Thursday, December 15, 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 Adobe Inc. (ADBE), Salesforce, Inc. (CRM) and Lowe’s Companies, Inc. (LOW). 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
Adobe
have underperformed the Zacks Computer – Software industry over the past year (-40.0% vs. -24.7%). The company’s facing ongoing tensions between Russia and Ukraine remain major headwinds for its Digital Media segment. Also, high acquisition expenses do not bode well for its margin expansion.
However, Adobe is benefiting from strong demand for its creative products. The company’s 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 and robust online video creation demand remain tailwinds.
Additionally, solid demand for Adobe’s commerce offerings and growing adoption of Acrobat. We remain optimistic about Adobe’s market position, compelling product lines and continued innovation. Considering the aforesaid facts, the Zacks analyst expect fiscal 2022 revenue to grow 11.5% year over year.
(You can
read the full research report on Adobe here >>>
)
Shares of
Salesforce
have underperformed the Zacks Computer – Software industry over the past year (-46.8% vs. -24.7%). The company is facing stiff competition is a concern. Besides, unfavorable currency fluctuations along with increasing investments in international expansions and data centers are an overhang on near-term profitability.
However, Salesforce is benefiting from a robust demand environment as customers are undergoing a major digital transformation. The rapid adoption of its cloud-based solutions is driving demand for its products. Its sustained focus on introducing more aligned products as per customer needs is driving its top-line.
Continued deal wins in the international market is another growth driver. The acquisition of Slack would position the company to be a leader in enterprise team collaboration solution space and better compete with Microsoft’s Teams product. The Zacks analyst expect CRM revenues to grow at a CAGR of 12.5% through fiscal 2023-2025.
(You can
read the full research report on Salesforce here >>>
)
Lowe’s
shares have outperformed the Zacks Building Products – Retail industry over the past six months (+23.6% vs. +22.1%). The company remains well-positioned to capitalize on demand for the home improvement market, backed by investments in technology, merchandise category and strength in Pro business.
Lowe’s posted sturdy earnings results for third-quarter fiscal 2022 wherein the top and the bottom line beat the Zacks Consensus Estimate and grew year over year. Results benefited from higher comparable sales (comps) and Pro sales as well as improved DIY sales trends.
The company witnessed a substantial improvement in its adjusted operating margin on disciplined execution and cost management. Management is committed to enhancing the Pro offerings, expanding Lowe’s market share and driving its operating margin. The Zacks analyst expects revenues of $97-98 billion (including the 53rd week) for fiscal 2022.
(You can
read the full research report on Lowe’s here >>>
)
Other noteworthy reports we are featuring today include Eni S.p.A. (E), UDR, Inc. (UDR) and Las Vegas Sands Corp. (LVS).
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
Adobe (ADBE) Rides on Growing Adoption of Cloud Applications
Digital Transformation and Acquisitions Aid Salesforce (CRM)
Lowe’s (LOW) Digital and Pro Businesses Appear Good
Featured Reports
Eni SpA (E) Banks on Significant Oil & Gas Discoveries
The Zacks analyst likes Eni as it is banking on huge oil & gas discoveries, mainly in Cyprus, UAE & Algeria. But, significantly high costs related to purchases, services and other hurt bottom line.
Solid Portfolio Mix, Technology Moves Bode Well for UDR
Per the Zacks Analyst, UDR Inc’s diverse portfolio with a superior product mix of A/B quality properties and technological moves bode well. However, elevated supply and interest rate hikes are woes.
Las Vegas Sands (LVS) Banks on Macao Business, Traffic Dismal
Per the Zacks analyst, Las Vegas Sands is likely to benefit from revenue diversification efforts and planned investment in new projects in Macao. However, dismal traffic owing to the pandemic hurts.
STERIS (STE) Sterilization Wing Grows on New Customer Uptake
The Zacks analyst expects STERIS’ Applied Sterilization business to continue to put up a robust performance on growing demand from medical device and biopharma customers.
Repligen (RGEN) Sales Fuel Growth Despite COVID-19 Headwinds
Repligen’s product franchises continue to witness robust demand driven by both organic growth and acquisitions. The Zacks Analyst is concerned about the company’s declining COVID-related sales.
Dividends & Buybacks Lift Triton (TRTN), High Costs Hurt
The Zacks analyst is impressed with Triton’s efforts to reward its shareholders through dividends and buybacks. However, elevated operating expenses are limiting bottom-line growth.
Technology Development Aids Envestnet (ENV), Liquidity Low
Per The Zacks analyst, Envestnet’s continued focus on technology development is helping it to improve operational efficiency and increase market competitiveness. Low liquidity remains a concern.
New Upgrades
Zscaler (ZS) Benefits From Acquisitions & Product Refreshes
Per the Zacks analyst, Zscaler is benefiting from its strategic acquisitions like Smokescreen and Trustdome. Moreover, frequent product refreshes are helping it in gaining new customers.
Solid Demand Continues to Aid Dillard’s (DDS) Performance
Per the Zacks analyst, Dillard’s has been witnessing continued momentum in demand for cosmetics, men’s apparel and accessories, home and furniture, and shoes. This led to Q3 sales growth of 4.3%.
MGIC Investment (MTG) is Set to Grow on New Insurance Written
Per the Zacks analyst, MGIC Investment is set to grow on new insurance written aided by the increase in the mortgage origination market and higher refinance activity.
New Downgrades
Silicon Motion (SIMO) Marred by Supply Woes, Soft Demand
Per the Zacks analyst, Silicon Motion is likely to be affected by pandemic-led production delays, supply chain headwinds and sluggishness in the global economy, hindering its near-term prospects.
Supply Chain Issues and Tight Labor Market Hit L3Harris (LHX)
Per the Zacks analyst, component shortages due to supply chain constraints along with tight labor markets may continue to hinder L3Harris’ operational performance at least in the near term.
Supply Chain & Forex Woes Weigh on Stanley Black (SWK)
The Zacks analyst is concerned about persistent supply chain issues, mainly semiconductor shortages, hurting the company’s operations. A soft demand environment and forex woes are also troublesome.
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