Friday, April 29, 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 T-Mobile US, Inc. (TMUS), Deere & Company (DE), and PayPal Holdings, Inc. (PYPL). 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
T-Mobile
have outperformed the Zacks Wireless National industry over the year to date basis (+12.6% vs. +2.5%). The company is on track to complete the Sprint customer network migration mid-year and decommissioning by the year-end. Its Extended Range 5G covers 315 million people or 95% of Americans. The Ultra Capacity 5G covers 225 million people and nearly 85% of T-Mobile’s customers. About 45% of postpaid customers are using a 5G phone, and 5G devices account for more than half of the total network traffic.
However, it operates in a fiercely competitive and almost saturated U.S. telecom market. Low-priced plans for consumers and small enterprises have not improved the bottom line. Promotional activities to lure customers from rivals hurt its profitability.
(You can
read the full research report on T-Mobile here >>>
)
Shares of
Deere
have outperformed the Zacks Manufacturing – Farm Equipment industry over the past year (+5.6% vs. +2.8%). The Zacks analyst believes the ongoing rally in commodity prices will continue to fuel agricultural equipment demand, encouraging farmers to boost spending on new farm equipment. Replacement demand to upgrade old equipment will support Deere’s top-line results. Demand for farm and construction equipment will continue to be supported by positive fundamentals, including favorable crop prices, economic growth and increased infrastructure spending in fiscal 2022.
Deere is likely to benefit from growth in non-residential investment and strong order activity from independent rental companies. Focus on investing in new products equipped with the latest technology will make farming automated, which will drive Deere’s growth. However, higher material and labor costs are likely to dent margin.
(You can
read the full research report on Deere here >>>
)
PayPal
shares have declined -64.8% over the past year against the Zacks Internet – Software industry’s decline of -51.4%, primarily reflecting sentiment shift in the current rising rate environment. The company’s intensifying competition in the digital payment market poses a serious risk to the company’s market position. Also, foreign exchange headwinds remain concerns. The stock has underperformed its industry on a year-to-date basis.
However, first quarter results were driven by strong growth in total payments volume owing to increasing net new active accounts. Strengthening customer engagement was a positive. Also, strong performance by Venmo and merchant services contributed well to the TPV growth. Additionally, boom in digital payment owing to the coronavirus pandemic, remains a tailwind.
The Zacks analyst believes that growing transaction revenues are likely to continue driving the top-line growth. Also, solid momentum across peer to peer and PayPal Checkout experiences is a tailwind. PayPal’s growing traction in the United States is a positive.
(You can
read the full research report on PayPal here >>>
)
Other noteworthy reports we are featuring today include Raytheon Technologies Corporation (RTX), The PNC Financial Services Group, Inc. (PNC), and Edwards Lifesciences Corporation (EW).
Sheraz Mian
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
T-Mobile (TMUS) Rides on 5G Leadership, Customer Growth
Deere (DE) Rides on Farm Equipment Demand Amid Higher Costs
PayPal (PYPL) Benefits From Increasing Total Payment Volume
Featured Reports
Order Growth Aids Raytheon (RTX) Amid Purchase Oder Fall
Per the Zacks analyst, a solid order flow from the Pentagon and its foreign allies should boost Raytheon. Yet, purchase order declines due to OEM order cancellation might hurt the stock.
Acquisitions Support PNC Financial (PNC) Despite High Costs
Per the Zacks analyst, PNC Financial’s solid balance-sheet position allows it to grow through acquisitions. Yet, persistent rising costs due to investment in technology might limit bottom-line growth
Edwards’ (EW) Banks on TAVR Arm Amid Stiff Competition
The Zacks analyst is impressed with Edwards’ TAVR arm robust growth in the first quarter 2022 banking on increased customer adoption for the SAPIEN platform. Yet, stiff rivalry remains a concern.
lululemon (LULU) Tracks Well with E-commerce Expansion Plans
Per the Zacks analyst, lululemon is heavily investing in e-commerce capabilities like developing sites, transactional omni functionality and fulfilment options to capture the growing online demand.
Dividends Lift Norfolk Southern (NSC) Despite Cost Woes
The Zacks analyst is impressed with the company’s efforts to pay out dividends even in the current uncertain scenario. High costs due to elevated oil price are, however, limiting bottom-line growth.
New Buyouts Aid Boston Scientific (BSX), Core CRM Sales Grow
Per the Zacks analyst, Boston Scientific is gaining from its strategic buyouts of Preventice, Farapulse and Lumenis Surgical. Growth in core Cardiac Rhythm Management (CRM) organic sales Aids.
Discover Financial (DFS) High Card Sales Aid Amid High Costs
Per the Zacks analyst, increasing card sales volume, backed by alliances and partnerships, is driving Discover Financial’s performance. Yet, rising expenses remain a concern for the company.
New Upgrades
Strong Demand for Key Drugs Drive BioMarin’s (BMRN) Topline
While BioMarin’s (BMRN) key drugs like Vimzim and Naglazyme have been driving sales, the Zacks Analyst is encouraged by rapid uptake for new drug, Voxzogo which has opened up a new sales opportunity.
Cadence (CDNS) Benefits from Diversified Product Portfolio
Per the Zacks analyst, Cadence’s performance is gaining from solid demand for the company’s diversified product portfolio, Frequent new product launches will further drive the growth momentum.
NVR Benefits From Solid Housing Market & Business Model
Per the Zacks analysts, solid housing market backdrop, unique business model and strong orders are helping NVR to generate higher revenues and thereby profits.
New Downgrades
Game Launch Delay, Stiff Competition Hurts Activision (ATVI)
Per the Zacks analyst, Activision is suffering from intensifying competition from the likes of EA, Take Two Interactive and Nintendo. Delayed launch of Overwatch 2 and Diablo IV is a concern.
Escalating Costs & High Debts Hurt Community Health (CYH)
Per the Zacks analyst, the company’s high costs can put margins under pressure. Rising debts remain a concern as it leads to escalated interest expenses.
Staffing Challenges & Inflation Hurt Domino’s (DPZ) Prospects
Per the Zacks analyst, Domino’s is experiencing Omicron-induced staffing and supply-chain challenges. Also, commodity and restaurant labor cost inflation is a concern.
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