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Top Analyst Reports for AMD, PepsiCo & SAP

Tuesday, May 21, 2024

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 Advanced Micro Devices, Inc. (AMD), PepsiCo, Inc. (PEP) and SAP SE (SAP), as well as two micro-cap stocks FitLife Brands, Inc. (FTLF) and National Presto Industries, Inc. (NPK). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.

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 >>>

AMD’s shares have outperformed the Zacks Electronics – Semiconductors industry over the past six months (+35.8% vs. +35.6%). The company is benefiting from portfolio strength and an expanding partner base. Data Center revenues benefited from the strong adoption of AMD Instinct MI300X GPUs and a double-digit percentage increase in CPU sales.

In cloud, server CPU revenues increased year over year and sequentially as North American hyperscalers expanded fourth Gen EPYC Processor deployments to power their internal workloads and public instances. Exiting first-quarter 2024, AMD had more than 900 public cloud instances available, with Amazon, Google and Microsoft increasing their usage of fourth-gen EPYC processor offerings with new instances and regional deployments.

Microsoft, Meta, Oracle and other cloud providers announced further MI300X deployments in the reported quarter. However, weakness in the Gaming and the Embedded businesses remains a headwind.

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

Shares of PepsiCo have outperformed the Zacks Beverages - Soft drinks industry over the year-to-date period (+6.9% vs. +5.7%).  Strength and resilience in core categories, diversified portfolio, modernized supply chain, improved digital capabilities, flexible go-to-market distribution systems and robust consumer demand trends are helping it to outpace the industry.

Additionally, PEP’s international business continues to hallmark its overall performance, delivering significant volume and organic revenue growth in the first quarter. These factors along with robust pricing aided PepsiCo’s earnings and organic revenues first-quarter 2024.

PepsiCo’s productivity and cost-management initiatives bode well. For 2024, PEP expects to deliver organic revenue growth of at least 4%. However, the company witnessed soft sales trends in the QFNA segment due to recent product recalls. Adverse currency rates also remain headwinds.

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

SAP’s shares have outperformed the Zacks Oil and Gas - Integrated - International industry over the year-to-date period (+77.0% vs. +46.8%). The company’s performance is benefiting from strengthening cloud business, especially robust demand for the Rise with SAP and Grow with SAP solutions. We expect non-IFRS cloud revenues to be up 24.6% in 2024.

Momentum in its business technology platform along with proliferation of generative AI bodes well. It is now focusing more on vital strategic growth areas, especially Business AI, and position the company for future growth. Management also reaffirmed its guidance for 2024 cloud revenues along with 2025 long-term targets including cloud and total revenues.

However, continued softness in the Software license and support business segment along with uncertainty prevailing over global macroeconomic conditions continues to remain concerns for SAP. Rising costs are likely to put pressure on margin performance.

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

Shares of FitLife Brands have outperformed the Zacks Medical - Products industry over the past year (+65.7% vs. +0.3%). This microcap company with market capitalization of $127.6 million has seen strong revenue growth, notably after acquiring Mimi's Rock Corp., boosting yearly revenues by 83% in 2023. Online sales have surged 309%, aligning with e-commerce trends and evolving consumer habits.

Financial health is robust, with debt reduced through proactive payments. The acquisition of MusclePharm adds well-known products, boosting the diverse portfolio, although integration poses risks. Cost efficiencies from mergers, especially in advertising, bolster profitability.

FitLife’s market position benefits from the growing nutritional supplement industry but faces challenges like high debt levels, reliance on GNC, and market competitiveness. Regulatory compliance and market dynamics pose additional risks, with reliance on acquisitions and online sales presenting potential volatility and integration challenges.

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

National Presto’s shares have outperformed the Zacks Diversified Operations industry over the past year (+12.2% vs. +11.6%). This microcap company with market capitalization of $568.38 million maintains a strong financial position with $63.5 million in cash and low debt levels, enhancing its ability to invest and return value to shareholders through dividends and buybacks.

Its diversified revenue streams from Housewares/Small Appliances, Defense, and Safety segments provide stability and reduce market risk. The Defense segment, generating $55 million in first-quarter 2024 net sales, boasts a substantial $692.6 million backlog, positioning the company for growth. Strategic positioning in high-growth markets, including defense and smart kitchen appliances, further bolsters its long-term potential.

