Friday, May 19, 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 NVIDIA Corporation (NVDA), Cisco, Inc. (CSCO) and Philip Morris International Inc. (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 >>>
NVIDIA shares have outperformed the Zacks Semiconductor - General industry over the past year (+89.9% vs. +42.4%). The company is gaining from strong growth of artificial intelligence, high-performance computing and accelerated computing, which is boosting its Compute & Networking revenues. The stock was up big following the last quarterly release on February 22nd and Nvidia fans will be hoping for a repeat perforance it comes out with quarterly numbers this coming Wednesday (May 24th).
A surge in Hyperscale demand and a solid uptake of artificial intelligence-based smart cockpit infotainment solutions are acting as tailwinds. Collaboration with Mercedes-Benz and Audi is likely to advance its presence in autonomous vehicles and other automotive electronics space.
However, NVDA’s near-term prospects look gloomy due to weakening demand for chips used in gaming and data center end markets. While macroeconomic headwinds are impacting gaming and data center chip demand, higher channel inventory levels are hurting chip prices.
(You can read the full research report on NVIDIA here >>>)
Shares of Cisco have modestly outperformed the Zacks Computer - Networking industry over the past year (+16.1% vs. +15.5%). The company’s end-to-end security is benefiting from strong demand for Cisco’s unified threat management and zero trust offerings.
Cisco witnessed strong demand for its products, including the Catalyst 9000 family, Meraki, and Nexus 9000 offerings. Expanding growth opportunities for low-power-consuming technologies, including IoT, Silicon One and Power over Ethernet bodes well for Cisco. Its investments across security business, focusing on cloud-based offerings, is expected to drive growth in the long haul.
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 here >>>)
Shares of Philip Morris have declined -1.9% over the past six months against the Zacks Tobacco industry’s decline of -4.5%. The company has been battling cost-related headwinds and expects certain margin pressures in the first half of 2023. Also, soft cigarette shipment volumes and volatile currency movements have been concerns. In 2023, the total international industry volume is estimated to decline by 1-2%, excluding China and United States.
Nevertheless, Philip Morris has been gaining from its pricing power. Higher pricing variance was an upside to the company’s performance in the first quarter of 2023 and is likely to drive performance in the full year.
A focus on reduced risk products, especially IQOS, has been working well for the company, which is witnessing a continued product mix shift from cigarettes to smoke-free products. These upsides are likely to boost organic revenues in 2023.
(You can read the full research report on Philip Morris here >>>)
Other noteworthy reports we are featuring today include Synopsys, Inc. (SNPS), BCE Inc. (BCE) and Ameriprise Financial, Inc. (AMP).
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
NVIDIA (NVDA) Benefits From Increasing Automotive Deal Wins
Cisco (CSCO) Benefits From Strong Security Products Adoption
Philip Morris (PM) Gains From Solid Pricing Amid Cost Woes
Synopsys (SNPS) Banks on Strong Product Menu, Contract Wins
Per the Zacks analyst, Synopsys' focus on strengthening its product portfolio is helping it cater to the growing demand in the EDA market. Deal wins at leading semiconductor companies is a tailwind.
BCE To Benefit From Growing Demand for PureFibre and 5G
Per the Zacks analyst, BCE will benefit from increased demand for its PureFibre and 5G wireless network. Intense competition and high-debt burden remain concerns
Restructuring Efforts Aid Ameriprise (AMP), High Costs Ails
Per the Zacks analyst, Ameriprise's efforts to restructure operations, focus on core businesses and robust AUM balance will aid revenues. Yet, rising costs, volatile markets and outflows are concerns.
Ryanair (RYAAY) Rides on Improved Traffic Amid Rising Costs
The Zacks Analyst is impressed with Ryanair's improved traffic growth, which implies increased passenger volume. High operating costs, due to rising fuel expenses, might hurt the bottom line.
Cheniere Partners (CQP) to Benefit From Growing LNG Demand
Per the Zacks analyst, Cheniere Partners (CQP) is poised to capitalize on the rising LNG demand which is expected to increase significantly over the next decade. Yet higher debt exposure is concerning
Molecular Diagnostics Aid Hologic (HOLX), Forex Woes Ail
The Zacks analyst is impressed with Hologic's Molecular Diagnostics growth driven by BVCVTV vaginitis panel and the core STI menu. Yet, foreign exchange woes remain a concern.
UFP Industries (UFPI) Banks on Product Innovation, Costs Ail
Per the Zacks analyst, UFP Industries' efforts to introduce new products, existing product portfolio and buyout synergies bode well. Yet, high costs and lumber market swings ail.
Conagra's (CAG) Organic Sales Benefit From Robust Pricing
Per the Zacks analyst, Conagra has been gaining from its inflation-induced pricing actions. In third quarter, organic sales grew 6.1%, backed by 15.1% jump in price/mix, which rose across all units.
Acquisitions, Diverse Customer Base Aid NRG Energy (NRG)
Per the Zacks analyst NRG Energy expansion through organic and inorganic initiatives is likely to boost its results. Its diverse customer base and retention of customer increase earning predictability
Solid USPI Business, Acquisitions Aid Tenet Healthcare (THC)
Per the Zacks Analyst, the USPI business benefits from growing patient volumes and solid margins. Buyouts enhance its capabilities and diversify the business.
Lower Fertilizer Prices and Higher Costs Ail Nutrien (NTR)
Per the Zacks analyst, lower fertilizer prices will weigh on the companys bottom line. Higher cost inventory will also hurt margins in its Retail unit.
Reduced IT Spending Due to Economic Uncertainty Hurts CDW
Per the Zacks analyst, CDW's performance is affected to due to economic uncertainty, which caused customers to spend more cautiously. Also, leveraged balance sheet is a concern.
Children's Place (PLCE) Soft Margin Trend is a Concern
Per the Zacks analysts, Children's Place (PLCE) has been witnessing weak margin trends for a while. Increased supply chain costs and lower merchandise margins are weighing on the same.
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