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Broadcom and Cardinal Health have been highlighted as Zacks Bull and Bear of the Day

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·8-min read
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For Immediate Release

Chicago, IL – January 13, 2022 – Zacks Equity Research shares Broadcom AVGO as the Bull of the Day and Cardinal Health CAH asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Sony Group Corp. SONY, Salesforce CRM and Microsoft MSFT.

Here is a synopsis of all five stocks:

Bull of the Day:

After hitting an all-time high of 16,212 on November 22nd, the NASDAQ Composite index has come under pressure. The tech-heavy index came all the way down to the south end of its 200-day moving average intraday this last Monday.

The good news for investors is, the key level held and buyers stepped in. With some strength in the index, it may feel like you can go out there and buy any tech stock you like. Rather than randomly putting together a four-letter ticker to run after, why not look for a tech stock that has a strong earnings trend behind it as well? This way, the technical support of a key level coupled with strong earnings can show you what profits really look like.

One way to uncover these stocks is by leaning on the time-tested strength of the Zacks Rank. Stocks in the good graces of the Zacks Rank, like today’s Bull of the Day, have the strongest earnings trends. That bull today is Zacks Rank #1 (Strong Buy) Broadcom.

Broadcom Inc. designs, develops, and supplies various semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The company operates in two segments, Semiconductor Solutions and Infrastructure Software.

The reason for the favorable rank on Broadcom lies in the recent earnings estimate revisions coming from analysts. Over the last sixty days, twelve analysts have increased their earnings estimates for the current year while four have done so for next year. The bullish actions have increased our Zacks Consensus Estimates for the current year from $31.01 to $33.03 while next year’s number is up from $33.31 to $36.29. That represents growth of 17.92% for the current year and 9.87% for next year.

Bear of the Day:

Sometimes, it is easy to get caught up in the momentum of a fast-moving stock. We have all heard the old adage of “Buy low and sell high” but it is equally as fun to “Buy high and sell higher.” You have to be sure that your stock that is on the move has staying power and is not just on a quick sugar high. One way to figure this out is by looking at earnings. Stocks with the strongest earnings trends tend to outperform those with weak earnings profiles. When analysts on Wall Street start moving their numbers in the wrong direction, it can lead to problems for a stock’s price.

Today’s Bear of the Day is a stock that has seen earnings estimate revisions coming down. That stock is Cardinal Health. Cardinal Health, Inc. operates as an integrated healthcare services and products company in the United States, Canada, Europe, Asia, and internationally. It provides customized solutions for hospitals, healthcare systems, pharmacies, ambulatory surgery centers, clinical laboratories, physician offices, and patients in the home. The company operates in two segments, Pharmaceutical and Medical.

Currently, Cardinal Health is a Zacks Rank #5 (Strong Sell). The reason for the unfavorable Zacks Rank is the recent earnings estimate revisions from analysts all over Wall Street. Over the last sixty days, two analysts have cut their expectations for both the current year and next year. The bearish sentiment has dropped our Zacks Consensus Estimates for the current year from $5.85 to $5.60 while next year’s number is off from $6.57 to $6.14. That current year number represents a mere 54 bps of growth over last year while next year is forecast to come in at 9.6% growth. Sales growth has still been relatively strong with 9.15% this year and 4.81% next year.

The Medical – Dental Supplies industry ranks in the Top 33% of our Zacks Industry Rank. There are other stocks within the same industry which are in the good graces of the Zacks Rank.

Additional content:

Sony to Continue Production of PS4 in 2022

Sony Group Corp. is planning to continue the production of its last-generation console, PlayStation 4 (PS4), throughout 2022, according to a report from Bloomberg. Previously, Sony had plans to shelve PS4 production by 2021 but the company never had disclosed the plans officially, added the report.

Bloomberg also added that a Sony spokesperson confirmed that the company was maintaining PS4 production this year.

Citing sources acquainted with the matter, Bloomberg reported that Sony conveyed to its assembly partners late last year that it would go on producing PS4 in 2022 to alleviate pressure on PlayStation 5 (PS5) production. PS5 production has been troubled for quite some time due to pandemic-triggered global supply-chain disruptions.

Sony launched PS5 in November 2020. The latest console was an instant hit with gamers and reportedly more than 10 million units have been sold since then. PS5 boasts a powerful 8-core AMD Zen 2 processor, 10.3 teraflops of graphics power and impressive 4K visuals, thereby providing an enhanced end-user experience.

Sony’s Game & Network Services (G&NS) segment is one of the leading growth drivers of the company’s top line. In the last reported quarter, G&NS sales jumped 27.4% year over year to ¥645.4 billion, driven by a rise in sales of hardware, a positive impact of foreign exchange rates and an increase in sales of non-first-party titles. The segment’s operating income was ¥82.7 billion compared with ¥105.4 billion in the prior-year quarter.

The company is also focusing on expanding its gaming business through an inorganic growth strategy. Last year, the company acquired game developer, Bluepoint Games, a game development studio, Housemarque, a PC-port specialist, Nixxes and the U.K.-based developer, Firesprite to bolster its market share in the lucrative gaming software business.

Zacks Rank & Other Stocks to Consider

At present, Sony carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks from the broader technology sector include Salesforce and Microsoft. While Salesforce and Hewlett Packard sport a Zacks Rank #1 (Strong Buy), Microsoft carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Salesforce’s fiscal 2022 earnings is pegged at $4.68 per share, up 6.4% in the past 60 days. The long-term earnings growth rate of the company is pegged at 16.8%.

Salesforce’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 44.2%. Shares of CRM have increased 7.6% in the past year.

The Zacks Consensus Estimate for Microsoft’s fiscal 2022 earnings is pegged at $9.13 per share. The long-term earnings growth rate of the company is pegged at 12%.

Microsoft’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 14.8%. Shares of MSFT have surged 45.6% in the past year.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance or information about the performance numbers displayed in this press release.


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Microsoft Corporation (MSFT) : Free Stock Analysis Report
 
salesforce.com, inc. (CRM) : Free Stock Analysis Report
 
Cardinal Health, Inc. (CAH) : Free Stock Analysis Report
 
Broadcom Inc. (AVGO) : Free Stock Analysis Report
 
Sony Corporation (SONY) : Free Stock Analysis Report
 
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