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Top Stock Reports for Apple, NVIDIA & McDonald's

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·6 min read
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Monday, June 20, 2022

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 Inc. (AAPL), NVIDIA Corp. (NVDA) and McDonald's Corp. (MCD). 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 declined -0.1% over the past year against the S&P 500’s decline of -12.4%. The company expects COVID-induced supply chain disruptions and industry-wide silicon shortages to hurt the top line by $4-8 billion. Unfavorable forex conditions along with the absence of Russian revenues is also expected to hurt the top line.

Nevertheless, Apple is benefiting from continued momentum in the Services and robust performance from iPhone, Mac, Wearables and an expanding App Store ecosystem. Also, the availability of new Mac Studio and new iPad Air is expected to drive top-line growth.

Apple TV+ is gaining recognition due to award-winning shows. This bodes well for the Services segment. Services revenue growth is expected to be in strong double digits for the June quarter.

(You can read the full research report Apple here >>>)

NVIDIA shares have declined -13.8% over the past year against Zacks Semiconductor - General industry’s decline of -19.1%. The company’s management expects COVID-19 pandemic to negatively impact near-term revenues. Moreover, the U.S.-China trade war remains a key concern.

However, NVIDIA is benefiting from the coronavirus-induced work and learn-from-home wave. It is also benefiting from strong growth in GeForce desktop and notebook Graphic Processing Units, which is boosting gaming revenues. Moreover, a surge in Hyperscale demand remains a tailwind for the company’s Data Center business. Expansion of NVIDIA GeForce NOW is expected to drive its user base.

Further, a solid uptake of artificial intelligence-based smart cockpit infotainment solutions is a boon. Additionally, collaboration with Mercedes-Benz is expected to further strengthen NVIDIA’s presence in the autonomous vehicles and other automotive electronics space.

(You can read the full research report NVIDIA here >>>)

McDonald's shares have outperformed the Zacks Retail - Restaurants industry over the past year (+2.8% vs. -20.9%). The company continues to impress investors with robust comps growth. Strong drive-thru presence and its investments in delivery and digitization over the past few years have aided McDonald’s in countering the pandemic. Robust digitalization will help the company in driving long-term growth and capturing market share.

The company is focusing on store expansion. It is planning to open more than 1,800 restaurants globally in 2022. The company is also benefiting from the robust loyalty program. It is very optimistic about building the world’s largest loyalty program.

The loyalty program is likely to drive sales and average checks. However, coronavirus-related woes persist. In the first quarter of 2022, comps in the China market were hurt by the pandemic.

(You can read the full research report McDonald’s here >>>)

Other noteworthy reports we are featuring today include Cisco Systems, Inc. (CSCO), CVS Health Corp. (CVS) and Vertex Pharmaceuticals Inc. (VRTX).

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

Robust Portfolio, Services Strength to Benefit Apple (AAPL)

Strong GPU Adoption in Gaming, Datacenter Aids NVIDIA (NVDA)

Loyalty Program Aid McDonald's (MCD), China Comps Woes Stay

Featured Reports

Cisco (CSCO) Benefits From Strong Security Products Adoption
Per Zacks analyst, Cisco is benefiting from a rapidly growing security market driven by robust adoption of identity and access, advanced threat and unified threat management security solutions.

Strong Retail Sales Aid CVS Health (CVS), Weak Margins Ail
The Zacks analyst is optimistic about CVS Health's impressive retail revenue growth on high prescription and front store volume. Yet, contraction of both margins weigh on its bottom line.

Vertex (VRTX) Cystic Fibrosis Sales Up, Non-CF Pipeline Solid
Vertex's cystic franchise (CF) sales are rising driven by Trikafta. The Zacks analyst is encouraged by the rapid progress of its non-CF pipeline with data from multiple programs presented in 2022.

Cost Cuts Aid Southern Copper (SCCO), Lower Production Ail
The Zacks analyst likes Southern Copper's focus on cost reduction, industry-leading copper reserves and expansion actions. However lower production levels due to lower grades might impair results.

High Margin Assets & Cost Management Aid Devon Energy (DVN)
Per the Zacks analyst Devon's strong production from its high margins assets and efficient cost management will drive performance over the long run.

TELUS to Benefit From Higher Subscriber Base Amid 5G Boom
Per the Zacks analyst, TU will benefit from increased subscriber base amid expansion of its PureFibre network. Intense competition and high-debt burden remain concerns.

Conagra Brands (CAG) Benefits From Strategic Pricing Action
Per the Zacks analyst, Conagra Brands' efficient pricing actions are offering respite amid high costs. The price/mix improved by 8.6% and aided organic sales growth of 6% in fiscal third-quarter.

New Upgrades

Suncor (SU) Buoyed by Integrated Business Model
The Zacks analyst believes that Suncor's integrated business model makes it less exposed to the volatile commodity market and positions it well for strong cash flow generation.

Phillips 66 (PSX) to Gain From Higher Distillate Fuel Demand
Per the Zacks analyst, Phillips 66 is well-positioned to benefit from a higher distillate fuel demand amid changes in the marine fuel sulfur limits.

Solid Top Line, Strong Cash Flows Aid American Financial (AFG)
Per the Zacks analyst, its strong revenues driven by higher net investment income, net earned premiums have led to significant growth. Moreover, its healthy balance sheet should drive long-term growth

New Downgrades

Escalating Fuel Prices Take a Toll on Ryanair (RYAAY)
The Zacks analyst is concerned about Ryanair's bottom line being hurt by rising fuel prices, thanks to the war tensions. Increase in airport and handling charges is also affecting the bottom line.

Increased Cat Loss & Elevated Debt Level Hurt Allstate (ALL)
Per the Zacks analyst, exposure to catastrophic events continues to dent underwriting profitability. Rising debts remain a concern as it leads to escalated interest expenses.

Falling Fee Income, High Debt Ail New York Community (NYCB)
Per the Zacks Analyst, New York Community's declining non-interest income might hinder revenue growth, while limited liquidity and high debt levels make capital deployment activities unsustainable.

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