However, increasing inventory levels raise concerns about demand forecasting, and heavy reliance on defense contracts exposes it to government spending changes. Intense competition in kitchen appliances poses risk.

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

Other noteworthy reports we are featuring today include The Boeing Co. (BA), Southern Copper Corp. (SCCO) and Workday, Inc. (WDAY).

Mark Vickery
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 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

AMD Rides on Strong Adoption of Fourth-Gen EPYC Processor

PepsiCo's (PEP) Investments in Business Drive the Top Line


SAP To Benefit From Continued Momentum in Cloud Business

Featured Reports

Military Business Aids Boeing (BA), 737 Program Issue Woes
Per the Zacks analyst, Boeing boasts a solid $2.8 trillion market opportunity for its defense unit. Yet, the company incurred charges in relation to the 737 jets' grounding in recent past

Workday (WDAY) Rides on Portfolio Strength, Solid Demand
Per the Zacks analyst, Workday is likely to gain from strength in human capital and financial management portfolio. The HiredScore buyout will likely enhance prospects in the human resource domain.

HVAC & Controls Aids Johnson Controls (JCI) Amid Forex Woes
Per the Zacks analyst, continued demand for HVAC & Controls within the Building Solutions North America segment is likely to drive Johnson Controls' revenues. However, forex woes remain a concern.

Alcon (ALC) Vision Care Business Solid Amid Stiff Rivalry
The Zacks analyst is impressed with Alcon growth in Vision Care business driven by strong adoption of advanced technology intraocular lenses in global market. Yet, stiff rivalry remains a concern.

Centene (CNC) Rides on Growing Premiums Amid Rising Costs
Per the Zacks analyst, solid Medicaid business, contract wins and acquisitions continue to drive the company's premiums and subsequently, its revenues. However, high expenses remain a concern

Macao Business to Aid Las Vegas Sands (LVS), High Debt Ail
Per the Zacks analyst, Las Vegas Sands is likely to benefit from revenue diversification efforts and strategic investments in the Macao region. However, high debt and stiff competition are a concern.

Exelixis' (EXEL) Cabometyx Strong Amid Stiff Competition
Per the Zacks analyst, lead drug Cabometyx maintains momentum with continued label expansions and the pipeline development is encouraging. However, competition is stiff.

New Upgrades

Increased Production & Prices to Aid Southern Copper (SCCO)
The Zacks analyst expects the company to gain from rise in copper and silver prices and increased production reflecting full-scale operations at Pilares and ramp-up at Buenavista zinc concentrator.

Digital Transformation, Product Strength Aids Nutanix (NTNX)
Per the Zacks analyst, Nutanix is benefiting from higher investments by clients in digital transformation, as well as frequent product refreshes which help it gain new customers.

Viper Energy (VNOM) Banks on Oil-Rich Permian Basin
The Zacks analyst likes Viper Energy as it generates strong and steady royalty income from mineral interests in the prolific Permian Basin.

New Downgrades

Robert Half (RHI) Remains Troubled by Declining Liquidity
Per the Zacks analyst, Robert Half is seeing a lower current ratio for a while. The company's current ratio at the end of March-quarter was pegged at 1.85, lower than the year-ago quarter's 1.96.

Allegiant (ALGT) Grapples With Rising Expenses, High Debt
The Zacks Analyst is worried about the fact that rising operating expenses are likely to keep ALGT's bottom line under pressure. A debt-laden balance sheet is another concern.

Inflationary Pressures Hurt Cracker Barrel's (CBRL) Prospects
Per the Zacks analyst, Cracker Barrel's operations are likely to be affected by wage inflation, high interest rates and subdued consumer sentiments. Also, reduced restaurant traffic is a concern.

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

The Boeing Company (BA) : Free Stock Analysis Report

Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report

SAP SE (SAP) : Free Stock Analysis Report

PepsiCo, Inc. (PEP) : Free Stock Analysis Report

Southern Copper Corporation (SCCO) : Free Stock Analysis Report

Workday, Inc. (WDAY) : Free Stock Analysis Report

National Presto Industries, Inc. (NPK) : Free Stock Analysis Report

FitLife Brands Inc. (FTLF) : Free Stock Analysis Report

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Zacks Investment Research