Friday, May 26, 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 Apple Inc. (AAPL), Chevron Corp. (CVX) and Accenture plc (ACN). 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 >>>
Apple’s shares have outperformed the Zacks Computer - Mini computers industry over the past year (+16.3% vs. +15.8%). The company’s revenues are expected to grow year over year. Growing services subscriber base and a strong liquidity position are key catalysts for Apple’s prospects.
However, Apple expects the March quarter’s year-over-year revenue growth to be similar to that of the December quarter due to unfavorable forex. For iPhone, Apple expects the March quarter’s year-over-year revenue growth to accelerate relative to the December quarter’s year-over-year revenue growth.
For Mac and iPad, revenues are expected to decline in double digits on a year-over-year basis due to challenging comparison and macroeconomic headwinds. Services revenue growth is expected to be negatively impacted by challenging macroeconomic conditions, as well as weakness in digital advertising and gaming.
(You can read the full research report on Apple here >>>)
Shares of Chevron have underperformed the Zacks Oil and Gas - Integrated - International industry over the past year (-10.1% vs. +1.7%). The company was not immune to the commodity price crash of 2020, forcing it to cut spending substantially. The company’s high oil price sensitivity is a concern too.
Moreover, the supermajor’s 10-year reserve replacement ratio of 100% is indicative of its inability to replace the amount of energy produced. However, Chevron is considered one of the best-placed global integrated oil firms to achieve sustainable production ramp-up.
America’s No. 2 energy firm’s existing project pipeline is among the best in the industry, thanks to its premier position in the lucrative Permian Basin. As a reflection of these positives, we saw CVX’s EPS jump 132% in 2022.
(You can read the full research report on Chevron here >>>)
Accenture’s shares have outperformed the Zacks Consulting Services industry over the year-to-date period (+77.0% vs. +46.8%). The company has been steadily gaining traction in its outsourcing and consulting businesses backed by high demand for services that can improve operating efficiencies and save costs. The company has been strategically enhancing its cloud and digital marketing suite through buyouts and partnerships.
The company’s strong operating cash flow has helped it reward its shareholders in the form of dividend payments and share repurchases, and pursue opportunities in areas that show true potential. On the flip side, pricing pressure due to significant competition from strong companies like Genpact, Cognizant and Infosys, remains a concern.
Global presence exposes it to foreign currency exchange rate fluctuations. Buyout-related integration risks continues to remain a concern. Partly due to these headwinds, Accenture shares are down 4.1% in the past year.
(You can read the full research report on Accenture here >>>)
Other noteworthy reports we are featuring today include NVIDIA Corp. (NVDA), Broadcom Inc. (AVGO) and Stryker Corp. (SYK).
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
Robust Portfolio, Services Strength to Benefit Apple (AAPL)
Chevron (CVX) to Gain from Massive Permian Acreage
Accenture (ACN) Gains From Service Demand Amid Talent Cost
NVIDIA (NVDA) Rides on Strong Adoption of GPUs, Partnerships
Per the Zacks analyst, rapid adoption of NVIDIA's GPUs in the datacenter and automotive markets is a key growth driver. Partnership with companies like Arrow, Baidu, Daimler and Bosch is a tailwind.
Strong Demand for Networking Products Aids Broadcom (AVGO)
Per the Zacks analyst, Broadcom is riding on robust demand for networking solutions. Strong adoption of next-gen merchant switching and routing solutions is driving top-line growth.
Diversified Product Portfolio Drives Stryker's (SYK) Prospects
Per the Zacks analyst, Stryker's diversified product portfolio, which include the robust Mako total knee platform, should support the growth of its global business.
Ventas (VTR) to Ride on SHOP Recovery, Life Science Assets
Per the Zacks Analyst, Ventas to benefit from the recovery in its senior housing operating portfolio (SHOP) and life science real estate investments. However, rising interest rates are a key woe.
Sarepta's (SRPT) Overdependence on DMD Drugs a Woe
Though Sarepta Therapeutics has a strong commercial portfolio of drugs targeting DMD indication, the Zacks Analyst is concerned about the company's dependence on a single target market for revenues.
Investments, Customer Growth Aid Essential Utilities (WTRG)
Per the Zacks analyst, Essential Utilities' (WTRG) $3.3 billion investment to fortify it water and natural gas infrastructure and demand from expanding customer base are going to boost its performance
Rising Premiums Aid Globe Life (GL), High Expenses Hurt
Per the Zacks analyst, Globe Life's growing premiums from Life and Health insurance and improved investment income have led to significant growth. However, escalating expenses remain a concern.
Ingersoll Rand (IR) Rides on Industrial Technologies Growth
The Zacks analyst is encouraged by growth in the company's Industrial Technologies & Services segment due to higher orders for compressors, and power tool and lifting.
Skechers' (SKX) Omni-Channel & Other Endeavors Hold Promise
Per Zacks analyst, Skechers is directing resources to boost digital capabilities, including augmenting website features, mobile application and loyalty program. Its international unit is a key driver.
Solid Telecommunications Business Demand Aids Dycom (DY)
Per the Zacks analyst, Dycom benefits from strong telecommunications business demand courtesy of its top five customers reflecting organic contract revenue growth.
Upstream Budget Tightness to Hurt ProPetro (PUMP)
The Zacks analyst believes that the tightness in the upstream companies' investment budget is likely to continue through this year, which is expected to weigh on ProPetro's revenues.
Escalating Costs and Seasonality Trouble H&R Block (HRB)
Per the Zacks analyst, the increasing costs have been acting as a headwind to H&R Block's performance. The seasonality of the business adds to such friction.
Reduced Chemical Software Spending To Hurt Aspen (AZPN)
Per the Zacks analyst, Aspen's performance is affected due to uncertain macroeconomic environment and cautious software spending in the chemical industry. Stiff competition is a headwind.
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