Friday, January 3, 2020
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 Apple (AAPL), Amazon.com (AMZN) and Visa (V). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Apple’s shares have outperformed the broader S&P 500 index over the past year (+102.6% vs. +27.4%). The Zacks analyst believes that the company is expected to benefit from continued momentum in the Services segment.
Non-iPhone devices are also expected to perform well, driven by strong demand for iPad, Apple Watch and AirPods. The company’s expanded portfolio, including MacBook Pro, Apple Watch Series 5 and Apple TV+, is a key catalyst. Moreover, the nomination of The Morning Show for multiple Golden Globe awards reflect Apple TV+’s content strength.
Additionally, the solid adoption of Apple Watch Series 5 is now helping the iPhone maker strengthen presence in the personal health monitor space. The Phase One deal between the U.S. and China is also a positive. Nevertheless, antitrust investigations, App Store-related lawsuits and Spotify’s complaint increase legal woes.
Shares of Amazon have gained +9.1% in the past three months against the broader S&P 500 index’s rise of +10.4%. The Zacks analyst believes that Amazon is benefiting from its aggressive retail strategies and distribution strength.
Rapid adoption of Prime driven by customer benefits and strengthening grocery services is aiding its top line. Further, Prime is driving its holiday sales growth. Also, expanding content portfolio is encouraging Prime membership. Further, strengthening AWS services and its growing adoption rate are aiding Amazon’s dominance in the cloud space. Furthermore, improving Alexa skills and features remain major positives.
Also, rising number of Alexa compatible devices is a tailwind. However, rising transportation cost related to its free one-day shipping service remains an overhang and is likely to increase further. Also, Amazon expects foreign exchange headwinds to continue impacting its top line.
Visa‘s shares have gained +8% over the past six months against the Zacks Financial Transaction Services industry’s rise of +6.9%. The Zacks analyst believes that numerous acquisitions and alliances plus technology upgrades and effective marketing have paved the way for long-term growth and consistent increase in revenues.
Shift in payments to new methods such as mobile, cards, online and via wearables paves way for long term growth. The acquisition of Visa Europe is a long-term growth strategy for the company. Its international business has been expanding and adds diversification benefits. Its strong capital position is another positive.
However, high client incentives and expenses weigh on its operating margin. Also, adverse foreign exchange volatility imparts instability to the company’s earnings.
Other noteworthy reports we are featuring today include salesforce.com (CRM), Honeywell International (HON) and 3M Company (MMM).
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Today’s Must Read
Per the Zacks analyst, salesforce is gaining from its diverse cloud offerings, which are helping it win customers globally.
Per the Zacks analyst, solid traction of Honeywell’s Performance Materials & Technologies segment, fueled by strength in process solutions business will drive its sales. High debt level is a concern.
Per a Zacks analyst, 3M (MMM) is poised to gain from its buyouts and divestments (the recent being advanced ballistic-protection business).
Per the Zacks analyst, Goldman depicts cost control efforts to drive operational efficiency. Yet, legal issues and persistent weak fixed income trading revenues remain concerns.
Per the Zacks analyst, VMware’s diversified product portfolio and expanding partner base that now includes Microsoft, AWS & IBM are driving top-line growth.
Per the Zacks analyst, Advanced Micro Devices is benefiting from robust adoption of latest EYPC, Ryzen and Radeon processors.
Healthy demand for trucks, SUVs & crossovers is boosting General Motors’ sales. However, the Zacks analyst is concerned about the firm’s high leverage of 88% and negative free cash flows.
Per the Zacks Analyst, over 70% of the U.S. Navy fleet consists of Huntington Ingalls ships which leads to strong demand rise.
Per the Zacks analyst, Pilgrim’s Pride is set to gain from its Prepared Foods unit. The company is making investments to strengthen this unit, as it is likely to form a big proportion of the top line.
Per the Zacks analyst, Goodyear’s TireHub JV has been aiding the firm in effective distribution of tires in the United States. Also, the Raben Tire buyout bolsters Goodyear’s network and prospects.
Per the Zacks Analyst, stringent utility regulations could be detrimental to CenterPoint Energy’s growth. Moreover, outstanding fixed-rate debt increases vulnerability to adverse economic conditions.
The Zacks analyst believes that the declining production view attributable to the drop in natural gas price, along with raised capex guidance, might continue to hamper Cabot Oil & Gas’ bottom line.
Per the Zacks Analyst, the European Commission is concerned that the Boeing-Embraer merger may reduce competition in aircraft market. It also faces stiff market competition due to peer price pressure.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.