Friday, July 17, 2020
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 Adobe (ADBE), Coca-Cola (KO) and Honeywell International (HON). 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 >>>
Adobe shares have outperformed the Zacks Software industry over the past year (+38% vs. +31.6%), with the Zacks analyst expecting the momentum to continue on the back of the company’s market position, compelling product lines, solid adoption of Creative Cloud and Adobe marketing cloud.
Adobe is benefiting from strong demand for its creative products. Its Creative Cloud, Document Cloud and Adobe Experience Cloud products are driving the top-line growth. Further, rising subscription revenues and solid momentum across the mobile apps are major positives.
Additionally, growth in emerging markets, robust online video creation demand and improving average revenue per user are tailwinds. However, lower end-market demand and exposure to Europe remain overhangs. Further, high acquisition expenses do not bode well for margin expansion.
(You can read the full research report on Adobe here >>>)
Shares of Coca-Cola have lost -18.5% over the past six months against the Zacks Soft Drinks Beverages industry’s fall of -13.2%. The Zacks analyst believes that innovation and investment in core categories and brands have been the key focus areas, which led to the expansion of retail value share.
It is gaining from the effective execution of strategies to evolve as a consumer-centric total beverage company. Despite a beat, its top line declined in the first quarter as gains from a strong start to 2020 were offset by disruptions in the latter half of the quarter due to the coronavirus pandemic.
It witnessed a decline in unit case volume, while price/mix and concentrate sales remained flat. The company expects the pandemic to significantly hurt second-quarter results. Also, adverse currency impacts are likely to persist.
(You can read the full research report on Coca-Cola here >>>)
Honeywell shares have gained +13.6% over the past three months against the Zacks Diversified Operations industry’s rise of +14.1%. The Zacks analyst believes that strength in defense and space businesses as well as solid demand for its warehouse automation products is likely to boost Honeywell’s revenues in the quarters ahead.
Also, increased productivity and operational excellence initiatives are likely to improve the company’s near-term profitability. Its acquisitions will likely prove beneficial. The company is committed to rewarding shareholders handsomely through share repurchases and dividend payouts.
The company believes that the coronavirus outbreak-led market downturn and the volatile oil market will adversely impact its near-term results. Given its extensive geographic presence, its business is subject to political, economic and geopolitical issues. Rise in debt levels can increase its financial obligations.
(You can read the full research report on Honeywell here >>>)
Other noteworthy reports we are featuring today include PetroChina (PTR), Starbucks (SBUX) and Fiserv (FISV).
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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
Featured Reports
Upstream Unit Buoys PetroChina (PTR) Amid Gas Import Losses
The Zacks analyst believes oil production growth and lower lifting costs should aid PetroChina’s upstream unit outlook.
Digitalization Aid Starbucks (SBUX), Traffic Woes Linger
Per the Zacks analyst, enhanced customer experience and digitalization bode well for Starbucks. However, dismal store traffic owing to the coronavirus pandemic remain a concern.
Fiserv (FISV) Rides on Strategic Business Moves, Debt High
The Zacks analyst is impressed with Fiserv’s strategy to widen its client base and enhance its product portfolio with the help of buyouts and partnerships.
Eats Business Keeps Uber (UBER) Afloat Amid Weak Rides
The Zacks analyst is impressed by the continued surge in Uber’s Eats business. However, with coronavirus restricting people to their homes, ride volumes are significantly below year-ago levels.
Edwards (EW) Tackles Pandemic Crisis with SAPIEN 3 Rollout
The Zacks analyst is upbeat about the strong rollout of the SAPIEN 3 Ultra and positive feedback on improved paravalvular leak performance.
New Product Development, Wide Market Reach Aid Eaton (ETN)
Per the Zacks analyst Eaton’s investment in development of new products will continue to drive demand and boost profitability.
Steady Loan Growth Aids ICICI Bank (IBN), Asset Quality Ails
Per the Zacks analyst, ICICI Bank is likely to continue benefiting from loan demand and digitization efforts. Yet, deteriorating asset quality and increasing operating expenses remain concerns.
New Upgrades
Rising Loans Aid First Republic (FRC), Capital Level Solid
Per the Zacks analyst, organic growth remains a key strength at First Republic. Higher revenues reflect improving loan and deposit balances. Further, strong capital position is a favorable factor.
Improvement in Margins Continue to Aid PerkinElmer (PKI)
Per the Zacks analyst, improving gross and operating margins mainly owing to productivity initiatives and volume leverage continue to favor PerkinElmer.
Acquisitions, High Assets Balance Aid Invesco (IVZ) Revenues
The Zacks analyst believes that synergies from acquisitions, improving assets balance, diverse product offerings and widening global presence is expected to continue supporting Invesco’s revenues.
New Downgrades
Waning Phone Business & High Costs Plague CenturyLink (CTL)
Per the Zacks analyst, CenturyLink’s phone business has waned drastically over the past few quarters with substitution of the wireline services. High operating costs have further strained margins.
Coronavirus-Led Lockdown Hurts Sabre’s (SABR) Prospects
Per the Zacks Analyst, Sabre’s near-term prospects look gloomy as the coronavirus crisis is hurting the travel industry, thus affecting its travel bookings, financial condition and operating results.
Closure of Theatre Network, Higher Expenses Hurts IMAX (IMAX)
Per the Zacks Analyst, closure of the entire theater network and decrease in theater system installations due to the coronavirus pandemic is hurting IMAX’s top-line.
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