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Top Research Reports for Alphabet, Facebook & Nike

Mark Vickery
Top Research Reports for Alphabet, Facebook & Nike

Monday, July 8, 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 Alphabet (GOOGL), Facebook (FB) and Nike (NKE). 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 >>>

Alphabet’s shares have lost -2.9% in the past one year, outperforming the Zacks Internet Services industry's decline of -22.7%. The Zacks analyst thinks Alphabet’s strong initiatives toward elimination of bad ads and introducing useful major search updates are tailwinds.

Further, Google’s robust mobile search is also a positive. Its strong focus toward bolstering presence in the cloud market on the back of expanding data centers and robust cloud offerings continues to aid growth. Further, Google’s strong focus on innovation of its AI techniques and home automation space is aiding its business growth.

However, the company’s growing litigation issues and increased spending on YouTube and consumer gadgets might hurt profitability. Also, increasing competition in the advertising business and currency fluctuations are concerns.

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

Shares of Facebook have gained +49.8% year to date, outperforming the S&P 500’s increase of +17.7% during the same period. The Zacks analyst thinks Facebook is benefiting from solid mobile ad revenues, driven by impressive growth in Instagram Stories and Feed, and Facebook News Feed. Interactive Stories ads on Instagram are likely to lead to better interaction among people, businesses and advertisers.

Moreover, the upcoming cryptocurrency, Libra, is expected to expand the company’s footprint into the lucrative online payments space. Meanwhile, estimates have been stable ahead of the company’s second-quarter earnings release.

The company has mixed record of earnings surprises in recent quarters. However, a persistent mix shift toward Stories is anticipated to hurt ARPU. Rising regulatory headwinds are also a concern.

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

Nike’s shares have outperformed the Zacks Shoes and Retail Apparel industry in the past year, gaining +12.4% vs. +9.8%. The Zacks analyst thinks the outperformance is attributable to a robust sales trend stemming from the execution of Consumer Direct Offense as well as strength in Wholesale and Nike Direct businesses.

Fourth-quarter fiscal 2019 marked the ninth straight quarter of top-line beat for the company. Further, it expects strong sales results for fiscal 2020, driven by brand recognition, robust innovation pipeline, and a positive response from Nike Direct and wholesale partners. However, Nike’s earnings missed estimates in the fiscal fourth quarter, marking a negative surprise after 28 straight beats.

For fiscal 2020, it anticipates headwinds from higher SG&A expenses, tax rate and adverse currency to mar results. Further, the company expects gross margin gains to be partly offset by supply-chain investments and expansion of Air manufacturing innovation.

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

Other noteworthy reports we are featuring today include United Airlines (UAL), Total System (TSS) and Edison International (EIX).

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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

Alphabet (GOOGL) Rides on Diversification, Legal Troubles Ail

Expanding User Base, Instagram Strength Aid Facebook (FB)

Digital Transformation Efforts to Boost NIKE (NKE) Top Line

Featured Reports

Expansion Plans Aids Edison International (EIX), Costs Hurt

Per the Zacks analyst, focus on infrastructural development programs will boost top line going ahead. However, inability to recover uninsured wildfire-related costs may affect its financial condition.

Arista (ANET) Rides on Scalable Demand to Deter Margin Woes

Per the Zacks analyst, despite litigation issues and competitive pressures, Arista is likely to benefit from the expanding cloud networking market led by strong demand for scalable infrastructure.

Cost Savings Strategy Aids Deutsche Bank (DB) Amid Low Rates

Per Zacks analyst, Deutsche Bank's cost-savings efforts to drive efficiency are encouraging and might neutralize impact of high legal costs, going forward. Yet, low domestic rate environment is a woe.

Pinnacle Foods Buyout Likely to Keep Aiding Conagra (CAG)

Per the Zacks analyst, Conagra is expected to keep gaining from the acquisition of Pinnacle Foods. During the fourth quarter, the company's top line advanced 32.9% mainly due to this buyout.

Acquisitions, Strong Balance Sheet Aid Total System (TSS)

Per the Zacks analyst, buyouts of NetSpend, TransFirst, Cayan, iMobile and others have aided inorganic growth.

Viper (VNOM) Gains From Permian Acreages, Bottlenecks Hurt

The Zacks analyst expects Viper Energy to gain from steady royalty income from the mineral interests in the prolific Permian Basin.

KB Home (KBH) Rides on Return Focused Strategy, Lower ASP Ails

Per the Zacks analyst, KB Home is likely to be benefited by its Returns-Focused Growth plan and Built-to-Order approach.

New Upgrades

Unit Revenue Growth, Buybacks Buoy United Airlines (UAL)

The Zacks analyst likes the company's performance with respect to unit revenues. Strong demand for air travel is aiding the top line. Efforts to reward shareholders also raise optimism in the stock.

Under Armour's (UAA) DTC Business to Lift Top Line

Per the Zacks analyst, Under Armour's focus on brand development, direct-to-consumer operations and technology-based fitness business bode well. Such efforts are likely to fuel top-line growth.

Buyouts & Segmental Restructuring to Aid Berry Global (BERY)

Per the Zacks analyst, Berry Global stands to gain from acquired assets, mainly from the recent buyout of RPC Group. Also, segmental restructuring will help in serving customers more efficiently.

New Downgrades

CommScope (COMM) Marred by Weak Connectivity Solutions Unit

Per the Zacks analyst, softer-than-expected performance of Connectivity Solutions segment due to dwindling sales in EMEA and Asia-Pacific continue to take a toll on CommScope's growth trajectory.

Weak Advanced Surgical Unit Hurts Integer Holdings (ITGR)

Integer Holdings is currently being plagued by sluggishness in the Advanced Surgical unit. The Zacks analyst is also apprehensive about the stiff competition in the MedTech space.

Lower Revenue Per Student Hurts Strategic Education (STRA)

Per the Zacks analyst, lower revenue per student due to continued use of scholarships and ongoing mix shift to lower-paying corporate-sponsored students is denting Strategic Education's profitability.

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United Airlines Holdings Inc (UAL) : Free Stock Analysis Report
Total System Services, Inc. (TSS) : Free Stock Analysis Report
NIKE, Inc. (NKE) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Facebook, Inc. (FB) : Free Stock Analysis Report
Edison International (EIX) : Free Stock Analysis Report
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