Thursday, July 09, 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 Apple (AAPL), Microsoft (MSFT) and TMobile US (TMUS). 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 shares have outperformed the S&P 500 over the past year (+87.7% vs. +6.4%) on the back of continued momentum in the Services segment, driven by strong App Store sales and the robust adoption of Apple Music and Apple Pay.
Non-iPhone devices, particularly Apple Watch and AirPod, are other notable drivers in the long haul. However, iPhone sales are expected to remain bleak in the near term due to the negative impact of the coronavirus. In fact, the company expects iPhone and Wearables business revenues for the fiscal second quarter to be worse on a year-over-year basis than the fiscal first quarter.
On the contrary, iPad and Mac revenues are expected to improve but lower economic activity will hurt AppleCare and advertising businesses. The company didn’t provide any guidance due to the pandemic-triggered uncertainty.
(You can read the full research report on Apple here >>>)
Shares of Microsoft have gained +32% over the past six months against the S&P 500’s fall of -2.6%. The Zacks analyst believes that Microsoft is benefiting from momentum in Azure, impressive Teams user growth led by coronavirus-induced work-from-home wave, uptick in Surface devices and significant demand for Windows 10 PCs.
Moreover, the company is gaining from growing user base of its different applications including Office 365 commercial, and Dynamics. Azure’s expanding customer base remains a key catalyst. Furthermore, it is well poised to expand the total addressable market through acquisition of GitHub.
However, broader macroeconomic weakness and lower spend on advertising owing to the coronavirus outbreak are likely to weigh on LinkedIn and Search revenues. Delays in consulting business contract renewals and supply chain constraints in China are also anticipated to limit growth.
(You can read the full research report on Microsoft here >>>)
TMobile’s shares have gained +24.1% over the past three months against the Zacks National Wireless industry’s rise of +7.3%. The Zacks analyst believes that the company will provide 5G to 99% of the U.S. population. Also, it will likely provide average 5G speeds above 100 Mbps to 90% of the population. T-Mobile’s business plan is built on covering 90% of rural America with average 5G speeds of 50 Mbps, up to two times faster than broadband.
T-Mobile continues to deploy 5G with a mid-band 2.5 GHz spectrum from Sprint. 2.5 GHz 5G is currently live in parts of Chicago, Los Angeles, New York and Philadelphia. The wireless carrier offers 5G coverage in all 50 states and Puerto Rico. Its 5G network is 1.5 times faster than its LTE speeds.
Customers get 5G services in almost 6,000 cities and towns, covering more than 225 million people. T-Mobile divested Sprint’s prepaid wireless business to DISH. However, it operates in a fiercely competitive and almost saturated U.S. telecom market.
(You can read the full research report on TMobile here >>>)
Other noteworthy reports we are featuring today include Thermo Fisher Scientific (TMO), Goldman Sachs (GS) and Cigna (CI).
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>
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
Apple (AAPL) Banks on Services to Counter Weak iPhone Demand
Adoption of Azure & Office 365 Strength Aid Microsoft (MSFT)
T-Mobile (TMUS) Gains from Sprint Acquisition & 5G Network
Thermo Fisher's (TMO) Rising Product Uptake Drives Growth
The Zacks analyst is upbeat about Thermo Fisher's COVID-19 diagnostic test, which is seeing rapid uptake and boosting its diagnostic testing arm.
Goldman (GS) Exhibits Cost Control; Legal Issues Linger
Per the Zacks analyst, Goldman depicts cost control efforts to drive operational efficiency. Also, business diversification remains a key strength.
Cigna (CI) Benefits from Improving Top Line, Costs High
Per the Zacks analyst, strategic buyouts have enhanced the company's capabilities, which in turn have led to top-line growth.
Eats Business Aids Uber (UBER) Amid Weakness in Rides
The Zacks analyst is impressed by the continued surge in Eats business as coronavirus concerns limit people to their homes. However, significant downturn in Uber's rides business is concerning.
Robust Sensor Unit Drives DexCom (DXCM), Higher Costs a Woe
Per the Zacks analyst, DexCom has been gaining consistently from the Sensor and Transmitter segments. However, increase in operating expenses continues to raise concern.
Improving Premiums Aid Travelers (TRV), Cat Loss Ails
Per the Zacks analyst, Travelers is set to gain from high retention rate, pricing gains, positive renewal rate changes and strong market presence.
Operating Efficiency to Aid Lennar (LEN), Higher Costs Ail
Per the Zacks analyst, Lennar is poised to benefit from dynamic pricing model and operating efficiency. However, rising land and labor costs are concerns.
Horizon Pharma (HZNP) Boasts of a Strong Product Portfolio
Per the Zacks analyst, Horizon Pharma has a strong product portfolio and the performance of the orphan and rheumatology business units appear encouraging.
U.S. Dialysis Services Aid DaVita (DVA) Amidst Competition
DaVita has been gaining from strength in dialysis activities in the United States. The Zacks Analyst is however apprehensive of the cutthroat competition in the U.S. dialysis space.
AGCO Corp (AGCO) Rides on Investments & Cost Control Actions
The Zacks analyst expects AGCO to gain from cost-reduction initiatives, growing U.S farm income and strategic investments to expand product lines and improving factory productivity.
Rising Expenses, Growing Reserves for Losses Ail Square (SQ)
Per the Zacks analyst, Square is hurt by growing Cash Card issuance expenses and reserves for transaction and loan losses owing to the expected future impact from coronavirus pandemic on losses.
Soft Leasing Activity, Rent Payments to Hurt AvalonBay (AVB)
Per the Zacks Analyst, AvalonBay's revenue growth will likely be hurt due to soft leasing activity, pressure on rental rates and occupancy, and a challenging rent collection environment.
International Exposure & Old Facilities Ail NRG Energy (NRG)
Per the Zacks analyst, NRG Energy's international operations expose it to political and economic risks and its some old facilities create a competitive disadvantage against its peers.
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
TMobile US, Inc. (TMUS) : Free Stock Analysis Report
Thermo Fisher Scientific Inc. (TMO) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report
Cigna Corporation (CI) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research