Wednesday, July 22, 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 Home Depot (HD), PayPal (PYPL) and Cisco Systems (CSCO). 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 >>>
Home Depot’s shares have underperformed the Zacks Retail Building Products industry over the past year (+24.2% vs. +27.3%). The Zacks analyst believes that Home Depot’s interconnected retail strategy and underlying technology infrastructure have been more relevant amid the coronavirus crisis, delivering record web traffic for weeks without disruption.
In the first quarter of 2020, the company’s top line benefited from strong interconnected presence, which helped adapt to changing customer preference during the pandemic in late March. The company quickly adapted to consumer needs providing contactless curbside pickup and other fulfillment services, adhering to the safety protocols.
This helped boost comps performance across stores. However, the bottom-line results reflected the impacts of higher costs to steer through the environment, particularly enhanced benefits to associates. Moreover, the company suspended its previously outlined guidance for fiscal 2020, citing the unprecedented impacts of the pandemic.
(You can read the full research report on Home Depot here >>>)
Shares of PayPal have gained +50.3% over the past six months against the Zacks Internet Software industry’s rise of +39.5%. The Zacks analyst believes that PayPal’s portfolio strength remains its key catalyst. Venmo’s improving monetization efforts and rising adoption rate across various platforms are aiding the total active accounts.
Further, robust mobile checkout services of One Touch are contributing to the company’s total payment volume growth. Furthermore, growing momentum of PayPal’s core peer to peer and merchant services is aiding in acceleration of payment volume. Additionally, improving trend in the company’s activation rate is a positive.
Also, benefits from Honey buyout are tailwinds. The stock has outperformed the industry on a year-to-date basis. Further, increasing credit loss reserves owing to macroeconomic projections on account of coronavirus is a serious matter of concern.
(You can read the full research report on PayPal here >>>)
Cisco’s shares have gained +12.5% over the past three months against the Zacks Computer Networking industry’s rise of +13%. The Zacks analyst believes that Cisco is well poised to benefit from robust demand for identity and access, advanced threat as well as unified threat management security solutions fuelled by coronavirus crisis-induced high growth in Internet traffic.
Moreover, solid uptake of Webex video conferencing and business productivity offerings on account of COVID-19 induced work-from-home demand environment is noteworthy. Additionally, strong growth in Meraki, and strength across WiFi 6 products and Catalyst 9000 family of switches are positives.
However, weak demand for servers and HyperFlex solutions is a woe. Moreover, sluggishness in the commercial, service provider and enterprise end markets and coronavirus crisis-induced supply chain constraints are likely to put pressure on the top line.
(You can read the full research report on Cisco here >>>)
Other noteworthy reports we are featuring today include Alibaba (BABA) and CME Group (CME).
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Today's Must Read
Home Depot (HD) Gains from Digital Business Amid Pandemic
PayPal (PYPL) Benefits From Increasing Total Payment Volume
Cisco (CSCO) Gains From Security Products & Strategic Deals
Alibaba (BABA) Drives On Cloud Growth; Investments Hurt
Per the Zacks analyst, Alibaba benefits from e-commerce business and cloud services. However, higher costs associated with new initiatives and COVID-19 related economic uncertainties are concerns.
CVS Health (CVS) Tackles Pandemic Crisis with Digital Strategy
The Zacks analyst is upbeat about CVS Health's consumer centric digital strategy, which has become relevant in the pandemic-led stay-at-home orders.
CME Group (CME) Rides on Improving Top Line, Costs High
Per the Zacks analyst, its strong revenues driven by organic growth, steady market position and diverse product lines has led to significant growth.
Strategic Acquisitions Aid Schwab (SCHW) Amid Lower Rates
Per the Zacks analyst, Schwab's inorganic growth initiatives and other revenue diversification efforts will aid profits.
COVID-19 Test Launch Aids IDEXX (IDXX) Amid the Pandemic
The Zacks analyst is upbeat about the availability of IDEXX's SARS-CoV-2 (COVID-19) RealPCR Test for pets in response to customer demand.
Low Costs Aid Southwest (LUV), Weak Air Travel Demand Ails
Low fuel prices and cost-cutting efforts are aiding Southwest. However, the Zacks analyst is concerned about the significant loss of passenger revenues due to coronavirus-led weak travel demand.
Loan Growth Aids Huntington (HBAN), Increasing Costs Ail
Per the Zacks Analyst, growth in loans and deposits balance is expected to drive top-line expansion of the company. However, increasing costs due to technological advancements hurts growth.
Axiall Buyout, Strong Demand Aid Westlake Chemical (WLK)
Per the Zacks analyst, Westlake Chemical should gain from synergies of the Axiall acquisition and strong demand for its major products, especially in the Vinyls and Olefins segment.
Chevron Deal, High Quality Assets Aid Noble Energy (NBL)
The Zacks analyst believes Noble Energy's definite agreement with Chevron to be acquired by the latter and high quality domestic and international assets will drive its performance.
Cost Reductions and Restructuring to Aid Ashland (ASH)
Per the Zacks analyst, Ashland's restructuring actions have provided it with a diverse business portfolio and better placed it for future growth. Its cost reduction actions will also support margins.
William-Sonoma (WSM) Gains From E-Commerce, Higher Costs Ail
Per the Zacks analyst, continued enhancement of e-commerce channel is expected to drive Williams-Sonoma's growth.
Autoliv (ALV) to be Hurt by Weak European Market & Debt Pile
Per the Zacks analyst, decline in vehicle production and sales across major key markets - especially Europe - will weigh on the automotive supplier, Autoliv. High leverage of 57% is also a concern.
Clean Fuel Use, COVID-19 Outbreak Ail Arch Resources (ARCH)
Per the Zacks analyst, Arch Resources prospects has been adversely impacted by rising usage of clean energy sources, while outbreak of COVID-19 and resultant lockdown have further lowered demand.
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PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
The Home Depot, Inc. (HD) : Free Stock Analysis Report
CVS Health Corporation (CVS) : Free Stock Analysis Report
Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
CME Group Inc. (CME) : Free Stock Analysis Report
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
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