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Q4 Earnings Scorecard and Analyst Reports for NVIDIA, Costco & Stryker

Sheraz Mian

Thursday, February 20, 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 NVIDIA (NVDA), Costco Wholesale (COST) and Stryker (SYK). We have also provided a real-time update on the ongoing Q4 earnings season. The research reports featured here 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 >>>

Q4 Earnings Season Scorecard

Including all of this morning's reports, we now have Q4 results from 432 S&P 500 members or 86.4% of the index's total membership. Total earnings for these companies are up +2.1% from the same period last year on +4.6% higher revenues, with 72% beating EPS estimates and 65.5% beating revenue estimates. 

This is a better showing than we have seen from these companies in the first three quarters of 2019. 

For more details about the Q4 earnings season and evolving expectations for the current period, please check our weekly Earnings Trends report here >>>Q1 Estimates Holding Up Despite Virus Impact 

NVIDIA’s shares have outperformed the Zacks General Semiconductor industry over the past year (+102% vs. +47.8%). The Zacks analyst believes that the company is benefiting from strong growth in GeForce desktop and notebook GPUs, which is boosting gaming revenues. Moreover, an increase in Hyperscale demand was a tailwind for the Data Center business.

NVIDIA's fourth-quarter fiscal 2020 results reflected strength in Data Center and Gaming end markets. Further, the solid uptake of AI-based smart cockpit infotainment solutions is a boon. Additionally, strength across desktop workstation products is aiding Professional Visualization revenues.

However, in the near term, management expects a $100-million negative impact of the coronavirus menace on revenues. Moreover, the U.S.-China trade war remains a key concern. Also, lower demand for notebook workstations might be a near-term hindrance. 

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

Shares of Costco have gained +17.1% in the past six months against the Zacks Discount Retail industry's rise of +16.6%. The Zacks analyst believes that that the company’s business model and commitment toward opening membership warehouses will continue to drive traffic.

The company’s growth strategies, better price management, sturdy comps performance and strong membership trends reinforce its position. Moreover, with the wave of digital transformation, Costco is rapidly adopting the omni-channel mantra to provide a seamless shopping experience, whether online or in-stores.

Such concerted efforts have been favoring comps, which remain one of the key factors behind incremental sales. Comps grew 6.6%, while sales improved 8% during month of January. However, any higher investments or aggressive pricing strategy may hurt margins. Moreover, rising SG&A expenses and stiff competition also pose concerns.

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

Stryker’s shares have gained +11.9% over the past three months against the Zacks Medical Products industry's rise of +5.7%. The Zacks analyst believes that Stryker continues to gain from its core MedSurg unit, which put up a strong show in the fourth quarter. Additionally, strength in flagship Mako platform continues to favor the company.

Stryker exited fourth-quarter 2019 on a strong note, wherein both earnings and revenues beat their respective consensus marks. Moreover, solid performance by the neurotech product lines drove the core Neurotechnology & Spine unit in the quarter under review. Robust international growth also instills investor optimism in the stock.

Expansion in operating margin is a positive while a strong outlook for 2020 is indicative of bright prospects. However, pricing pressure continues to plague Stryker. Stiff competition in the MedTech space remains a headwind.

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

Other noteworthy reports we are featuring today include Advanced Micro Devices (AMD), Mitsubishi UFJ Financial (MUFG) and CSX Corporation (CSX).

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Sheraz Mian

Director of Research

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

NVIDIA (NVDA) Gets a Boost From Gaming Business Recovery

Decent Comparable Sales Run to Fuel Costco's (COST) Top Line

Core MedSurg Unit Aids Stryker (SYK), Pricing Pressure Ails

Featured Reports

AMD Banks on Product Portfolio and Partnership Strength

Per the Zacks analyst, Advanced Micro Devices is benefiting from robust adoption of latest EYPC, Ryzen and Radeon processors.

Loan Growth Aids Mitsubishi (MUFG) Amid Low Interest Rates

Per the Zacks analyst, organic growth remains a key strength at Mitsubishi UFJ. Yet, domestic low rate environment is a woe.

CSX Impresses With Cost Cuts, Dividends & Share Buybacks

The Zacks analyst is optimistic about CSX's measures to reward shareholders through dividends and share buybacks.

Boston Scientific's (BSX) Growing Product Uptake Drives Sales

The Zacks analyst expects Boston Scientific to maintain its robust growth momentum across a structural heart and urology arms banking on strong rollout of WATCHMAN, ACURATE and LithoVue.

Growing Topline Aids Marsh & McLennan (MMC), Expenses Hurt

Per the Zacks analyst, its increasing topline driven by product offerings, geographic expansion and acquisitions has led to significant growth.

Strategic Initiatives Benefit Aon (AON) Despite Rising Debts

Per the Zacks Analyst, buyouts and collaborations have enhanced the company's capabilities, which, in turn, have led to bottom-line growth.

Square (SQ) Banks on Strong Product Lines Amid Competition

Per the Zacks analyst, well performing Square Register, Build with Square and API platforms continue to aid growth in Square's gross payment volume.

New Upgrades

Micron (MU) Benefits From Growing Demand for DRAM Solutions

Per the Zacks analyst, Micron is benefiting from elevated demand for DRAM products in datacenters, IoT and AI markets. Normalization in customer inventory is a key driver.

Rising Loans and Fee Income Boost M&T Bank's (MTB) Top-Line

Per the Zacks analyst, M&T Bank's continues to gain from increasing loans and deposits balance amid the improving economy. Also, diverse fee income sources will bolster its top line growth.

New CMS Guidance, FDA Nod Buoys Insulet Corporation (PODD)

The Zacks analyst is bullish about new CMS guidance for Omnipod covered under the Medicare Part D prescription drug benefit program.

New Downgrades

Aptiv (APTV) Grapples With Weak Global Vehicle Production

The Zacks analyst believes that a weak global vehicle production continues to hurt demand for Aptiv's offerings. The company expects global vehicle production to be down 3% in 2020.

Baked Goods & Meal Solutions Hurt TreeHouse Foods (THS)

Per the Zacks analyst, TreeHouse Foods has been battling with soft sales at its Baked Goods and Meal Solutions units. Evidently, adverse volume/mix hurt sales at these segments in the fourth quarter.

Softness in Rental Demand Dampens Ryder's (R) Prospects

The Zacks analyst is concerned about the below-par rental demand, which is likely to weigh on Ryder's first-quarter 2020 earnings. The company's exorbitant debt levels further add to its woes.

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Stryker Corporation (SYK) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Mitsubishi UFJ Financial Group, Inc. (MUFG) : Free Stock Analysis Report
CSX Corporation (CSX) : Free Stock Analysis Report
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
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