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Top Analyst Reports for Apple, Cisco & Oracle

Mark Vickery

Tuesday, December 17, 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 Apple (AAPL), Cisco Systems (CSCO) and Oracle (ORCL). 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’s shares have outperformed the S&P 500 year to date (+77.4% vs. +26%). The Zacks analyst believes that Apple is benefiting from continued momentum in the Services segment and improved iPhone sales, owing to the trade-in programs.

Non-iPhone devices continue to perform well, driven by strong demand for iPad, Apple Watch and AirPods. The company’s expanded portfolio that now includes new MacBook Pro, Apple Watch Series 5 and streaming service Apple TV+ is a key catalyst. Moreover, iPhone sales are expected to improve in China with the new iPhone models.

Nevertheless, uncertainties over the timeframe of the resolution of the U.S.-China trade war do not bode well for the company. Further, antitrust investigations, App Store-related lawsuits and Spotify’s complaint increase legal woes.

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

Shares of Cisco have lost -6.8% in the past three months against the Zacks Computer Networking industry’s fall of -6.6%. 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, strengthening collaboration portfolio, which includes Webex Teams, bodes well. Additionally, acquisitions of Voicea and CloudCherry hold promise.

Cisco’s latest Silicon One strategy to enhance its network hardware business is expected to boost reveune base. 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 >>>)

Oracle's shares have gained 2% over the past six months against the Zacks Computer Software industry's rise of 10.6%. The Zacks analyst believes that Oracle is benefiting from strong adoption of cloud-based solutions, comprising NetSuite ERP, Fusion ERP and Fusion HCM among others.

In fact, momentum witnessed in cloud services were a key upside to the company’s performance in the second quarter of fiscal 2020. Going ahead, the company is expected to reap benefits from rising adoption of SaaS.

Moreover, strong demand for the latest autonomous database supported by ML is likely to drive the top line. It will also provide a competitive edge against Amazon Web Services (AWS) in the Database-as-a-Service market.

However, stiff competition in the cloud market from dominant players is anticipated to put pressure on profitability. Further, lower hardware volumes are expected to hurt the top line. Additionally, integration risks from buyouts remain a concern.

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

Other noteworthy reports we are featuring today include HSBC Holdings (HSBC), Adobe (ADBE) and Amgen (AMGN).

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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

Expanding Portfolio, Services Strength to Aid Apple (AAPL)

Cisco (CSCO) Gains from Security Products & Strategic Deals

Oracle (ORCL) to Keep Gaining from Solid Cloud Suite Adoption

Featured Reports

Focus On Digitization to Aid HSBC (HSBC), Revenues a Concern

Per the Zacks analyst, HSBC's focus on digitization and expand market share in China and the U.K. will aid financials.

Adobe (ADBE) Rides on Creative Strength; Expenses A Concern

The Zacks analyst believes that Adobe's creative cloud business contributes significant revenues and generates high margins.

Amgen (AMGN) Otezla Buyout to Boost Inflammation Portfolio

Amgen's acquisition of Otezla from Celgene is expected to significantly strengthen its inflammation portfolio, per the Zacks analyst.

PetroChina's Upstream Unit Buoyed by Lower Lifting Costs

The Zacks analyst believes higher production & lower lifting costs will aid PetroChina's upstream unit but is worried over drop in its downstream earnings due to domestic refined products oversupply.

ADP Rides on Strategic Buyouts Amid Technological Challenges

The Zacks analyst believes that acquisitions help ADP strengthen its position in the HCM market.

Solid Online Business to Fuel Estee Lauder's (EL) Top Line

Per the Zacks analyst, Estee Lauder sales are set to gain from efforts to boost online sales, which saw double-digit growth across all types of distribution channels in first-quarter fiscal 2020.

Biogen (BIIB) Diversifies Beyond MS, Competition Lurks

The Zacks analyst likes Biogen's strong portfolio of multiple sclerosis (MS) drugs and efforts to foray into other areas. However, MS is a competitive space. Spinraza may soon face competition.

New Upgrades

Acquisitions, Trading Focus to Aid Schwab (SCHW) Revenues

Per the Zacks analyst, Schwab's planned buyouts of TD Ameritrade and USAA's Investment Management Company will help diversify revenues. This along with focus on trading revenues bodes well for growth.

Focus on Renewables, Growing Partnerships Aids AES Corp (AES)

Per the Zacks Analyst, AES Corp.'s focus on renewables should boost growth led by rapid expansion of renewable overseas footprint. Its growing partnerships should act as growth catalysts.

Ubiquiti (UI) Rides on Operational Efficiency, Product Line

Per the Zacks analyst, Ubiquiti's global business model helps it maximize growth while Enterprise Technology product sale continues to rise on the back of strong demand for the UniFi product family.

New Downgrades

Higher Spending Amid Stiff Competition Hurts Take Two (TTWO)

Per the Zacks analyst, intense competition from the likes of EA and Activision is compelling Take Two to spend more on game development and advertising thereby keeping margins under pressure.

Dependence Upon Small Group of Suppliers Hurt UGI Corp (UGI)

Per the Zacks analyst, UGI Corp purchases its required propane from a concentrated number of suppliers. Any disruption in the supply will affect business and profitability.

Selective Insurance (SIGI) Hurt by Cat Loss, High Cost

Per the Zacks analyst, the company is exposed to catastrophes loss, which results in volatility in its earnings. Also, rising expenses due to higher losses weigh on margin expansion.

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Oracle Corporation (ORCL) : Free Stock Analysis Report
HSBC Holdings plc (HSBC) : Free Stock Analysis Report
Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
Amgen Inc. (AMGN) : Free Stock Analysis Report
Adobe Systems Incorporated (ADBE) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
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