Thursday, June 30, 2022
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 Amazon.com, Inc. (AMZN), Accenture plc (ACN), and Comcast Corporation (CMCSA). 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 >>>
Amazon shares have significantly lagged the broader market lately, with the stock down -37.4% in the year-to-date period vs. -20.3% decline for the S&P 500 index. Amazon has missed top-line estimates in each of the last four quarters, as growth has decelerated in the post-pandemic period. Rising costs and over-capacity also appear to be headwinds. That said, Amazon remains the undisputed leader in ecommerce and cloud computing. Gaining on solid Prime momentum owing to ultrafast delivery services and strong content portfolio. Further, strengthening relationship with third-party sellers is a positive.
Also, growing momentum across Amazon Music is contributing well. Additionally, strong adoption rate of AWS is aiding the company’s cloud dominance. Also, expanding AWS services portfolio is continuously helping Amazon in gaining further momentum among the customers. Further, robust Alexa skills and expanding smart home products portfolio are positives. Additionally, the company’s strong global presence and solid momentum among the small and medium businesses remain tailwinds.
(You can read the full research report on Amazon here >>>)
Accenture shares have modestly underperformed the Zacks Consulting Services industry over the past year (-4.0% vs. -2.5%).
While Accenture is faced with a number of near-term challenges like increased competition from strong companies like Genpact, Cognizant and Infosys, and exposure to exchange rate fluctuations as a result of its global status, it has been steadily gaining traction in its outsourcing and consulting businesses. 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.
(You can read the full research report on Accenture here >>>)
Comcast shares have declined -29.7% over the past year against Zacks Cable Television industry’s decline of -31.5%. The company is persistently suffering from video-subscriber attrition due to cord-cutting. Moreover, a leveraged balance sheet is a major concern. However, Comcast is benefiting from strength in broadband subscriber base and strong momentum in the wireless business.
The company’s strategy to provide high-speed Internet at an affordable price plays a pivotal role in providing connectivity and improving customer experience. Moreover, COVID-led increased media consumption and the work-from-home and online-learning waves bode well for Comcast’s Internet business. The company’s streaming service Peacock gained significant traction within a short span and is a key catalyst in driving broadband sales. Strong free cash flow generation ability is noteworthy.
(You can read the full research report on Comcast here >>>)
Other noteworthy reports we are featuring today include Morgan Stanley (MS), Lockheed Martin Corporation (LMT), and Caterpillar Inc. (CAT).
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
Amazon (AMZN) Banks on Growing AWS Adoption & Prime Momentum
Accenture (ACN) Gains From Service Demand Amid Talent Cost
High Speed Internet Subscriber Gain Benefits Comcast (CMCSA)
Strategic Buyouts Aid Morgan Stanley (MS), High Costs Ails
Per the Zacks analyst, inorganic expansion plans to focus on less capital markets dependent businesses and solid balance sheet aid Morgan Stanley. Yet, rising operating costs remain a major concern.
Order Growth Boosts Lockheed (LMT), Tiff With Turkey Ails
Per the Zacks Analyst, steady order flow continues to boost Lockheed's revenue growth. Yet, the U.S. government's Tiff with Turkey over its involvement in Russia's S-400 may hurt F-35 program.
Spikevax's FDA Authorization To Aid Moderna's (MRNA) Top-Line
Per the Zacks Analyst, Moderna's (MRNA) revenues will continue to be driven by Spikevax sales, more so after FDA's emergency authorization for its use in the youngest population.
Intercontinental (ICE) Banks on Buyouts & Solid Balance Sheet
Per the Zacks analyst, Intercontinental Exchange is set to grow on a number of acquisitions and cost synergies. Moreover, a solid balance sheet provides financial flexibility.
Quest Diagnostics' (DGX) Base Business Grows Amid Dull Sales
Per the Zacks analyst Quest Diagnostics' legacy base business continues to gain share and grow revenues faster than the market. Yet, declining sales growth on low COVID-testing demand is concerning.
Sports Betting Expansion To Aid MGM Resorts (MGM), Traffic Low
Per the Zacks analyst, MGM Resorts is likely to benefit from sports betting expansion, asset light strategy and non-gaming activities. However, decline in traffic from pre-pandemic levels is a concern
Aspen (AZPN) to Gain From Product Portfolio & Acquisitions
Per the Zacks analyst, Aspen's diversified product portfolio is witnessing heathy momentum. The integration with Emerson's OSI Inc and the Geological Simulation Software business also bodes well.
Strong Demand, Strategic Initiatives Aid Caterpillar (CAT)
Per the Zacks analyst, Caterpillar is poised to gain from improving demand in its end markets and focus on strategic investments in expanded offerings, and services and digital initiatives.
Valero Energy (VLO) to Gain From Renewable Diesel Demand
Per the Zacks analyst, Valero Energy will continue to gain from improving demand for renewable diesel, backed by global low-carbon fuel policies.
Range Resources (RRC) Banks on Marcellus Shale Play Assets
The Zacks analyst is impressed by Range Resources' 3,100 undrilled wells in the Marcellus formation of the Appalachian Basin. The wells are likely to provide production for several decades.
Commodity Inflation & High Capex Ail Johnson Controls (JCI)
Per the Zacks analyst, volatile prices of metals and fuel impact Johnson Controls. Price inflation is likely to persist in the upcoming quarters. High capex also looks to dent cash flows and margins.
Soft Gross Margin a Concern for The Children's Place (PLCE)
Per the Zacks analyst, Children's Place's gross margin has been hit by higher inbound transportation costs and deleverage of fixed costs due to lower net sales. It expects margin to be under pressure.
High Costs, Concentration Risk Hurt Federated (FHI)
Per the Zacks analyst, rising expenses due to increased distribution expenses and expansion measures hurt Federated's financials. Investment advisory fees, as a key source of revenues, are worrisome.
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Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Morgan Stanley (MS) : Free Stock Analysis Report
Accenture PLC (ACN) : Free Stock Analysis Report
Caterpillar Inc. (CAT) : Free Stock Analysis Report
Comcast Corporation (CMCSA) : Free Stock Analysis Report
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