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Top Stock Reports for Cisco, SAP & Gilead

Mark Vickery

Monday, October 14, 2019

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 Cisco Systems (CSCO), SAP (SAP) and Gilead Sciences (GILD). 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 >>>

Cisco’s shares have outperformed the Zacks Computer Networking industry year to date (7.4% vs. 6.4%). The Zacks analyst believes that Cisco is benefiting from solid security business. Strong contribution from Infrastructure Platforms and applications is a positive.

Moreover, order strength and improving traction of the subscription-based business model are tailwinds. Further, a strengthening collaboration portfolio, which includes Webex Teams, bodes well. Additionally, acquisitions of Voicea and CloudCherry hold promise.

However, weakness in service provider business in China remains a concern. Further, stiff competition from Arista and Juniper in switching and routing verticals is likely to create pricing pressure and impact profitability. Also, increasing investments on product enhancements are likely to limit margin expansion at least in the near term.

(You can read the full research report on Cisco here >>>)

Shares of SAP have gained 11.8% in the past six months against the Zacks Computer Software industry’s rise of 7.9%. The Zacks analyst believes that SAP is benefiting from strong growth in cloud and software revenues, and an expanding customer base.

Robust adoption of S/4HANA, C/4HANA and SuccessFactors Employee Central favors the company’s prospects. Notably, despite the exit of CEO Bill McDermott, estimates have been moving north ahead of the company’s Q3 earnings release primarily on robust preliminary results courtesy of an upbeat cloud business. Further, Qualtrics’ acquisition is enabling SAP to bolster Customer Experience segment revenues.

Moreover, strong demand for SAP's Intelligent Spend offerings holds promise. However, increasing investments to enhance cloud-based offerings are likely to weigh on the bottom line. Currency fluctuations and trade war between the United States and China remains an overhang on software licenses revenue growth particularly across Asia.

(You can read the full research report on SAP here >>>)

Gilead’s shares have lost 6% over the past three months compared with the Zacks Biotech industry’s fall of 7%. The Zacks analyst believes Gilead’s HIV franchise maintains momentum on the continued uptake of Genvoya and Odefsey, and the strong uptake of Biktarvy.

The company has shifted focus to the HIV franchise and newer avenues like CAR-T therapy and NASH, due to a decline in sales of the HCV franchise. The FDA recently approved a label expansion of HIV treatment, Descovy. The company is signing deals with other companies to strengthen its pipeline for the inflammation market. Gilead’s collaboration with Novo Nordisk for NASH treatments is a step in the right direction, given its recent debacles.

The company suffered a setback with the failure of a late-stage study on selonsertib in patients with compensated cirrhosis due to NASH. Additionally, the HIV franchise is expected to face stiff competition.

 (You can read the full research report on Gilead here >>>)

Other noteworthy reports we are featuring today include Bank of America (BAC), Altria Group (MO) and Caterpillar (CAT).

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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

Cisco (CSCO) Rides on Security Products & CloudCherry Buyout

SAP Rides on Cloud Initiatives & Growth in S/4HANA Platform

Solid HIV Franchise Fuel Gilead (GILD) Amid Weak HCV Segment

Featured Reports

New Branches, Digital Focus Aid BofA (BAC) amid Lower Rates

Per the Zacks analyst, BofA's branch expansion efforts, loan growth and focus on digital offerings will support revenues.

Strong Pricing Aids Altria (MO), Low Cigarette Volumes a Woe

Per the Zacks analyst, Altria has been gaining from higher pricing, which also drove top-line performance during second-quarter 2019.

Rising Demand Aids Raytheon (RTN), High Material Costs Hurt

Per the Zacks Analyst, Raytheon enjoys solid order inflows from overseas courtesy of its combat-proven defense products.

Uber (UBER) Rides on Ride-Sharing Revenues Amid High Costs

The Zacks analyst is impressed with Uber Technologies' solid ride-sharing revenues.

General Motors (GM) to Ride on High SUV Demand Amid Tariffs

Healthy demand for trucks, SUVs & crossovers is boosting General Motors' sales. However, the Zacks analyst is concerned over the U.S.-Sino trade tiff as GM commands a sizable market share in China.

AIG Rides on Revenue Growth, Cost Control Measures

Per the Zacks analyst, business streamlining by selling low returning business and focusing on high growth businesses are driving revenues; cost control measures are aiding underwriting margins.

Las Vegas Sands (LVS) Banks on Macao Business to Drive Growth

The Zacks analyst believes that Las Vegas Sands' planned investment in new capital projects in Macao and higher revenues from The Parisian Macao are also likely to drive growth.

New Upgrades

Sony (SNE) Focuses on Premium Branded Segment to Stoke Growth

Per the Zacks analyst, Sony is focusing on the premium segment of branded products to stoke growth, while fortifying business through accretive buyouts and joint ventures to extend its market share.

Running & Golf Wearable Portfolio Strength Aid Garmin (GRMN)

Per the Zacks analyst, Garmin is benefiting from expanding portfolio of running and golf wearables which is aiding the performance of its Fitness and Outdoor segments.

Ciena (CIEN) Rides on Technology Leadership, Global Strength

Per the Zacks analyst, Ciena is poised to benefit from its technology leadership and diversified customer base in high-growth markets alongside favorable industry dynamics and competitive advantage.

New Downgrades

Weak Manufacturing Sector & High Costs Ail Caterpillar (CAT)

The Zacks analyst is worried that Caterpillar's results will bear the brunt of the recent slowdown in the manufacturing sector, a muted China market and higher input costs due to tariffs.

Margin Contraction Continues to Mar Abiomed's (ABMD) Growth

Per the Zacks analyst, rise in research and development costs along with increasing pricing pressure will continue to restrict Abiomed's margin expansion.

Allison (ALSN) to be Hurt by Weak Off-Highway End Market

Declining demand for hydraulic fracturing applications in the North America Off-Highway end market is likely to weigh on Allison Transmission Holdings' bottom line, per the Zacks analyst.

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SAP SE (SAP) : Free Stock Analysis Report
Altria Group, Inc. (MO) : Free Stock Analysis Report
Gilead Sciences, Inc. (GILD) : Free Stock Analysis Report
Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
Caterpillar Inc. (CAT) : Free Stock Analysis Report
Bank of America Corporation (BAC) : Free Stock Analysis Report
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