Monday, May 2, 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 Apple Inc. (AAPL), Intel Corp. (INTC), and Citigroup Inc. (C). 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 >>>
Apple
shares have gained +19.1% over the past year against the Zacks Computer – Mini computers industry’s gain of +20.0%. The Zacks analyst believes that the company is benefiting from continued momentum in the Services and robust performance from iPhone, Mac, Wearables and an expanding App Store ecosystem. Availability of new Mac Studio and new iPad Air is expected to drive top-line growth. Apple TV+ is gaining recognition due to award winning shows. This bodes well for the Services segment. Services revenue growth is expected to be in strong.
However, COVID-induced supply chain disruptions and industry-wide silicon shortages will probably hurt the top line by $4-$8 billion. Unfavorable forex is also expected to hurt revenues. Absence of Russian revenues will hurt the top line.
(You can
read the full research report on Apple here >>>
)
Intel
shares have declined -13.8% over the year to date basis against the Zacks Semiconductor – General industry’s decline of -25.5%. The Zacks analyst believes that Client Computing Group is expected to suffer due to component shortage. Production delays pertaining to 7 nm ramp up remain a concern. A strained Sino-U.S. trade relationship, imposition of fresh lockdown restrictions in some markets, forex woes and high debt burden remain other concerns.
However, the company expects demand to pick up in the second half of the year. Intel is riding on prospects of the Internet of Things and Mobileye businesses. Recovery in the enterprise business of the data center segment is a positive. Mobileye growth should be driven by design wins amid recovering automotive industry.
(You can
read the full research report on Intel here >>>
)
Citigroup
shares have declined -18.5% over the year to date basis against the Zacks Banks – Major Regional industry’s decline of -17.9%. The company’s high expenses on transformation investments might limit bottom-line growth. The elimination of overdraft fees will hinder fee income growth in the near term.
However, rise in deposit balances and book value per share were positives, low capital market activity ailed first-quarter results. Advancing with its strategy to exit the consumer banking business in 14 international markets, Citigroup has signed nine deals to sell such businesses to simplify operations and focus on institutional franchises. Net interest income growth and decent liquidity are positives.
(You can
read the full research report on Citigroup here >>>
)
Other noteworthy reports we are featuring today include General Dynamics Corp. (GD), Nutrien Ltd. (NTR), and KLA Corp. (KLAC).
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
Robust Portfolio, Services Strength to Benefit Apple (AAPL)
Intel (INTC) Aims to Benefit from Solid Demand Trends
Focus on Core Operations Aid Citigroup (C), Cost Woes Linger
Featured Reports
Order Growth Aids General Dynamics (GD), Sanction Impacts Hit
Per the Zacks Analyst, order flow for its products boost General Dynamics’ revenue generation prospects. Yet, the Russia-Ukraine conflict and resultant global sanctions may hurt its growth prospects.
Baker Hughes (BKR) Gains from Higher Oilfield Service Order
Per the Zacks analyst, Baker Hughes will secure handsome cash flows from higher oilfield services order intake. However, the company’s rising costs and expenses remain a concern.
KLA (KLAC) Benefits From Growing Foundry/Logic Investments
Per the Zacks analyst, KLA is gaining from increasing investments across multiple nodes. This is driving its growth in the Foundry/Logic market.
Paychex (PAYX) Benefits From Buyouts Amid Higher Expenses
The Zacks analyst likes Paychex’s efforts to boost revenue growth through acquisitions. PEO insurance costs, buyouts, and investments in sales, marketing and product development raise expenses.
Hartford’s (HIG) Strategic Initiatives to Boost Bottom Line
Per the Zacks analyst, several strategic moves like lowering costs & divesting non-core assets will lead to significant profits for Hartford Financial. Exposure to catastrophic events remains a woe.
New Upgrades
Nutrien (NTR) Gains on Strong Demand and Higher Prices
Per the Zacks analyst, the company will gain from solid demand for fertilizers driven by the strength in global agriculture markets. Higher prices for crop nutrients will also support its margins.
Gains from BrandsMart to Aid Aaron’s (AAN) Top Line in 2022
Per the Zacks analyst, Aaron’s has been witnessing accretive gains from the acquisition of BrandsMart. As a result, it raised 2022 revenues outlook to $2.32-$2.39 billion from $1.775-$1.825 billion.
New Downgrades
Weak Home-Furnishings Space Ails Overstock.com (OSTK)
Per the Zacks analyst, Overstock.com is suffering from weakness in the home-furnishing market. Stiff competition, particularly from Wayfair, its peer in home furnishing, is a concern.
Commodity Inflation to Weigh on Oshkosh (OSK) Margins
The Zacks analyst believes that high costs of commodities, especially steel and aluminum, are likely to dent Oshkosh’s margins. To that end, the company has also trimmed its 2022 EPS projection.
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