Monday, March 30, 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 Alphabet (GOOGL), Procter & Gamble (PG) and Philip Morris International (PM). 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 >>>
Alphabet’s shares have outperformed the Zacks Internet Services industry over the past six months (-7.9% vs. -8.7). The Zacks analyst believes that Alphabet's strengthening cloud unit is aiding substantial revenue growth. Moreover, expanding data centers will continue to bolster its presence in the cloud space.
Further, major updates in its search segment are enhancing the search results, which is a major positive. Moreover, Google’s robust mobile search is gaining solid momentum. Additionally, strong focus on innovation of AI techniques and the home automation space should aid business growth in the long term.
Further, its deepening focus on wearables category remains a tailwind. However, the company’s growing litigation issues and increasing expenses might hurt profitability. Further, the company faces persistent pressure from advertisers to tighten controls on YouTube video service. This remains a concern.
(You can read the full research report on Alphabet here >>>)
Shares of Procter & Gamble have gained +6.3% over the past year against the Zacks Soap and Cleaning Materials industry’s fall of -3.1%. The Zacks analyst believes that the company’s solid second-quarter fiscal 2020 earnings mark the continuation of its positive surprise trend.
Further, earnings and sales improved year over year in the reported quarter on gains from productivity efforts, robust volume, favorable mix and pricing. Total productivity cost savings aided core currency-neutral gross and operating margin by 120 bps and 220 bps, respectively. Further, it delivered adjusted free cash flow productivity of 100%.
Backed by strong organic sales growth, core earnings and returns to shareholders in the fiscal second quarter, the company raised its view for fiscal 2020. However, currency fluctuations remain concerning. Nevertheless, gains from acquisitions and divestitures are likely to partly offset the currency headwinds.
(You can read the full research report on Procter & Gamble here >>>)
Philip Morris’ shares have lost -15.8% over the past three months against the Zacks Tobacco industry’s fall of -22.7%. The Zacks analyst believes that the company continues to battle receding cigarette volumes due to stringent regulations and rising health consciousness. Cigarette volumes are likely to drop in 2020.
The company said it doesn’t anticipate facing any out-of-stock situation in major operating income areas and expects customers to continue having access to its products amid the coronavirus. Apart from this, strong pricing aided its sales and adjusted operating income in fourth-quarter 2019.
Results were also aided by cost-efficiencies and gains from RRPs, which, in turn, is benefiting from broad-based IQOS growth. However, management is temporarily suspending all operations at MTB due to coronavirus.
(You can read the full research report on Philip Morris here >>>)
Other noteworthy reports we are featuring today include SAP SE (SAP), Novo Nordisk (NVO) and Tesla (TSLA).
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
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
Alphabet (GOOGL) Rides on Diversification; Legal Troubles Ail
Cost-Cutting Plan to Support Procter & Gamble (PG) Margins
Phillip Morris (PM) to Gain From Smoke-Free Product Category
SAP Rides on Cloud Initiatives & Growth in S/4HANA Platform
Per the Zacks analyst, SAP's resilient Cloud and Software business, act as staple growth drivers. Robust adoption of S/4HANA and other cloud-based offerings have supported the company's top line.
Strong Diabetes Portfolio Boost Novo (NVO) Amid Competition
Per the Zacks analyst, Novo Nordisk's strong and broad diabetes portfolio drives growth for the company. However, intensifying competition is a concern for the company.
Tesla's (TSLA) Model 3 Aids Sales Amid Weak Model S/X Demand
While record deliveries of Model 3 are aiding Tesla's top line, ebbing production and margins for Model S/X are limiting the firm's profitability, per the Zacks analyst.
Smokeless Unit Aids Altria (MO), Soft Cigarette Volumes Hurt
Per the Zacks analyst, Altria is benefitting from strong smokeless product sales, which grew 5.8% in the fourth quarter.
Southern (SO) Buoyed by Customer Growth, Vogtle Costs Hurt
The Zacks analyst believes that steady increase in Southern Company's regulated business customer base should support its revenues.
Inflows Aid Blackstone (BX) Assets Growth, High Costs a Woe
Per the Zacks analyst, continued net inflows will aid Blackstone's assets under management growth, thereby boosting top line.
Cost Reduction to Aid Southern Copper (SCCO) Amid Low Prices
The Zacks analyst appreciates Southern Copper's focus on cost reduction and expansion actions.
Card Sales Aid, Debt Level Hurts Discover Financial (DFS)
Per the Zacks analyst, its soaring card sales volume on the back of current and new businesses, alliances and partnerships has led to significant growth.
Rise in Demand for Student Loans, Buyouts Aid Navient (NAVI)
Per the Zacks Analyst, declining unemployment rate leads to rise in demand for student loans which shall bolster Navient. Also, its move to expand operations with acquisitions is a positive factor.
Solid Balance Sheet Position Aids Amerisafe (AMSF)
Per the Zacks analyst, the company has a clean balance sheet with no debt, which provides plenty of financial flexibility to fund operations and meet financial obligations.
Hybrid Cloud & SaaS Investments Drain VMware's (VMW) Margins
Per the Zacks analyst, VMware's margins are stressed due to persistent investments in hybrid cloud and SaaS portfolio expansions along with dilutive acquisitions.
Rising Oil & Gas Production Costs Hurt Pioneer Natural (PXD)
The Zacks analyst is concerned as increasing oil production expenses affect Pioneer Natural's bottom line. Also, the firm expects crude production to decline in 2020 as commodity prices are weak.
Euronet (EEFT) Hurt by Forex Fluctuations, Higher Expenses
Per the Zacks analyst, the company is exposed to foreign currency exchange risk due to collection of money in other currencies and cross-currency fund transfer. Also, high costs weigh on margins.
Tesla, Inc. (TSLA) : Free Stock Analysis Report
SAP SE (SAP) : Free Stock Analysis Report
Philip Morris International Inc. (PM) : Free Stock Analysis Report
Procter & Gamble Company (The) (PG) : Free Stock Analysis Report
Novo Nordisk A/S (NVO) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research