Monday, August 10, 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 Facebook, Inc. (FB), Cisco Systems, Inc. (CSCO) and T-Mobile US, Inc. (TMUS). 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 >>>
Facebook shares have outperformed the Zacks Internet - Services industry year to date (+30.7% vs. +18.8%), with the momentum expected to continue on the back of strong user engagement as reflected in the company's blowout June-quarter results. The Zacks analyst points out that the company has benefitted from increased engagement with its products in the reported quarter as more people were compelled to stay at home due to the coronavirus outbreak.
However, Facebook expects user-base growth to be flat or slightly down in most of its regions in the third quarter of 2020, sequentially. The company expects ad-revenue growth on a year-over-year basis to be roughly 10%. Further, a number of companies have announced plans to freeze ad spending on Facebook due to its failure to eradicate hate speech and misinformation. This is expected to hurt top-line growth, at least in the near term.
(You can read the full research report on Facebook here >>>)
Shares of Cisco have gained +9.5% over the past three months compared with the Zacks Computer - Networking industry’s increase of +9.6%. The Zacks analyst believes that Cisco is well poised to benefit from robust demand for identity and access, advanced threat as well as unified threat management security solutions fuelled by coronavirus crisis-induced high growth in Internet traffic. Moreover, solid uptake of Webex video conferencing and business productivity offerings on account of COVID-19 induced work-from-home demand environment is noteworthy.
However, weak demand for servers and HyperFlex solutions is a woe. Moreover, sluggishness in the commercial, service provider and enterprise end markets and coronavirus crisis-induced supply chain constraints are likely to put pressure on the top line.
(You can read the full research report on Cisco here >>>)
Shares of T-Mobile US have gained +46.8% year to date against the Zacks Wireless National industry’s fall of -1.9%. The Zacks analyst is confident about the company’s ability to unlock massive synergies and build the world’s best 5G network. It has the country’s largest 5G network, covering more than 250 million people across 1.3 million square miles. It has a mid-band 5G service using 2.5 GHz spectrum live in eight major markets.
However, the company operates in a fiercely competitive and almost saturated U.S. telecom market that undermines its growth potential. Low-priced service plans for individual consumers as well as small business entities have not significantly improved its bottom-line numbers. In addition, several promotional activities to lure customers from rivals have eroded the profitability.
(You can read the full research report on T-Mobile US here >>>)
Other noteworthy reports we are featuring today include Canadian Natural Resources Limited (CNQ), Uber Technologies, Inc. (UBER) and CVS Health Corporation (CVS).
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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
Expanding User Base, Instagram Strength Aid Facebook (FB)
Cisco (CSCO) to Gain From Security Products & Webex Adoption
T-Mobile (TMUS) Rides on Merger Synergies Amid Competition
Project Investments Aid Entergy (ETR), High Debt Levels Hurt
Per the Zacks Analyst, Entergy's disciplined investments in growth projects bolsters its growth prospects. However, massive debt levels can be a major headwind for the company, going ahead.
Delivery Business Aids Uber (UBER) Amid Weakness in Mobility
The Zacks analyst is impressed by the continued surge in Uber's delivery business. However, the mobility business is down significantly as coronavirus keeps people homebound.
Growth in E-Commerce Sales to Aid Grainger (GWW), Costs Ail
Per the Zacks Analyst, Grainger's is poised well to gain on the rise in e-commerce demand fueled by the coronavirus pandemic.
Better Pricing &Combined Ratio Aid American Financial (AFG)
Per the Zacks analyst, American Financial is set to gain from American Financial consistent price Increase in Property and Casualty business and favorable combined ratio reflecting solid underwriting.
Revenue Growth and Debt-Free Level Aids T. Rowe Price (TROW)
Per the Zacks analyst, organic growth remains a key strength at T. Rowe Price. Also, the company remains debt free with substantial liquidity which has aided in strengthening the capital leverage.
Solid Health Care Products Unit Aid Fresenius Medical (FMS)
Per the Zacks analyst, Fresenius Medical continues to gain from solid prospects in Health Care Products business mainly owing to growing demand of products for acute care treatments.
CVS Health (CVS) Tackles Pandemic Crisis with Digital Strategy
The Zacks analyst is upbeat about CVS Health's consumer centric digital strategy, which has become relevant in the pandemic-led stay-at-home orders.
Diverse Production Mix to Aid Canadian Natural (CNQ)
The Zacks analyst believes that Canadian Natural's diverse production mix of synthetic oil, heavy crude oil, natural gas and light crude oil facilitates long-term value and reduces risk profile.
Restructuring & Cost-Saving Actions to Aid Regal Beloit (RBC)
Per a Zacks analyst, Regal Beloit (RBC) is poised to benefit from business restructuring actions as well as from its cost-control measures taken especially to deal with the pandemic-related difficulty
Gibraltar's (ROCK) Renewable Energy & Conservation Unit Aids
Per the Zacks analyst, increased volume in Renewable Energy and Conservation as well as Residential Products segments, and the Four-Pillar Value Creation strategy bode well for Gibraltar.
Lower Visitation Continues to Hurt Planet Fitness (PLNT)
Per the Zacks analyst, Planet Fitness has been negatively impacted by lower visitation owing to the rise in COVID-19 cases. Also, the company's membership had been negatively impacted due to the same.
Soft BSD Sales a Concern for ODP Corporation's (ODP) Top Line
Per the Zacks analyst, soft Business Solutions Division's sales is a concern for ODP Corporation. In second-quarter 2020, the division's sales declined 23% owing to the ongoing coronavirus pandemic.
Aerie's (AERI) Ophthalmology Drugs Faces Stiff Competition
Per the Zacks Analyst, Aerie's ophthalmology drugs, Rhopressa and Rocklatan faces intense competition from other renowned drugs like Lumigan and Vyzulta, among others, which can affect sales in future
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Uber Technologies, Inc. (UBER) : Free Stock Analysis Report
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