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Top Analyst Reports for Facebook, Tesla & Lockheed Martin

Sheraz Mian
·7 min read

Tuesday, October 6, 2020

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 Facebook (FB), Tesla (TSLA) and Lockheed Martin (LMT). 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 >>>

Facebook shares have lost some ground over the past month or so, but the stock has nevertheless been a strong performer this year (up +28.1% in the year-to-date period vs. +5.8% gain for the S&P 500 index). The Zacks analyst expects the stock's outperformance to continue on the back of steady user growth across all regions, particularly Asia Pacific.

The coronavirus-led lockdowns and shelter-at-place guidelines have increased engagement of its products like Instagram, WhatsApp, Messenger and Facebook Watch. However, Facebook expects user-base growth to be flat or slightly down in most of its regions in the third quarter of 2020, sequentially. The company expects ad-revenue growth on a year-over-year basis to be roughly 10%.

Facebook assumes some of the recent surge in community engagement to normalize as regions reopens. Further, a number of companies have announced plans to freeze ad spending on Facebook due to its failure to eradicate hate speech and misinformation. This is expected to hurt top-line growth, at least in the near term.

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

Shares of Tesla have gained +783.9% over the past year against the Zacks Domestic Automotive industry’s rise of +197%. The Zacks analyst believes that Tesla has a first-mover advantage in the EV space with high range vehicles, superior technology, and software edge.

Robust Model 3 demand, ramp up of Model Y production, significant Shanghai Gigafactory progress, amazing line-up of upcoming products and aggressive expansion efforts bode well for the firm. The red hot EV maker smashed forecasts and posted the fourth consecutive quarterly profit in the last quarter.

However, high R&D, SG&A costs and massive capex may clip the margins. Tesla is investing heavily to increase production capacity, boost sales and construct Gigafactories, which are likely to strain its near-term prospects. Waning margins for Model S/X is another concern. Thus, investors are recommended to wait for a better entry point.

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

Lockheed Martin shares have gained +8.3% over the past six months against the Zacks Aerospace Defense industry’s rise of +6.5%. The Zacks analyst believes that expansionary budgetary provisions made by the U.S. administration will immensely boost this defense primes business. It continues to be a strong cash generator.

Lockheed Martin enjoys strong demand for its high-end military equipment in domestic and international markets, being the world's largest defense contractor. Lockheed Martin is further witnessing increased demand for its THAAD missiles from the Kingdom of Saudi Arabia (KSA). In a three months time, Lockheed Martin outperformed the industry.

However, forced cost reduction initiatives for F-35 program might hamper its operating results. America and Turkey's tiff about the latter accepting Russian products may hurt Lockheed's component supply from Turkey. It is facing performance issues in relation to some of its products, which in turn may hurt it results.

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

Other noteworthy reports we are featuring today include Alphabet (GOOGL), Starbucks (SBUX) and American Express (AXP).

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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

Instagram Strength Aids Facebook (FB) Amid Advertiser Exodus

Rising Demand for Model 3 Drives Tesla (TSLA) Amid Cost Woes

Robust Demand Aids Lockheed (LMT), F-35 program's Cost Hurts

Featured Reports

Alphabet (GOOGL) Rides on Diversification; Risks Remain

The Zacks analyst believes that Alphabet's improving search & YouTube revenue, focus on cloud, hardware, and AI will continue to deliver growth.

Digitalization Aids Starbucks (SBUX), Traffic Woes Linger

Per the Zacks analyst, enhanced customer experience and digitalization bode well for Starbucks. However, dismal store traffic owing to the coronavirus pandemic remains a concern.

Decline in Expenses to Aid American Express' (AXP) Margins

Per the Zacks analyst, the decline in marketing, cost of card member services and card member rewards are likely to aid margins.

Colgate's (CL) Innovative Product-Lines to Boost Top Line

Per the Zacks analyst, Colgate's innovation efforts including the re-launch of Colgate Total and Hill's Science Diet are likely to aid sales.

Express Scripts Acquisition, Revenue Growth Aid Cigna (CI)

Per the Zacks analyst, the buyout of Express Scripts has diversified Cigna's operations, opening up new revenue streams.

Growth Investments Supports ABB Despite Soft Market Demand

Per the Zacks analyst, ABB's organic growth investments along with diligent cost-cutting actions will boost its competency.

Revenue Growth Supports U.S. Bancorp (USB), High Costs A Woe

Per the Zacks analyst, organic growth backed by rising in average loans and deposits remain a key strength at U.S. Bancorp.

New Upgrades

Square (SQ) Banks on Solid Cash App Adoption, Bitcoin Growth

Per the Zacks analyst, Square is benefiting from strong Cash App engagement and its growing active customer base. Further, growing bitcoin revenues owing to the robust Cash App are contributing well.

BorgWarner (BWA) to Be Buoyed By Delphi Buyout

The Delphi buyout, which will further strengthen BorgWarner's propulsion leadership and result in significant cost synergies, has made the Zacks analyst turn bullish on the company.

Gulfport (GPOR) to Gain from Increase in Natural Gas Prices

The Zacks analyst believes that an increase in natural gas prices resulting from higher demand in the winter will enable Gulfport to deliver strong revenues and cash flows.

New Downgrades

Cat Loss, Rising Expenses Hurt Cincinnati Financial (CINF)

Per the Zacks analysts, Cincinnati Financial's exposure to catastrophe induces volatility in its underwriting profitability while increasing expenses weighing on margin expansion are concerns.

High Operating Risks, Stiff Competition Hurt Cogent (CCOI)

Per the Zacks analyst, intense competition from major service providers and higher operating risks owing to its dependency on a single network vendor is likely to hurt Cogent's near-term performance.

Apellis (APLS) Faces Strong Competition for Pegcetacoplan

Per the Zacks analyst, with no approved drug in its portfolio, any delay in the approval of lead pipeline candidate - pegcetacoplan will be a setback for Apellis.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
Starbucks Corporation (SBUX) : Free Stock Analysis Report
Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Facebook, Inc. (FB) : Free Stock Analysis Report
American Express Company (AXP) : Free Stock Analysis Report
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