Top Analyst Reports for Broadcom, Intel & Union Pacific

Thursday, June 2, 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 Broadcom Inc. (AVGO), Intel Corporation (INTC), and Union Pacific Corporation (UNP). 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 >>>

Broadcom shares have outperformed the Zacks Electronics - Semiconductors industry over the past year (+23.6 % vs. +13.8%) on the back of strength in networking and server storage segments. Networking is riding on strong adoption of Broadcom’s next-gen merchant switching and routing solutions by hyperscalers, enterprises and service providers. Aggressive adoption of its next-generation server storage solutions by hyperscalers is expected to drive top-line growth.

Broadcom expects fiscal third-quarter networking and server storage revenues to grow more than 25% and 60% on a year-over-year basis, respectively. An upbeat third-quarter fiscal 2022 guidance is encouraging. Recently announced VMware acquisition will aid prospects over the long term. However, increasing competition, along with high debt levels, are persistent overhangs.

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

Intel Corporation shares have declined -13.0% over the year-to-date period against the Zacks Semiconductor - General industry’s decline of -25.1%. The Zacks analyst believes that the Client Computing Group is expected to suffer due to component shortage. Production delays pertaining to 7 nm ramp up remain a concern. A strained Sino-U.S. trade relationship, imposition of fresh lockdown restrictions in some markets, forex woes and high debt burden remain other concerns.

However, despite short-term headwinds, the company expects demand to pick up in the second half of the year. The company is riding on prospects of the Internet of Things and Mobileye businesses. Mobileye growth should be driven by design wins amid recovering automotive industry. Recovery in the enterprise business of the data center segment is a positive. Intel is developing more integrated solutions that will likely be competitive on a cost per watt basis while offering customized solutions for bigger firms.

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

Union Pacific shares have outperformed the Zacks Transportation - Rail industry over the past year (+0.6 % vs. -4.4%). The company hiked dividend twice in 2021. In May 2022, UNP upped its quarterly dividend by a further 10%. The railroad operator is also active on the buyback front. Management anticipates share repurchases in 2022 to be in line with the 2021 levels of $7.3 billion. %. The Zacks analyst believes that the company's strong free cash flow generating ability supports its shareholder-friendly activities. Uptick in freight revenues (up 17% year over year in first-quarter 2022) as economic activities pick up the pace is an added positive.

However, escalation in fuel costs (up 74% in the March quarter) as oil prices move north induced a 16% rise in the operating expenses. High debt/EBITDA ratio and tepid automotive demand are further concerns. Increased capex may also be bothersome.

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

Other noteworthy reports we are featuring today include BlackRock, Inc. (BLK), Dollar Tree, Inc. (DLTR), and Incyte Corporation (INCY).
 
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 Demand for Networking Products Aids Broadcom (AVGO)

Intel (INTC) Rides on Solid IoT & Mobileye Growth Dynamics

Dividends & Buybacks Aid Union Pacific (UNP), Cost Woes Ail

Featured Reports

Active Equity Focus, Solid Asset Balance Aid BlackRock (BLK)
Per the Zacks analyst, BlackRock's efforts to restructure the active equity business will likely support the top line. Its solid assets under management balance will continue to drive revenue growth.

Lead Drug Jakafi Fuels Incyte (INCY) Amid Pipeline Setbacks
Per the Zacks analyst, the label expansion of Jakafi in additional indications and uptake of new drugs should boost Incyte and offset the slowdown. However, pipeline setbacks remain a concern.

Robust Cash Flow to Boost Magellan (MMP) Amid Debt Burden
The Zacks analyst believes that Magellan Midstream's growing distributable cash flow should help it to hike payouts but is concerned about the huge debt load of around $5.3 billion.

Robust Genomics Sales Aid QIAGEN (QGEN) Amid Rising Costs
The Zacks analyst is encouraged by the impressive sales growth within QIAGEN's Genomics or NGS portfolio. However, mounting operating expenses weigh on the company's bottom line.

Solid Contract Sales Aid Marriott Vacations (VAC), Costs High
Per the Zacks analyst, Marriott Vacations is likely to benefit from solid contract sales, improvement in occupancy rate, and digital initiatives. However, inflationary pressures are a headwind.

R&D Investment Continues to Aid ShockWave Medical (SWAV)
Per the Zacks analyst, ShockWave Medical's investment in research and development (R&D) work aids in advancing the company's Intravascular Lithotripsy technology to boost existing product offerings.

Expanding Customer Base, Steady Investment Aid Spire (SR)
Per the Zacks analyst Spire is gaining from demand from increasing gas utility customer base. Long-term investments will fortify infrastructure enabling it to serve more customer and boost profits.

New Upgrades

Dollar Tree's (DLTR) Real Estate Initiatives Hold Potential
Per the Zacks analyst, Dollar Tree is on track with optimizing its store portfolio through new store openings, renovations, re-banners and closings. Its new H2, Dollar Tree Plus! and Combo Stores hold

Strong Portfolio & Acquisitions to Drive PTC's Performance
Per the Zacks analyst, PTC's performance is being driven by robust demand for products like Creo and Windchill. Strategic acquisitions have played a pivotal part in boosting the company's business.

Sanderson Farms (SAFM) Gains on Foodservice Demand Recovery
Per the Zacks analyst, Sanderson Farms is gaining on foodservice business revival. Its third-quarter results benefited from rise in demand and prices for products sold to foodservice customers.

New Downgrades

Weak Power & Healthcare Segments Hurt General Electric (GE)
Per the Zacks analyst, General Electric is struggling with weakness across its gas power, steam power, healthcare and renewable energy businesses amid supply-chain challenges in the industry.

B&G Foods' (BGS) Gross Margin Hurt by Input Cost Inflation
Per the Zacks analyst, high input costs are hurting B&G Foods' gross margin. During first-quarter fiscal 2022, the company's adjusted gross margin of 19% contracted by 430 basis points.

Virtu Financial (VIRT) Continues to Grapple With Lower Revenues
Per the Zacks analyst, the company's revenues were hurt by decreased volatility and volumes across global markets. Also a decline in market volatility offers it lesser trading and profit opportunities

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Intel Corporation (INTC) : Free Stock Analysis Report
 
BlackRock, Inc. (BLK) : Free Stock Analysis Report
 
Dollar Tree, Inc. (DLTR) : Free Stock Analysis Report
 
Union Pacific Corporation (UNP) : Free Stock Analysis Report
 
Incyte Corporation (INCY) : Free Stock Analysis Report
 
Broadcom Inc. (AVGO) : Free Stock Analysis Report
 
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