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Top Research Reports for Amazon, Alibaba & NIKE

Sheraz Mian

Wednesday, June 24, 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 (AMZN), Alibaba Group (BABA) and NIKE (NKE). 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 >>>

Amazon had become a leader of the retail space even before Covid-19 made the company an essential part of many households' only provider of essential supplies during the shelter-in-place phase. The pandemic has boosted digital sales, a trend that was already in place in the pre-Covid world. No doubt Amazon shares have been standout perfomers lately, up +46.1% over the past year, handily outperforming the S&P 500 index's +7.5% gain during the same period. 

In addition to Amazon's online retail dominance, the Zacks analyst spotlights the company's AWS business as a key source of competitive advantage in the cloud computing space.

Further, AWS is gaining solid traction among healthcare workers, medical researchers, educational institutions and government organizations owing to coronavirus management measures. Further, Prime momentum owing to fast delivery services and strong content portfolio is benefiting Amazon.

Also, expanding distribution strength and workforce which are helping in addressing the overflowing online orders during this pandemic are major positives. Furthermore, robust Alexa skills and strong smart home product offerings are tailwinds. However, growing coronavirus related expenses might hurt Amazon’s profitability. Also, foreign exchange headwinds and rising cloud competition are risks.

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

Alibaba shares have lagged Amazon this year, with the stock up +6.2% vs. Amazon's +48.1% year-to-gain, likely reflecting a 'China discount'. The Zacks analyst believes that Alibaba Group is driven by a steady improvement in core commerce and strong cloud business. The company continues to benefit from strong growth in metrics.

Further, Alibaba’s strengthening cloud business with its expanding customer base continues to drive its performance. The company's New Retail strategy is also gaining momentum. This is aiding growth in Tmall Import, Hema fresh food grocery business and Intime Department Stores.

However, higher costs associated with new initiatives remain a major concern. Also, COVID-19 related economic uncertainties and macro headwinds in China are major concerns. In addition, rising competition from e-commerce players like Amazon poses a risk.

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

NIKE’s shares have gained +25.3% over the past three months against the Zacks Shoes and Retail Apparel industry’s rise of +29.4%. The Zacks analyst believes that the use of its digital ecosystem as a key playbook to combat the COVID-19 crisis has benefitted the company.

Notably, the company retained its positive earnings track record, with earnings and sales beat in third-quarter fiscal 2020. The NIKE Direct business displayed strength backed by more than 30% digital revenue growth across all geographies and Converse. 

Nevertheless, the effects of store closures in China due to outbreak hurt Greater China’s revenues in third-quarter fiscal 2020. This resulted in lower sales mix in Greater China, which is its high margin geography, causing gross margin decline in the quarter. Further, the company expects soft results in the fiscal fourth quarter due to store closures.  

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

Other noteworthy reports we are featuring today include AstraZeneca (AZN), 3M Company (MMM) and BP p.l.c. (BP).

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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

Growing AWS Adoption & Prime Momentum Benefit Amazon (AMZN)

Alibaba (BABA) Drives On Cloud Growth; Investments Hurt

NIKE (NKE) Digital Business Act As Catalyst, Expects Soft Q4

Featured Reports

Cancer Drugs to Drive AstraZeneca's (AZN) Sales in 2020

The Zacks analyst says that AstraZeneca's cancer drugs should drive revenues in 2020 while the coronavirus outbreak may hurt its profits.

Cost-savings Actions to Aid 3M (MMM), Pandemic Scare Persists

Per a Zacks analyst, 3M's (MMM) cost-saving actions will help it deal with some financial stress caused by the pandemic.

BP plc (BP) Banks on Key Upstream Projects, Refining Hurts

BP has a strong portfolio of major upstream projects. However, the firm's weak refining business concerns the Zacks analyst.

E-commerce Adoption, High Inventory to Aid Prologis (PLD)

Per the Zacks analyst, fast adoption of e-commerce and higher inventory levels are expected to drive demand for Prologis' assets.

Pre-Salt Reserves Boosts Petrobras (PBR), Debt Pile Hurts

Petrobras' stakes in Brazil's pre-salt oil reservoirs should boost its earnings outlook. However, the Zacks analyst is concerned over the company's debt load of $73.1 billion.

Philips (PHG) Benefits from Solid Portable Ventilator Demand

Per the Zacks analyst, Philips is benefiting from strong demand for portable ventilators amid the coronavirus pandemic.

General Motors (GM) to Ride on High SUV Demand Amid Cost Woes

Healthy demand for trucks & SUVs is boosting General Motors' sales. However, the Zacks analyst is concerned over the firm's high R&D expenses and capital expenditure.

New Upgrades

Strong Networks & Service Expansion Aid U.S. Cellular (USM)

Per the Zacks analyst, U.S. Cellular continues to benefit from its network modernization program, adding capacity and speed while launching 5G services commercially and VoLTE in remaining markets.

ABM Industries (ABM) Rides on 2020 Vision, Acquisitions

The Zacks Analyst believes that systematic and strategic plans of action under 2020 Vision are likely to drive long-term profitable growth for ABM Industries.

Jack in the Box (JACK) Food Catering Services Bode Well

Per the Zacks analyst, Jack in the Box is poised to benefit from increased focus on food packaging and portability services. Also, the company's digital offerings bode well.

New Downgrades

Decline in CVI Revenues Hurts The Cooper Companies (COO)

The Zacks Analyst is pessimistic about the Cooper Companies' sluggish performance across core CVI and CSI units. Softness in non single-use sphere sales is another concern.

Softness in the Global Ceramic Business Hurts Mohawk (MHK)

Per the Zacks analyst, softness in U.S. ceramic market due to a decline in product mix, soft retail demand, a stronger dollar and shift of customers to LVT has been impacting Mohawk's performance.

Suspension of Mining Operations to Hurt B2Gold (BTG)

The Zacks analyst remains concerned that B2Gold's results will bear the brunt of production slowdown and suspension of mining operations amid the coronavirus pandemic.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
NIKE, Inc. (NKE) : Free Stock Analysis Report
3M Company (MMM) : Free Stock Analysis Report
BP p.l.c. (BP) : Free Stock Analysis Report
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
AstraZeneca PLC (AZN) : Free Stock Analysis Report, Inc. (AMZN) : Free Stock Analysis Report
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