Credit: Shutterstock photoMonday, April 30, 2018
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 17 major stocks, including Microsoft (MSFT), Facebook (FB), Intel (INTC) and Boeing (BA). 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 >>>
Microsoft 's shares have outperformed the Zacks Technology sector over the last year (up +38% versus +15.3%) Microsoft reported impressive third-quarter results driven by solid Azure growth and strong adoption of Office 365. LinkedIn results continued to impress as increasing sessions reflected acceleration in engagement.
Microsoft provided bullish guidance for fiscal 2019. The Zacks analyst thinks continuing transition to cloud services will drive top-line growth. The company's unique position as a hybrid cloud solution provider is expected to drive server products and cloud services revenues. The company's strategic growth investments in cloud business and artificial intelligence (AI) as well as stable PC market are positives.
Further, Microsoft's strategic initiatives to enter the augmented reality and virtual reality market will drive growth in the long haul. However, its business reorganization and "cloud-first mobile-first" execution risks remain. Competition also remains stiff.
(You can read the full research report on Microsoft here >>> ).
Shares of Facebook have underperformed the S&P 500 index in the last three months, losing -7.2% vs. -5.8%. Facebook reported solid first-quarter 2018 results on the back of robust growth in advertising and user base. The Zacks analyst thinks the company is benefiting from rising mobile conversions on its platform, which is driving mobile ad growth.
Increasing effectiveness of Instagram ads is also positive. Apart from mobile and video, the monetization opportunities of Messenger, WhatsApp and Oculus and a huge user base are expected to drive growth going ahead.
However, the recent data scandal which affected 87 million users has put Facebook in a spot. Facebook's sizable investments to tighten security on the platform which along with continued investments in video, AR/VR and AI, will dent operating margins going ahead.
(You can read the full research report on Facebook here >>> ).
Intel 's shares have outperformed the Zacks General Semiconductor industry over the past three months, gaining +9.5% vs. +0.2%. Intel's first-quarter 2018 results benefited from robust data-centric growth. DCG, IOTG, NSG, PSG segments along with MobilEye form the crux of Intel's data-centric business model.
DCG segment revenues gained from strong demand for high-performance products. The Zacks analyst thinks that the company's strategy of expanding TAM beyond CPU to adjacent product lines like silicon photonics, fabric, network ASICs, and 3D XPoint memory is bearing fruit. Further, expanding customer base in the PSG segment drove top-line growth.
Moreover, a stable PC market is also positive for the company. Lower spending helped in expanding operating margins. Intel raised 2018 guidance based on these solid growth trends. However, a delay in transition to 10-nm process is a concern. Moreover, intensifying competition remains a headwind.
(You can read the full research report on Intel here >>> ).
Shares of Buy-ranked Boeing have surged +86.9% in the last year, outperforming the Zacks Aerospace & Defense sector, which gained +42% during the same time period. Boeing started off 2018 on an impressive note. The company's first-quarter earnings as well as revenue figures comfortably surpassed their respective expectations.
The Zacks analyst stresses that the company is the largest aircraft manufacturer in the world in terms of revenues, orders and deliveries. Considering the huge global demand for commercial jets, Boeing has been enjoying an enormous flow of orders from all over the world. In this regard, the company's 20-year market outlook forecasts commercial jetliner demand to increase by 3.6%.
Boeing expects single-aisle jets to be the major driver behind this demand growth. Meanwhile, Middle East has emerged as another promising market for Boeing, as is evident from its latest JV worth $450 million with Saudi Arabia. Yet, this aerospace giant continues to face challenges from stiff competition.
(You can read the full research report on Boeing here >>> ).
Other noteworthy reports we are featuring today include Thermo Fisher (TMO), Qualcomm (QCOM) and Valero (VLO).
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Senior Editor
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 Trendsand Earnings Previewreports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today's Must Read
Robust Azure & Office 365 Aids Microsoft's (MSFT) '19 View
Mobile Ad Growth, Expanding User Base Drives Facebook (FB)
Data-Centric Growth & Stable PC Market Drives Intel (INTC)
Air Traffic Boom, Solid Cash Flow Boost Boeing's (BA) Growth
Featured Reports
Valero (VLO) Gains on Higher Throughput, Blending Costs High
The Zacks analyst believes that improving throughput volume on higher refinery utilization will help Valero generate more cash flow.
BG Acquisition Synergies Boost Royal Dutch Shell (RDS.A)
Apart from remarkable progress regarding the speed of its BG integration, the Zacks analyst likes Shell's strong inventory of development projects and the progress on its large disinvestment program.
Solid High Capacity Drive Demand Aids Western Digital (WDC)
Per the Zacks analyst, Western Digital is benefiting from solid demand for high capacity enterprise hard drives and flash-based products.
Unit Revenues Aid American Airlines (AAL), Fuel Costs Ail
The Zacks analyst likes the company's performance with respect to unit revenues. Efforts to modernize its fleet are also encouraging.
Cost Savings Aid PNC, Unsustainable Capital Deployment a Woe
Per Zacks analyst, PNC Financial's cost control measures aid its bottom line. Yet, unfavorable debt/equity ratio indicates that it might not be able to maintain current capital deployment activities.
Fiber-Operator Buyouts to Drive Crown Castle (CCI) Growth
The Zacks analyst likes Crown Castle's efforts to diversify its business from a tower operator to a fiber provider.
Alexion (ALXN) Strong on Soliris Growth, ALXN1210 Prospects Promising
Per the Zacks analyst, Alexion's blockbuster drug Soliris continues to perform well and the prospects of ALXN1210 looks good.
New Upgrades
Thermo Fisher (TMO) Gains Ground on Solid Global Business
The Zacks analyst is bullish on Thermo Fisher actively strengthening its position in emerging and high-growth markets. Notably, the company has been seeing strength in China, South Korea and India.
PACCAR (PCAR) Rides on Rising Demand for Class 8 Truck
PACCAR's U.S. Class 8 truck retail sales are rising. Per the Zacks analyst, demand for trucks is rising due to strong economic growth, high consumer spending and heightened construction activities.
Las Vegas Sands (LVS) Banks on Mass and Non-Gaming Segments
The Zacks analyst believes that Las Vegas Sands' EBITDA margins are improving consistently owing to focus on mass and non-gaming segments that carry higher margins.
New Downgrades
Qualcomm (QCOM) Plagued by Regulatory Disputes & Margin Woes
Regulatory disputes and aggressive competition in the mobile phone chipset market continue to hurt Qualcomm. Headwinds from weaker industry conditions have further dented margins.
Telefonica (TEF) Mired by Stiff Competition & High Debt
Increased competition in domestic as well as international markets pose a threat to Telefonica's margins. Accumulating debt and decreasing cash flows also remain concerns for the company.
JAKKS Pacific's (JAKK) Sales Hurt by Toys "R" Us Liquidation
The Zacks analyst believes that the liquidation of Toys "R" Us, the last major chain fully dedicated to selling toys is substantially hurting JAKKS Pacific's topline.
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Valero Energy Corporation (VLO): Free Stock Analysis Report
Thermo Fisher Scientific Inc. (TMO): Free Stock Analysis Report
QUALCOMM Incorporated (QCOM): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
Intel Corporation (INTC): Free Stock Analysis Report
Facebook, Inc. (FB): Free Stock Analysis Report
The Boeing Company (BA): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
