Wednesday, May 17, 2023
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 Broadcom Inc. (AVGO), Bank of America Corp. (BAC) and Thermo Fisher Scientific Inc. (TMO). 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 >>>
Broadcom shares have outperformed the Zacks Electronics - Semiconductors industry over the past year (+16.0% vs. +10.3%), though the stock has lagged the industry in the year-to-date period. The company’s top-line growth was driven by strength in networking and server storage. It witnessed strong growth from the deployment of Tomahawk 4 for data center switching at hyperscale customers.
Upgrades of edge and core routing networks with Broadcom’s next-generation Jericho portfolio at cloud and service providers also benefited top-line growth. Broadcom’s storage connectivity gained from substantial content increases at both cloud and enterprise customers.
Broadcom expects fiscal first-quarter networking and server storage revenues to grow 20% and 50% on a year-over-year basis, respectively. The VMware acquisition will boost prospects. However, increasing competition, along with high debt levels, are persistent overhangs.
(You can read the full research report on Broadcom here >>>)
Shares of Bank of America have underperformed the Zacks Banks - Major Regional industry over the past six months (-25.5% vs. -15.9%). The weakening economic backdrop is weighing on the investment banking (IB) business, a trend that is expected to remain in place at least through the remainder of this year. This, along with the volatile nature of the capital markets, will hurt non-interest income. Our estimates for the same show 2.1% rise for 2023.
A tough operating backdrop will lead to higher provisions, with we projecting a substantial jump in the metric this year. Inflationary pressure will result in mounting expenses. According to the Zacks analyst estimates total non-interest expenses implies a rise of 1.9% this year.
However, higher rates and decent loan demand will aid net interest income (NII). The opening of new financial centers and improving digital capabilities will bolster the top line.
(You can read the full research report on Bank of America here >>>)
Shares of Thermo Fisher Scientific have underperformed the Zacks Medical - Instruments industry over the past year (-3.9% vs. +4.9%). The company is witnessing year-over-year decline in revenues in the Life Science Solutions and Specialty Diagnostics segment is disappointing. The contraction of margins does not bode well either.
However, robust year-over-year revenue growth in the Analytical Instruments and the Laboratory Products and Biopharma Services segments appears promising. During the first quarter, Thermo Fisher launched a range of high-impact, advanced new products, including the Thermo Scientific iCAP RQ Plus ICP-MS Analyzer.
Thermo Fisher Scientific company continued to strengthen its unique customer-value proposition by advancing the strategic partnership with the University of California, San Francisco (UCSF).
(You can read the full research report on Thermo Fisher Scientific here >>>)
Other noteworthy reports we are featuring today include Chubb Limited (CB), Petróleo Brasileiro S.A. - Petrobras (PBR) and Aon plc (AON).
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
Broadcom (AVGO) Drives on Wireless Products & Acquisitions
Higher Rates, Loans Support BofA (BAC) Amid Fee Income Woes
Thermo Fisher (TMO) Banks on PPD Buyout Amid Stiff Rivalry
Better Rate, Increased Exposure Aid Chubb (CB), Cat Loss Ail
Per the Zacks analyst, Chubb is set to grow on better rate environment, increasing exposures and market share, solid capital position and cash generation capabilities. Yet, exposure to cat loss ails.
Pre-Salt Reserves Boosts Petrobras (PBR), Debt Pile Hurts
Petrobras' stakes in Brazil's attractive pre-salt oil reservoirs should boost its earnings outlook. However, the Zacks analyst is concerned over the company's huge debt load of $37.6 billion.
Aon's (AON) Robust Retention Aids, Rising Debt Level Hurts
Per the Zacks analyst, business generation, strong retention and strategic acquisitions are helping AON enhance its capabilities and profit levels. However, rising debt remains a concern.
Verisk (VRSK) Gains From Opta Buyout, Operational Risks Stay
Per the Zacks analyst, the Opta acquisition is expected to expand Verisk's footprint in the Canadian market. Chances of security breach remains as a concern.
Brand Strength to Drive Molson Coors' (TAP) Performance
Per the Zacks analyst, Molson Coors has been gaining from strength in Coors Light and Miller Lite brands. Also, its above premium portfolio and gains from Revitalization Plan act as growth drivers.
Strong Demand For Hot Wheels Boosts Mattel's (MAT) Prospects
Per the Zacks analyst, Mattel is poised to benefit from strong demand for Hot wheels, digitalization initiatives and Optimizing for Growth program. Also, focus on its IP-driven toy business bode well.
Advanced Technology, Acquisitions Aid Consolidated Water (CWCO)
Per the Zacks analyst, Consolidated Water's usage of most advanced technology in conversion to potable water will help meet rising customer demand. The acquisition of PERC is expected to drive earning
Metal Prices and Healthy Portfolio Aids Franco-Nevada (FNV)
Per the Zacks analyst, recent pick up in gold and silver prices will drive Franco-Nevada's performance. The company's healthy portfolio of streaming and royalty agreements are also driving margins.
Government Services Group segment Benefits Tetra Tech (TTEK)
Per the Zacks analyst, Tetra Tech is benefitting from its Government Services Group Segment, driven by robust water and environmental programs. A strong backlog level is also beneficial.
Blackbaud (BLKB) Benefits from Higher Transactional Revenue
Per the Zacks analyst, Blackbaud's performance is gaining from higher transactional volume and increasing customer renewal rates. Also, frequent product launch is a tailwind.
Emergent's (EBS) Declining Product Revenues Is a Concern
Zacks analyst is concerned about Emergent's declining revenues owing to a decline in the delivery of anthrax vaccine to the U.S. government and the launch of a generic drug Narcan in 2021.
Adient Plc (ADNT) Grapples With Commodity Prices & High Debt
Per the Zacks analyst, rising steel prices in North America will limit Adient's near-term results. High debt levels are also concerning.
Sluggish Smartphone Market Hurts Skyworks' (SWKS) Prospects
Per Zacks analyst, Skyworks is struggling due a weak smartphone market and stiff competition from the likes of Qorvo.
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