while also integrating robotics and AI across nine recycling facilities, enhancing operational efficiency and market competitiveness.
- Market Performance Analysis: Waste Management's stock surged from November lows, reclaiming both the 50-day and 200-day moving averages, currently consolidating between $238 and $240, with a decisive breakout above $240 indicating entry into blue-sky territory, reflecting strong market confidence and effective risk management.
Will RSG Stock Transform Guidance into Profits by 2026?
Earnings Report: Republic Services, Inc. reported fourth-quarter earnings per share of $1.76, exceeding forecasts of $1.62, but slightly missed revenue expectations with $4.14 billion, which was 1.6% below the forecasted $4.21 billion.
Future Guidance: The company provided guidance for full-year 2026 revenue between $17.05 billion and $17.15 billion, indicating a 3% year-over-year increase, and EPS guidance between $7.20 and $7.28, also reflecting a similar growth rate.
Stock Performance: Despite a negative total return of around 2.2% over the last 12 months, Republic Services' stock is showing signs of a bullish reversal, with analysts suggesting a potential upside of about 15% and a price target near $245.
Market Trends: Investors are adopting a more defensive posture amid concerns about growth sustainability in the artificial intelligence sector, while Republic Services is expected to benefit from ongoing consolidation trends in the waste management industry.
BMO Increases Target Price for Waste Management Inc. to $237, Up from $226
Waste Management Inc. Update: Waste Management Inc. has raised its target price to $237 from $226.
Market Reaction: The increase in target price reflects positive market sentiment and expectations for the company's performance.
Housing Market May Be Stabilizing: Building Supplies Company QXO Anticipates Recovery
- Company Overview: QXO is a building-supplies company led by Brad Jacobs, known for his history of acquiring businesses.
- Recent Activity: The company has recently announced another acquisition deal, continuing its trend of expansion through acquisitions.
WASTE MANAGEMENT INC: JEFFERIES INCREASES TARGET PRICE FROM $258 TO $263
- Company Update: Jeffries has raised its price target for Waste Management.
- New Price Target: The new target price is set at $263, up from the previous $258.
Investors Turn to Emerging Dividend Aristocrats for Stability
- Market Haven: In 2026, investors are turning to stable dividend payers due to concerns over artificial intelligence, with Wolfe Research noting that the Dividend Aristocrats ETF (NOBL) has risen over 9% year-to-date, demonstrating the effectiveness of its defensive strategy amid economic uncertainty.
- Telecom Performance: Verizon has raised its dividend for 19 consecutive years, with a 20% stock price increase in 2026 and a current dividend yield of about 5.8%; despite cautious analyst sentiment, Daiwa Capital Markets upgraded it to buy, highlighting its stable profits and dividends.
- Costco's Steady Growth: Costco has consistently raised its dividend over the past 20 years, recently increasing its quarterly payout from $1.16 to $1.30, with a 14% stock price rise in 2026, and analysts predict it will be a key beneficiary in a stimulated consumer environment, with a projected 6% upside in stock price over the next year.
- Emerging Dividend Aristocrats List: In addition to Verizon and Costco, Wolfe Research identified companies like BlackRock, Hershey Co, and Waste Management as emerging dividend aristocrats, highlighting their appeal and stability in an uncertain market.
Waste Management's Investment Returns Set to Materialize
- Shareholder Return Expectations: Waste Management anticipates a 29% year-over-year free cash flow growth in 2026, marking the largest jump since COVID, indicating that after years of investment, cash flow is rebounding, allowing for substantial shareholder returns.
- Capital Expenditure Strategy: The company deployed approximately $11.6 billion in 'planting' capital from FY2022 to FY2025, with $7.5 billion allocated to the acquisition of Stericycle, successfully creating a medical waste management segment that generated $2 billion in revenue and achieved a 16% profit margin in its first year, demonstrating the effectiveness of strategic investments.
- Infrastructure Modernization: WM invested about $1.8 billion in infrastructure, establishing seven landfill gas-to-energy plants now producing pipeline-quality natural gas, while also integrating robotics and AI across nine recycling facilities, enhancing operational efficiency and market competitiveness.
- Market Performance Analysis: Waste Management's stock surged from November lows, reclaiming both the 50-day and 200-day moving averages, currently consolidating between $238 and $240, with a decisive breakout above $240 indicating entry into blue-sky territory, reflecting strong market confidence and effective risk management.
Will RSG Stock Transform Guidance into Profits by 2026?
Earnings Report: Republic Services, Inc. reported fourth-quarter earnings per share of $1.76, exceeding forecasts of $1.62, but slightly missed revenue expectations with $4.14 billion, which was 1.6% below the forecasted $4.21 billion.
Future Guidance: The company provided guidance for full-year 2026 revenue between $17.05 billion and $17.15 billion, indicating a 3% year-over-year increase, and EPS guidance between $7.20 and $7.28, also reflecting a similar growth rate.
Stock Performance: Despite a negative total return of around 2.2% over the last 12 months, Republic Services' stock is showing signs of a bullish reversal, with analysts suggesting a potential upside of about 15% and a price target near $245.
Market Trends: Investors are adopting a more defensive posture amid concerns about growth sustainability in the artificial intelligence sector, while Republic Services is expected to benefit from ongoing consolidation trends in the waste management industry.
BMO Increases Target Price for Waste Management Inc. to $237, Up from $226
Waste Management Inc. Update: Waste Management Inc. has raised its target price to $237 from $226.
Market Reaction: The increase in target price reflects positive market sentiment and expectations for the company's performance.
Housing Market May Be Stabilizing: Building Supplies Company QXO Anticipates Recovery
- Company Overview: QXO is a building-supplies company led by Brad Jacobs, known for his history of acquiring businesses.
- Recent Activity: The company has recently announced another acquisition deal, continuing its trend of expansion through acquisitions.
WASTE MANAGEMENT INC: JEFFERIES INCREASES TARGET PRICE FROM $258 TO $263
- Company Update: Jeffries has raised its price target for Waste Management.
- New Price Target: The new target price is set at $263, up from the previous $258.
