Wednesday, May 11, 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 Broadcom Inc. (AVGO), PepsiCo, Inc. (PEP), and Cisco Systems, Inc. (CSCO). 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
Broadcom
have outperformed the Zacks Electronics – Semiconductors industry over the past year (+35.9% vs. +12.2%). The Zacks analyst believes that the company is riding on continued strength across both Semiconductor solutions and Infrastructure software verticals. It is benefiting from a diverse customer base, which helped to distribute one billion Wi-Fi 6/6E chips over the past three years.
The company is also expected to benefit from the world’s first complete end-to-end chipset solutions for the Wi-Fi 7 ecosystem. In the server storage connectivity domain, much of the growth is anticipated to be driven by the continued recovery of enterprise IT spending deployed toward upgrading computer services.
An upbeat second-quarter fiscal 2022 guidance based on a strong uptick in broadband, networking and wireless revenues is encouraging. However, increasing competition along with high debt levels are persistent overhangs.
(You can
read the full research report on Broadcom here >>>
)
Shares of
PepsiCo
have outperformed the Zacks Beverages – Soft drinks industry over the past year (+21.0% vs. +13.4%). The company’s revenues and earnings beat the Zacks Consensus Estimate and improved year over year in the first quarter. This marked the 15th straight quarter of sales beat.
The Zacks analyst believes that the company is benefiting from the resilience and strength of global beverage and convenient food businesses. It expects to benefit by delivering convenience, variety, and value proposition to customers through its brands.
It raised its revenue view for 2022. However, PepsiCo witnessed margin pressures in the first quarter driven by impacts of supply-chain disruptions and inflationary labor, transportation, and commodity costs. PEP anticipates incremental input cost inflation for the balance of 2022.
(You can
read the full research report on PepsiCo here >>>
)
Cisco
shares have declined -1.4% over the past year against the Zacks Computer – Networking industry’s gain of -2.2%. The Company’s management cautioned that component shortages and ongoing supply chain issues are expected to persist in the rest of fiscal 2022 and bump up costs. This is likely to dent revenues and margin expansion.
However, the Zacks analyst believes that the company’s performance is benefiting from strength in its product portfolio, customer segments, and momentum in product order growth. Strength in Webscale business and solid uptake of switching solutions, especially Catalyst 9000 and Meraki offerings, along with robust adoption of the company’s subscription-based offerings were tailwinds.
The company is also benefiting from healthy uptake of identity and access, advanced threat, and unified threat management security solutions amid high growth in Internet traffic. The buyout of Acacia Communications bodes well for the long haul.
(You can
read the full research report on Cisco here >>>
)
Other noteworthy reports we are featuring today include Medtronic plc (MDT), EOG Resources, Inc. (EOG), and Pioneer Natural Resources Co. (PXD).
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
Broadcom (AVGO) Rides on Strong Demand for Wireless Products
PepsiCo’s (PEP) Business Investments to Bolster Performance
Cisco (CSCO) Benefits From Strong Security Products Adoption
Featured Reports
Business Recovery Aids Medtronic (MDT) Amid Stiff Rivalry
The Zacks analyst is impressed with Medtronic’s business growth in the fiscal third quarter banking on strong new product flow and overall market recovery. Yet, stiff competition remains a concern.
Pioneer Natural (PXD) Banks On Oil-Rich Permian Basin Assets
The Zacks analyst believes that Pioneer Natural’s one-million-plus high-quality acreages in the Permian Basin will drive long-term oil production growth.
Moderna’s (MRNA) $21B Contracts May Offset Rising Competition
Per the Zacks analyst, Moderna’s advance purchase agreement for Spikevax worth $21 billion for 2022 may help the company to defend itself against rising competition from other COVID-19 vaccine & pills
CNA Financial (CNA) Banks on Solid Premiums Amid High Costs
Per the Zacks analyst, CNA Financial is set to grow on solid Specialty, Commercial and International segment, which will drive improvement in net premiums. However, high costs remain a concern.
Strong Balance Sheet Supports UMB Financial (UMBF)
Per the Zacks analyst, UMB Financial’s strong loans and deposits and diversified fee income are likely to boost its financials. Further, enhanced capital-deployment activities are also tailwinds.
Reliable Assets, Free Cash Flow Plan Aid CNX Resources (CNX)
Per the Zacks analyst CNX Resources’ Marcellus and Utica shales assets will continue to boost production and long-term plan to generate $3.3 billion free cash flow will help to fortify balance sheet.
Aptiv (APTV) Rides on Acquisitions Amid Rising Expenses
The Zacks analyst believes that Aptiv is well poised to gain from acquisitions & collaborations that help it capitalize on developing automotive markets. Technology investments continue to raise costs
New Upgrades
EOG Resources (EOG) Banks on Eagle Ford & Delaware Basin
The Zacks analyst likes EOG Resources since the leading upstream player has a strong footprint in prolific oil-rich resources like Eagle Ford & Delaware Basin.
Cost Reductions, Capacity Expansion Aid ArcelorMittal (MT)
Per the Zacks analyst, the company will gain from actions to expand its steel-making capacity and advanced high strength steel product line. Cost-cutting actions will also support its bottom line.
Strong Automotive End-Market Aids onsemi’s (ON) Prospects
Per the Zacks analyst, onsemi benefits from strong demand for its solutions in the automotive end-market. Its fab-lighter strategy is expected to drive gross margin expansion.
New Downgrades
Goodyear (GT) Struggles in the Face of Cost Woes, Huge Debt
Surging commodity and operating expenses are likely to worsen Goodyear’s balance sheet, which is already burdened with high debt levels, per the Zacks analyst.
Qorvo (QRVO) Plagued by Supply Chain Woes, Price Volatility
Per the Zacks analyst, fresh lockdown restrictions in China, raw material price volatility and supply chain disruptions have dented the profitability of Qorvo, resulting in a muted outlook.
Project Delay, Supply Issue Ail MasTec’s (MTZ) Oil & Gas Unit
Per the Zacks analyst, large project timing and regulatory delays in the Oil & Gas segment as well as higher costs and expenses has been hurting MasTec.
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