Wednesday, June 7, 2023
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 Cisco Systems, Inc. (CSCO), Toyota Motor Corporation (TM) and Verizon Communications Inc. (VZ). 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 >>>
Shares of Cisco Systems have modestly outperformed the Zacks Computer - Networking industry over the past year (+14.7% vs. +14.2%). The company is riding on the growing demand for its security products. Its security portfolio is benefiting from the launch of new data loss prevention, firewall and zero trust capabilities. Zero Trust portfolio is riding on strong demand for its Duo offering.
Optimized application experience is benefiting from strong demand for ThousandEyes. Its investments across security business, focusing on cloud-based and AI-driven offerings, is expected to drive growth. Expanding growth opportunities for low-power-consuming technologies, including IoT, Silicon One and Power over Ethernet bodes well for Cisco.
Cisco now expects modest revenue growth in fourth quarter. Earnings is expected to grow at a higher rate than revenues driven by gross margin expansion and disciplined expense management.
(You can read the full research report on Cisco Systems here >>>)
Toyota Motor shares have outperformed the Zacks Automotive - Foreign industry over the past six months (+4.4% vs. +2.4%). The Zacks analyst believes continued demand for vehicles and robust product line-up is set to fuel sales volumes of Toyota.
To capitalize on the accelerated global shift to green cars, the auto giant is deepening focus on manufacturing electric and fuel-cell vehicles, which will bolster the company’s product competitiveness. The company’s commitment to return capital to shareholders and upbeat fiscal 2024 view spark confidence.
However, commodity cost inflation is expected to weigh on gross margins. Supply-chain disruptions and tough labor market will play spoilsports. Unfavorable foreign currency translations and high R&D expenses are also likely to limit profits. Also, elevated leverage of the firm may restrict its financial flexibility to tap onto growth opportunities. Thus, investors are advised to wait for a better entry point.
(You can read the full research report on Toyota Motor here >>>)
Shares of Verizon Communications have declined -3.5% over the past six months against the Zacks Wireless National industry’s decline of -10.4%. The company is witnessing significant 5G adoption and fixed wireless broadband momentum. Its 5G mobility service offers a premium experience across various industries such as public safety, health care, retail and more. Strong demand for Fios and fixed wireless products are tailwinds.
Verizon’s mmWave footprint delivers game-changing experiences for the densest parts of the network and offers reliable signal waves with enhanced efficiency and less interference for consumers.
However, retail prepaid and postpaid net losses are hindering the top line. Stiff competition from other major players and saturation in the U.S. wireless market is hurting its profits. Heavy spending on promotional activities to attract customers is weighing on margins. It has reiterated its earlier soft guidance for 2023 due to a challenging macroeconomic environment.
(You can read the full research report on Verizon Communications here >>>)
Other noteworthy reports we are featuring today include Meta Platforms, Inc. (META), Intuit Inc. (INTU) and American Express Company (AXP).
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
Cisco (CSCO) Benefits From Strong Security Products Adoption
Green Push Aids Toyota Motor (TM), High Expenses Concerns
Verizon (VZ) Poised to Benefit from Solid 5G Adoption, Customer Focus
Intuit (INTU) Rides on Product Refresh, Higher Subscriptions
Per the Zacks analyst, Intuit is benefiting from frequent product refreshes, which help it to gain customers. Moreover, increase in subscriptions is driving stable revenue growth for the company.
AmEx (AXP) to Gain From Sturdy Consumer Spending & Buyouts
Per the Zacks analyst, resilient consumer spending despite economic volatility will aid volumes, and buyouts will trigger American Express' inorganic growth. Yet, rising costs hurt the bottom line.
Vertex (VRTX) Cystic Fibrosis Sales Up, Non-CF Pipeline Solid
Vertex's cystic franchise (CF) sales are rising driven by Trikafta. The Zacks analyst likes its rapid progress of its non-CF pipeline with many late-stage projects having established proof of concept
Southern Company (SO) Buoyed by Regulated Customer Growth
The Zacks analyst believes that increase in Southern's regulated business customer base will support its revenue growth but is concerned over timing and cost overrun related to Vogtle project.
Solid Order Growth Aid Otis Worldwide (Otis), Currency Woes Ail
Per the Zacks analyst, Otis is benefiting from strong order growth in New Equipment and Service segment, backed by favorable pricing and innovation. However, high cost and currency woes hurt.
Equifax (EFX) Gains from Product Innovation, Debt Woes Ail
The Zacks analyst believes that synergies from acquisitions, product innovation, and efficient business executions will continue to drive Equifax's revenues. A debt-laden balance sheet is a concern.
Demand for Financing Aids Hercules Capital (HTGC), Costs Ail
Per the Zacks analyst, driven by the rise in demand for customized financing, total new commitments will increase, thus aiding Hercules Capital's top line. However, elevated costs might hurt profits.
User Growth, Instagram Strength Aids Meta Platforms (META)
Per the Zacks analyst, Meta Platforms is benefiting from a strengthening user base. Moreover, improving engagement levels for Instagram, Messenger and WhatsApp bode well.
Brand Strength to Drive Molson Coors' (TAP) Performance
Per the Zacks analyst, Molson Coors has been gaining from strength in Coors Light and Miller Lite brands. Also, its above premium portfolio and gains from Revitalization Plan act as growth drivers.
Kinsale Capital (KNSL) to Grow on Solid Excess and Surplus Market
Per the Zacks analyst, Kinsale Capital is set to grow on the strength of its Excess and Surplus Market on the back of improved margins and lower loss ratios, which drives strong underwriting results.
Limited Users, Regulations Ail NextEra Energy Partners (NEP)
Per the Zacks analyst NextEra Energy Partners (NEP) dependence on a limited group of customers for revenues and additional expenses to meet to stringent regulations could impact its operations.
Low Iron Ore Prices & High Costs to Hurt BHP Group (BHP)
The Zacks Analyst is concerned that lower iron ore prices due to weak demand in China as well as escalated input costs will impact BHP's results.
Stiff Competition, Forex Concerns Ail AngioDynamics (ANGO)
The Zacks analyst is worried about AngioDynamics' operation in a highly competitive market. Unfavorable currency movement is an added issue.
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