Wednesday, July 20, 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 Comcast Corporation (CMCSA), Texas Instruments Incorporated (TXN), and Philip Morris International Inc. (PM). 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 >>>
Comcast
shares have declined -27.0% over the past year against the S&P 500 index’s -16.5% in the same time period, with persistent video-subscriber attrition due to cord cutting in the core cable business and a leveraged balance sheet as the major worries.
However, strength in the broadband subscriber base and strong momentum in the wireless business. The company’s strategy to provide high-speed Internet at an affordable price plays a pivotal role in providing connectivity and improving customer experience.
Moreover, COVID-led increased media consumption and the work-from-home and online-learning waves bode well for Comcast’s Internet business. The company’s streaming service Peacock gained significant traction within a short span and is a key catalyst in driving broadband sales. Strong free cash flow generation ability is noteworthy
(You can
read the full research report on Comcast here >>>
)
Texas Instruments
shares have declined -13.1% over the past year against the Zacks Semiconductor – General industry’s decline of -16.1%. The zacks analyst believes that the company’s weakness in the personal electronics market remains a headwind. Further, intensifying market competition and coronavirus-related uncertainties are concerns.
A solid rebound in the automotive market and further, strong demand environment in the industrial, communication equipment and enterprise systems markets is a major positive. Additionally, solid momentum across Analog segment owing to robust signal chain and power product lines, is contributing well to the top line.
Also, robust Embedded Processing segment is contributing well. Notably, solid investments in new growth avenues and competitive advantages remain tailwinds. The company’s portfolio of long-lived products and efficient manufacturing strategies are other positives
(You can
read the full research report on Texas Instruments here >>>
)
Philip Morris
shares have declined -5.1% over the past year against the Zacks Tobacco industry’s decline of -1.8%. While supply chain issues and Russia/Ukraine exposure accounts for the stock’s modest underperformance relative to the peer group, its status as a stalwart defensive play and attractive dividend have helped it hold up a lot better than the broader market.
The war has further disrupted the global supply chain and has increased the inflationary pressure in certain materials and services. However, Philip Morris is benefiting from its pricing power, which aided its first-quarter 2022 results.
Strength in IQOS and the combustible business drove performance despite headwinds. Pricing for combustible products rose more than 3% and by roughly 6% on excluding Indonesia. Strength in the reduced-risk products category has been benefiting the company for a while now.
(You can
read the full research report on Philip Morris here >>>
)
Other noteworthy reports we are featuring today include Equinor ASA (EQNR), The Goldman Sachs Group, Inc. (GS), and Applied Materials, Inc. (AMAT).
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
Broadband Subscriber Gain Drives Comcast’s (CMCSA) Prospects
Automotive & Industrial Growth Aids Texas Instruments (TXN)
Philip Morris (PM) Benefits From Robust Pricing Efforts, RRPs
Featured Reports
Decent IB Backlog to Help Goldman (GS) Navigate Weak Markets
Robust client engagement, a solid position in announced and completed M&As globally, and a decent investment banking (IB) backlog are likely to aid in navigating weak markets.
Solid Medicaid Business Drives Humana (HUM) Amid High Costs
Per the Zacks Analyst, robust Medicaid business, courtesy of several contract wins, has aided the company in driving the top line. However, escalating expenses continue to weigh on margins.
Permian Basin Focus, Cost Management Aid Occidental (OXY)
Per the Zacks analyst Occidental’s acquisition of Anadarko expanded its operation in resource rich Permian Basin and efficient cost management will drive its performance over the long run.
Dow (DOW) Gains on Cost Actions, Project Investment
Per the Zacks analyst, Dow will gain from cost synergy savings and productivity actions and its investment in high-return growth projects amid headwinds from raw material and logistical constraints.
Lennar (LEN) Gains From SG&A Leverage, Higher Rates Hurt
Per the Zacks analyst, Lennar remains strong owing to improving SG&A leverage given continued benefits from technology initiatives. However, rising mortgage rates and home prices are risks.
Bio-Rad’s (BIO) Diagnostics Arm Thrives Despite Weak Margins
The Zacks analyst is Bio-Rad’s Diagnostics business which delivered robust currency-neutral sales growth in the Americas and Europe. Yet, contraction of both margins continues to raise concerns.
Applied Materials (AMAT) Rides on Foundry & Logic Spending
Per the Zacks analyst, solid customer spending in foundry and logic which are required in IoT, communications, 5G, automotive, power and sensor applications is benefiting Applied Materials.
New Upgrades
Equinor (EQNR) to Benefit From Rising Clean Energy Demand
The Zacks analyst is impressed by Equinor’s massive investments in renewable projects, comprising solar and wind energy. This makes the company poised to capitalize on the rising clean energy demand.
Lumen (LUMN) to Gain from Momentum in Quantum Fiber Business
Per the Zacks analyst, Lumen’s performance is likely to gain from the company’s investment in its growth initiatives for the Enterprise business and ramping of the Quantum Fiber business going ahead.
ProPetro (PUMP) to Benefit from Debt-Free Balance Sheet
The Zacks analyst likes ProPetro’s strong balance sheet, which has got zero debt to go with $70.8 million in cash $57 million available under the revolving credit facility.
New Downgrades
Overdependence on Linzess to Hurt Ironwood’s (IRWD) Growth Prospects
Per the Zacks analyst, Ironwood’s over dependence on its sole product Linzess can negatively impact its growth, hurting the top-line. Additionally, pipeline setbacks are a negative.
Weak Asset Quality, High Costs Ails Credit Acceptance (CACC)
Per the Zacks analyst, rising operating expenses are likely to hurt Credit Acceptance’s bottom line to some extent. Also, worsening credit quality and high levels of debt are other key near-term woes.
Elevated Expenses to Hurt State Street (STT) Bottom Line
Per the Zacks analyst, State Street is expected to witness a continued rise in expenses because of its investments in franchise. Thus, higher costs will likely hurt profits to an extent.
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