Thursday, May 18, 2023
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 14 major stocks, including PepsiCo, Inc. (PEP), Salesforce, Inc. (CRM) and Advanced Micro Devices, Inc. (AMD). 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 >>>
PepsiCo shares have lagged the S&P 500 index this yeara (+5.4% vs. +9.4%), but have handily outperformed rival Coke (down -1.7% year-to-date). The company’s Q1 results on April 25th reflected gains from strength and resilience in its diversified portfolio, modernized supply chain, improved digital capabilities, flexible go-to-market distribution systems and robust consumer demand trends.
It also gained from the resilience and strength in the global beverage and convenient food businesses. However, PepsiCo witnessed margin pressures in the first quarter driven by impacts of supply-chain disruptions and inflationary labor, transportation and commodity costs. Adverse currency rates also remain headwinds.
(You can read the full research report on PepsiCo here >>>)
Shares of Salesforce have outperformed the Zacks Computer - Software industry over the past year (+34.5% vs. +24.5%). The company 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.
However, stiff competition and unfavorable currency fluctuations are concerns. Besides, challenging macroeconomic environment might hurt its growth prospects in the near-term.
(You can read the full research report on Salesforce here >>>)
AMD shares have outperformed the Zacks Electronics - Semiconductors industry over the past six months (+43.2% vs. +24.2%). The company is benefiting from strong demand for its products in industrial, vision and health care, test and emulation, communications, aerospace and defense, and automotive end-markets. Embedded segment reported strong growth.
For second quarter of 2023, AMD expects to witness growth in Embedded segment, partially offset by a decline in the Client, Gaming and Data Center segments on a year-over-year basis. AMD is benefiting from strong product portfolio and acquisitions including Xilinx and Pensando, which has diversified its business.
Robust adoption of EPYC processors by North American hyperscalers has been a tailwind. Alliances with Amazon, Microsoft, Baidu and JD.com augment business prospects. However, stiff competition from NVIDIA and Intel is a concern.
(You can read the full research report on AMD here >>>)
Other noteworthy reports we are featuring today include ConocoPhillips (COP), Centene Corporation (CNC) and Gartner, Inc. (IT).
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
PepsiCo's (PEP) Investments in Business Drive the Top Line
Digital Transformation and Acquisitions Aid Salesforce (CRM)
Robust Product Portfolio & Partnerships Aid AMD's Prospects
ConocoPhillips (COP) Banks On Oil-Rich Bakken Shale Assets
The Zacks analyst is upbeat about the 750 undrilled Bakken Shale play locations of ConocoPhillips, which will drive oil production growth. Yet, rising production and operating costs are concerning.
Strategic Acquisitions Aid Centene (CNC), High Costs Hurt
Per the Zacks analyst, several buyouts such as that of Magellan Health and WellCare poise the company well for growth. However, elevated expenses remain a concern.
Gartner (IT) Gains from Deep Domain Expertise, Liquidity Low
Per the Zacks analysts, Gartner's domain expertise is key to providing insights and decision support solutions for an informed decision-making process. Low liquidity remains a concern.
Occupier Outsourcing, Cost Control to Aid CBRE Group (CBRE)
Per the Zacks Analyst, CBRE Group to ride high on growing occupier outsourcing business, diversification efforts and cost management. However, macroeconomic uncertainty remains a key concern.
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.
Solid Pent Up Demand Aid Hyatt (H) Amid Stiff Competition
Per the Zacks analyst, strong RevPAR and ADR growth owing to higher leisure and business travel demand aid Hyatt. However, stiff industry competition hurts.
Permian Basin Presence, JV Aid Plains All American (PAA)
Per the Zacks analyst, Plains All American will benefit from rise in production from the Permian region with a revival in demand for midstream services. Its joint ventures is expected to drive earning
Akamai (AKAM) Rides on Solid Cloud, Security Solutions Demand
Per the Zacks analyst, Akamai is likely to benefit from higher demand for security solutions and data computing at the edge, triggered by rapid deployment of 5G and IoT devices proliferation.
Permian Expansion, Acquisitions Aid U.S. Silica (SLCA)
Per the Zacks analyst, the company will gain from its actions to expand in the fast-growing Permian Basin. Sandbox and EP Minerals buyouts also provide a strong platform for growth and expansion.
Higher Input Costs, China Slowdown Ail Mosaic (MOS)
Per the Zacks analyst, higher raw material costs due to tight supply will hurt the company's margins. Slowdown in China due to new pandemic-led lockdowns will also impact fertilizer demand.
High Operating Expenses & Supply Chain Woe To Ail Thor (THO)
Per the Zacks analyst, escalating selling, general and administrative expenses costs over the past few years gives Thor a hard time. Ongoing chassis supply challenges is also a concern.
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