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Q1 Scorecard and Research Reports for NVIDIA, Coca-Cola, PetroChina & Others

Sheraz Mian

Monday, May 18, 2020

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily provides a real-time update on the Q1 earnings season, in addition to featuring new research reports on 16 major stocks, including NVIDIA (NVDA), Coca-Cola (KO) and PetroChina (PTR). 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 >>>

Q1 Earnings Season Scorecard

For the 453 S&P 500 members that have reported Q1 results already, earnings are down -11.1% on +1.2% higher revenues, with 67.1% beating EPS estimates and 57.4% beating revenue estimates.

The pademic-related shelter-in-place policies took effect only in the last few weeks of the quarter, but the current period (2020 Q2) is expected to experience the brunt of Covid-related disruptions.

As a result, estimates for Q2 and the remainder of the year have been steadily coming down lately, though the pace of cuts has eased to some extent in recent days as the bulk of the Q1 reporting cycle has come to an end.

S&P 500 earnings are now expected to be down -42.3% in Q2, -23.8% in Q3 and -12.9% in 2020 Q4.

Today's Featgured Reports

NVIDIA’s shares have outperformed the Zacks General Semiconductor industry over the past year (+132.2% vs. +49.5%), with the stock benefiting from strong growth in GeForce desktop and notebook GPUs, which is boosting gaming revenues.

Moreover, an increase in Hyperscale demand remains a tailwind for the Data Center business. Further, the solid uptake of AI-based smart cockpit infotainment solutions is a boon. Additionally, strength across desktop workstation products is aiding Professional Visualization revenues.

However, in the near term, management expects a $100-million negative impact of the coronavirus menace on revenues. Moreover, the U.S.-China trade war remains a key concern. Also, lower demand for notebook workstations might be a near-term hindrance.

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

Shares of Coca-Cola have lost -15.1% over the past six months against the Zacks Soft Drinks Beverages industry’s fall of -12.6%. This modest underperformance notwithstadning, the Zacks analyst believes that innovation and investments in core categories and brands should remain key focus areas for the company, which should lead to the expansion of retail value share. It is gaining from the effective execution of strategies to evolve as a consumer-centric total beverage company.

The company continued with its earnings beat streak for the second straight quarter in first-quarter 2020. Despite a beat, its top line declined in the first quarter as gains from a strong start to 2020 were offset by disruptions in the latter half of the quarter due to the coronavirus pandemic.

It witnessed a decline in unit case volume, while price/mix and concentrate sales remained flat. The company expects the pandemic to significantly hurt second-quarter results. Also, adverse currency impacts are likely to persist.

(You can read the full research report on Coca-Cola here >>>)

PetroChina’s shares have lost -19.2% over the past three months against the Zacks International Integrated Oil industry’s fall of -33.8%. The Zacks analyst believes that limited international operations and losses on gas imports give investors more reason to be cautious on the stock.

With higher production and lower lifting costs supporting the state-run giant's upstream unit, the stock might gain further. PetroChina's E&P segment posted 6.1% increase in production in the first 3 months of 2020, while oil and gas lifting costs fell 8.9% from what it averaged in the March quarter of last year.

However, the historic oil price crash has hit PetroChina hard. Further, in a sign of weakness in the company’s downstream business, earnings plunged due to depressed domestic product demand, lower refined products sales and drop in price.  

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

Other noteworthy reports we are featuring today include QUALCOMM (QCOM), CVS Health (CVS) and Zoom Video Communications (ZM).

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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

Strong GPU Adoption in Gaming, Datacenter Aids NVIDIA (NVDA)

Coca-Cola (KO) Boosts Digital Investments Amid Coronavirus

Upstream Unit Buoys PetroChina (PTR) Amid Gas Import Losses

Featured Reports

Qualcomm (QCOM) Rides on 5G Chip for Super-Fast Connectivity

Per the Zacks analyst, Qualcomm remains focused to deliver a seamless transition to super-fast 5G network, offering low-power resilient multi-gigabit connectivity with best-in-class security.

CVS Health's (CVS) PBM & Retail Gain from COVID-19 Measures

The Zacks analyst is optimistic about CVS Health's PBM and Retail arms which are growing sturdy amid the coronavirus pandemic.

Work-From-Home & Online Learning Wave Aids Zoom Video (ZM)

Per the Zacks analyst, Zoom Video is benefiting from the coronavirus-induced remote working and Internet-based education wave.

Strategic Acquisitions Aid Schwab (SCHW) Amid Lower Rates

Per the Zacks analyst, Schwab's inorganic growth initiatives and other revenue diversification efforts will aid profits.

Steady Investments to Aid Xcel Energy (XEL) Overall Growth

Per the Zacks analyst, Xcel Energy's systematic investments in infrastructure projects and focus on renewable expansion will add to company's overall strength.

Gold Prices, Liquidity Aid Franco-Nevada, Low Oil Prices Ail

Per the Zacks analyst, a debt-free balance sheet, the ongoing rally in gold prices and cost management efforts will drive Franco-Nevada despite the impact of low oil prices on its energy assets.

AIG Gains on Growing Revenues and Cost Control Measures

Per the Zacks Analyst, while business streamlining is driving revenues, cost control measures are aiding underwriting margins.

New Upgrades

Strong Image Sensor Design Wins Aid ON Semiconductor (ON)

Per the Zacks analyst, robust image sensor design wins for autonomous driving applications and advanced driver-assistance systems (ADAS) will drive ON Semiconductor's top line.

Delphi (DLPH) to Gain From Fundamental Transformation Plan

Per the Zacks Analyst, Delphi's fundamental transformation plan will help the company reduce its overall cost structure and improve the operating margin, free cash flow and return on capital invested.

Signet's (SIG) 'Path to Brilliance' Plan to Drive Results

Per Zacks analysts, Signet's 'Path to Brilliance' Plan, which focuses on customer-centric growth actions, enhancing omni-channel capabilities and driving cost effectiveness, has been driving results.

New Downgrades

Coronavirus-led Low Vehicle Demand to Weigh on Toyota (TM)

Per the Zacks analyst, Toyota will suffer a major blow from weak vehicle demand and falling consumer sentiment amid coronavirus. Notably, operating profit is expected to fall 80% y-o-y in fiscal 2021.

Sanofi (SNY) Specialty Care & Vaccines Unit Support Sales

The Zacks analyst says that Sanofi's Specialty Care unit is on a strong footing with regular label expansion of Dupixent. The Vaccines franchise has also improved.

Investments to Boost FirstEnergy's (FE) Operational Strength

Per the Zacks analyst, FirstEnergy's modernization drive along with long-term investments will boost its service reliability and lead to customer retention.

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Zoom Video Communications, Inc. (ZM) : Free Stock Analysis Report
QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
PetroChina Company Limited (PTR) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
CocaCola Company The (KO) : Free Stock Analysis Report
CVS Health Corporation (CVS) : Free Stock Analysis Report
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