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Top Analyst Reports for Intel, Coca-Cola & Starbucks

Sheraz Mian

Thursday, September 3, 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 Intel (INTC), Coca-Cola (KO) and Starbucks (SBUX). 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 >>>

Intel shares have underperformed the Zacks General Semiconductor industry in the year to date period (-14% vs. +36.7%), reflecting the market's disappointment with the company's recent operating performance. The Zacks analyst believes that Intel is benefiting from strength across both PC-centric and Data-centric domains.

Robust mix of high-performance second-generation Xeon Scalable processors and solid demand from Cloud service providers are expected to boost growth. Strong momentum for 10 nanometer (nm) mobile CPU bodes well. Notably, the company provided encouraging 2020 guidance.

Further, solid uptake of 5G networking solutions, higher Wi-Fi and modem sales and solid notebook demand, improvement in NAND pricing trends led higher ASPs, and Optane bit growth, remain tailwinds. However, anticipated decline in PC total addressable market, and production delays pertaining to 7 nm ramp up remain concerns.

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

Shares of Coca-Cola have lost -13.8% over the past six months against the Zacks Soft Drinks Beverages industry’s fall of -6.4%. The Zacks analyst believes that driven by a shift in consumer behavior due to the coronavirus pandemic, Coca-Cola has been witnessing a surge in e-commerce with the growth rate of the channel doubling in many countries.

Coca-Cola boasts of a robust earnings surprise trend that continued in second-quarter 2020. This marked the third straight quarter of earnings beat. Gains from aggressive cost management and timing of expenses aided the bottom line. It is poised to gain from the streamlining of portfolio by exiting of Zombie brands that will help divert resources toward brands with more growth potential.

The company’s top line missed estimate on declines in away-from-home channels, which account for nearly half of its revenues. It also lost global value share in NARTD beverages driven by negative channel mix owing to softness in the away-from-home channel.

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

Starbucks shares have lost -10.1% over the past year against the Zacks Food & Restaurants industry’s fall of -1.4%. The Zacks analyst believes that the company continues to benefit from operating fundamentals such as solid global footprint, successful innovations and digital offerings.

Despite the coronavirus, the company is on track to open minimum 500 net new stores this fiscal year. It has also strengthened its relationship with Alibaba. Earnings Estimates for 2020 have increased over the past 30 days, depicting optimism regarding the stock growth potential.

However, dismal global retail and comparable sales, along with decline in store traffic due to social distancing protocols, continue to hurt the company. Notably, for fiscal 2020 comps are expected to be down 15% to 20% compared with prior estimate of decline of 10% to 20%. Also, the company’s high debt level remains a concern.

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

Other noteworthy reports we are featuring today include Intuitive Surgical (ISRG), Caterpillar (CAT) and Zoetis (ZTS).

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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

Intel (INTC) Banks on Portfolio Strength Amid 7 nm Delay

Coca-Cola (KO) to Streamline Portfolio for Enhanced Recovery

Starbucks (SBUX) Banks on Unit Expansion, Dismal Comps Hurt

Featured Reports

da Vinci System Aids Intuitive (ISRG) Amid Stiff Competition

Strong prospect in Intutive Surgical's robotic platform - da Vinci System - is a positive. However, the Zacks analyst is apprehensive about cutthroat competition in the MedTech space.

Cost Control Efforts Buoy Caterpillar (CAT) Amid Weak Demand

Per the Zacks analyst, Caterpillar's focus on cutting down costs will help sustain margins despite the weak demand owing to the impact of the coronavirus pandemic.

Zoetis' (ZTS) Wide Portfolio Drives Growth Amidst Competition

Per the Zacks analyst, Zoetis' diversified product portfolio, global footprint and productive R&D helps drive both top-and bottom-line growth.

Applied Materials (AMAT) Rides on Logic Spending, Risk Remain

Per the Zacks analyst, strong demand and solid customer spending in foundry and logic required in IoT and other applications remain growth drivers.

Growing Top line, Solid Cash Flows Aid Global Payments (GPN)

Per the Zacks analyst, Global Payments benefits from healthy revenue stream emanating from buyouts and alliances.

Wide Market Reach, New Product Development, Aid Eaton (ETN)

Per the Zacks analyst Eaton's operations in 175 countries across the world and development of new products will continue to drive demand and boost profitability.

Enterprise (EPD) Banks on $6.9B Major Midstream Projects

Enterprise will generate additional fee-based revenues from its $6.9 billion worth of under-construction key midstream projects. However, significant debt exposure concerns the Zacks analyst.

New Upgrades

Expeditors (EXPD) Strong on Liquidity & Airfreight Revenues

The Zacks analyst is impressed with the uptick in airfreight revenues (up 47.2% in first-half 2020). Its strong liquidity position is an added positive.

H&R Block (HRB) to Gain From Digital Enablement of Business

The Zacks analyst believes that major drivers of H&R Block's performance are digital enablement of business, greater usage of AI and machine learning, and expansion in small business.

Strong Demand in Infrastructure Segment to Aid Lindsay (LNN)

Per the Zacks analyst, Lindsay will gain from the momentum in infrastructure segment driven by demand for Road Zipper projects, transportation safety products and its Foundation for Growth initiative.

New Downgrades

Rising Credit Loss Reserve & Competition Hurt PayPal (PYPL)

Per the Zacks analyst, increasing credit loss reserve owing to macroeconomic projections on account of coronavirus is a risk for PayPal. Also, rising digital payment competition remains a concern.

Weak Electronics Products & Solutions Segment Hurt Sony (SNE)

Per the Zacks Analyst, waning sales in the Electronics Products & Solutions (EP&S) segment due to a decline in unit sales of digital cameras and televisions impair Sony's growth prospects.

Weak Demand, Higher Costs to Dent WestRock's (WRK) Results

The Zacks analyst remains concerned that WestRock's results will bear the brunt of higher recycled fiber costs and weak demand in some of its markets amid the COVID-19 pandemic.

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
Zoetis Inc. (ZTS) : Free Stock Analysis Report
Starbucks Corporation (SBUX) : Free Stock Analysis Report
CocaCola Company The (KO) : Free Stock Analysis Report
Intuitive Surgical, Inc. (ISRG) : Free Stock Analysis Report
Intel Corporation (INTC) : Free Stock Analysis Report
Caterpillar Inc. (CAT) : Free Stock Analysis Report
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