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Top Analyst Reports for Visa, Netflix & Adobe

Monday, June 17, 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 Visa Inc. (V), Netflix, Inc. (NFLX) and Adobe Inc. (ADBE). 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 >>>

Shares of Visa have gained +18.2% over the past year against the Zacks Financial Transaction Services industry’s gain of +23.1%. The company’s strategic acquisitions and alliances are fostering long-term growth and consistently driving its revenues. It expects net revenues to increase in low double digits for fiscal 2024.

Visa, fueled by increased payments, cross-border volumes and sustained investments in technology, is witnessing significant profit growth. It reported strong fiscal 2Q24 results. The ongoing shift to digital payments is advantageous for Visa, with strong domestic volumes supporting its overall performance. A robust cash position enables the company to enhance shareholder value.

However, elevated operating expenses pose margin challenges. It is witnessing a volatile cash volume from the Asia Pacific and CEMEA regions. Moreover, rising client incentives will affect its adjusted revenues.

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

Netflix’s shares have outperformed the Zacks Broadcast Radio and Television industry over the year-to-date period (+37.5% vs. +14.1%). The company is benefiting from its growing subscriber base, thanks to a robust portfolio. Crackdown on password-sharing and the introduction of paid sharing in more than 100 countries, which represents over 80% of Netflix’s revenue base, is also expected to aid growth.

Netflix’s diversified content portfolio, which is attributable to heavy investments in the production and distribution of localized and foreign-language content, has been driving its growth prospects

However, stiff competition in the streaming space from the likes of Apple, Amazon Prime Video, Disney+, Peacock and Paramount+ is a headwind. Netflix’s leveraged balance sheet and a higher streaming obligation are concerns. Additionally, unfavorable forex is expected to hurt operating income in the second quarter of 2024.

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

Shares of Adobe have underperformed the Zacks Computer - Software industry over the year-to-date period (-11.9% vs. +14.2%). The company reported strong fiscal second-quarter results wherein both earnings and revenues grew year over year. The company’s Creative Cloud, Document Cloud and Adobe Experience Cloud products drove the top-line growth.

Further, rising subscription revenues and solid momentum across the mobile apps remained major positives. Growth in emerging markets, robust online video creation demand, and solid adoption of Acrobat and Firefly are tailwinds. Continued key customer wins of the company are contributing well.

The Zacks analyst remain optimistic about Adobe’s market position, compelling product lines, continued innovation, strategic acquisitions and solid adoption of cloud applications. However, the ongoing tensions between Russia and Ukraine remain major headwinds for Digital Media segment.

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

Other noteworthy reports we are featuring today include Morgan Stanley (MS), Occidental Petroleum Corp. (OXY) and Howmet Aerospace Inc. (HWM).

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

Visa (V) Rides on Increasing Payments Volume, Expenses High

Netflix (NFLX) Rides on Subscriber Growth, Original Content

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Adobe (ADBE) Rides on Growing Adoption of Cloud Applications

Featured Reports

Planned Investments, Permian Basin Focus Aid Occidental (OXY)
Per the Zacks analyst Occidental's investments to strengthen infrastructure and expansion of Permian Basin operation through acquisition will drive its performance over the long run.

Strength in Engine Products Unit Aids Howmet Aerospace (HWM)
Per the Zacks analyst, solid performance of Howmet Aerospace's Engine Products unit, fueled by strength in the commercial aerospace, defense aerospace and industrial markets, will lend it momentum.

Equifax (EFX) Benefits From Acquisitions Amid Low Liquidity
Per the Zacks analyst, acquisitions have enabled Equifax to provide a broad insight into consumer performance and explore market opportunities over time. Low liquidity is concerning.

FDA Nod to Sarepta's (SRPT) DMD Gene Therapy Fuels Growth
The Zacks Analyst is encouraged by the FDA approval to Sarepta's Elevidys, the first gene therapy for DMD. Based on this approval, it has started exploring opportunities in the gene therapy space.

Demand for Premier Office Spaces Aid Boston Properties (BXP)
Per the Zacks analyst, a healthy demand for premier office assets, diverse tenant base and healthy balance sheet bode well for Boston Properties despite an elevated supply and high interest rates.

APA Corporation (APA) to Gain from Suriname Portfolio
The Zacks analyst believes that APA's significant drilling success in Suriname points to significant cash flow potential but is worried about the oil explorer's high debt burden.

Robust Diagnostics Aid Veracyte (VCYT), Rising Expenses Ail
Per the Zacks Analyst, the success of Veracyte's diagnostic platform in capturing market share is evident from the Decipher Prostate and Afirma tests. Yet, the operating loss trend is concerning.

New Upgrades

Restructuring Efforts, Acquisitions Aid Morgan Stanley (MS)
Per the Zacks analyst, high rates, strategic alliances, global footprints and Morgan Stanley's focus on less capital-markets dependent operations will keep on aiding financials in the upcoming period.

Logitech (LOGI) Rides on Remote Working Tool Demand
Per the Zacks analyst, Logitech is benefiting from the increased demand for products that aid remote working and operation continuity plans amid the growing hybrid working trend.

Business Wins and Low Leverage to Aid BorgWarner (BWA)
Per the Zacks analyst, BorgWarner's frequent business wins are set to drive its top-line growth. Manageable long term debt ratio of 0.35 also bodes well.

New Downgrades

Soft Equipment Business, Competition Ail America Movil (AMX)
Per the Zacks analyst, America Movil's performance is adversely affected by slowdown in the equipment business coupled with tough competition in the telecommunication space.

V.F. Cor's (VFC) Performance Hurt by Weak Wholesale Unit
Per the Zacks analyst, V.F. Corp has been witnessing a dismal wholesale performance, along with sluggishness in the Americas and Vans brand. Wholesale sales fell 20% in fourth-quarter fiscal 2024.

Dismal Comps and Weather Woes Hurt Dave & Buster's (PLAY)
Per the Zacks analyst, Dave & Buster's operations are likely to be hurt by challenging weather conditions and lower comps. Also, higher labor and commodities costs are added concerns.

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

Morgan Stanley (MS) : Free Stock Analysis Report

Visa Inc. (V) : Free Stock Analysis Report

Netflix, Inc. (NFLX) : Free Stock Analysis Report

Occidental Petroleum Corporation (OXY) : Free Stock Analysis Report

Adobe Inc. (ADBE) : Free Stock Analysis Report

Howmet Aerospace Inc. (HWM) : Free Stock Analysis Report

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Zacks Investment Research