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Top Stock Reports for Mastercard, Cisco & PayPal

Monday, August 22, 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 Mastercard Inc. (MA), Cisco Systems, Inc. (CSCO) and PayPal Holdings, Inc. (PYPL). 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 >>>

Mastercard shares have outperformed the Zacks Financial Transaction Services industry over the past three-month period (+1.7% vs. +0.9%). The Zacks analyst believes that the company’s profit levels are rising thanks to increasing consumer spending. Numerous acquisitions are helping it to grow addressable markets and drive new revenue streams.

The COVID-19 crisis accelerated the use of electronic payments with much greater adoption of digital and contactless solutions. The situation provides an opportunity for Mastercard's business to expedite its shift to digital mode.

The company is well-poised to gain from steady cash-generating abilities. A strong capital position allows the firm to pursue acquisitions and deploy capital. However, steep operating expenses might stress margins. High rebates and incentives may weigh on net revenues.

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

Cisco shares have declined -23.0% over the year-to-date period against the Zacks Computer - Networking industry’s decline of -23.2%. The Zacks analyst believes that Cisco is suffering from the disruptions caused by the war in Ukraine and COVID related lockdowns in China. The lockdowns resulted in severe shortage of components that hurt Cisco’s ability to ship products to customers.

Management cautioned that component shortages and ongoing supply chain issues are expected to persist in the rest of fiscal 2022 and bump up costs. This is likely to dent revenues and margin expansion.

Nevertheless, Cisco’s performance is expected to benefit from strength in its product portfolio, customer segments and momentum in product order growth. It is benefiting from healthy uptake of identity and access, advanced threat and unified threat management security solutions amid high growth in Internet traffic. The buyout of Acacia Communications bodes well for the long haul.

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

PayPal shares have underperformed the Zacks Internet - Software industry over the year-to-date period (-48.8% vs. -46.7%). The Zacks analyst believes that intensifying competition in the digital payment market poses a serious risk to the company’s market position. Further, sluggishness in international market is a concern. Foreign exchange headwinds remain risks.

Nonetheless, the company’s second quarter results were driven by strong growth in total payments volume owing to increasing net new active accounts. Strengthening customer engagement was a positive. Also, strong performance by Venmo contributed well to the TPV growth. We believe growing transaction revenues are likely to continue driving the top-line growth.

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

Other noteworthy reports we are featuring today include EOG Resources, Inc. (EOG), Vertex Pharmaceuticals Inc. (VRTX) and ICICI Bank Ltd. (IBN).

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

Mastercard's (MA) Accretive Buyouts Aid, Elevated Costs Hurt

Cisco (CSCO) Benefits From Strong Security Products Adoption

PayPal (PYPL) Benefits From Increasing Total Payment Volume

Featured Reports

Steady Investment & Renewable Focus Aid Eversource (ES)
Per the Zacks analyst, Eversource's investment of $18.1 billion within 2022-2026 time period will boost clean electricity generation, fortify its infrastructure and increase reliability of its service

EOG Resources (EOG) Banks on Premium Oil & Gas Wells
EOG Resources estimates roughly 11,500 net undrilled premium oil & gas wells, brightening the production outlook. However, rising lease and well expenses concern the Zacks analyst.

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

Technology, Loans Support ICICI Bank (IBN), High Costs Ail
Per the Zacks analyst, ICICI Bank's efforts to digitize operations, rising rates and steady loan and deposit growth will aid profitability. Yet, weak credit quality and higher costs are key concerns.

Rebound in Routine Testing Aids Bio-Rad (BIO) Amid Low Sales
The Zacks analyst is encouraged by the ongoing recovery in routine testing that drove the currency-neutral growth in Bio-Rad's Diagnostics group. Yet, declining Life Sciences sales raises concerns.

Pricing Actions Aid Fortune Brands (FBHS) Amid Cost Woes
Despite adversities from inflationary pressure and supply chain disruptions, the Zacks analyst is encouraged by pricing actions and cost-control measures driving the company's top line.

Eni (E) to Benefit From Discoveries at Meleiha Concession
The Zacks analyst believes that Eni's discoveries in the Meleiha concession of Egypt's Western Desert will strengthen its footprint in the region and boost organic growth as well as cash flow.

New Upgrades

World Wrestling (WWE) New Content Creation to Lift Revenues
Per the Zacks analyst World Wrestling's focus on content creation, driving subscriber count, raising content rights fees and monetization of content across digital and DTC platforms bodes well.

SkyWest (SKYW) Benefits From Improving Air-Travel Demand
The Zacks analyst is impressed with the fact that increased air-travel demand is helping SkyWest carry more passengers.

Cadence (CDNS) to Benefit From Strong Portfolio & Buyouts
Per the Zacks analyst, Cadence's performance is being driven by demand for the company's diversified product portfolio. New products and synergies from buyouts are expected to sustain growth momentum.

New Downgrades

Stiff Competition for Tepezza Weighs Heavily on Horizon (HZNP)
Per the Zacks analyst, Horizon's portfolio of marketed drugs faces intense competition from other healthcare companies. Also, the recent regulatory setback for Tepezza is an overhang for the company.

Cat Loss, Rising Expenses Hurt Cincinnati Financial (CINF)
Per the Zacks analyst, Cincinnati Financial's exposure to catastrophe induces volatility in its underwriting profitability while increasing expenses weighing on margin expansion are concern.

High Labor Costs Hurt Likely to Hurt Brinker's (EAT) Margin
Per the Zacks analyst, Brinker's margin in fourth-quarter fiscal 2022 is likely to be impacted by higher food and beverage as well as labor costs.

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
Mastercard Incorporated (MA) : Free Stock Analysis Report
Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
Vertex Pharmaceuticals Incorporated (VRTX) : Free Stock Analysis Report
ICICI Bank Limited (IBN) : Free Stock Analysis Report
EOG Resources, Inc. (EOG) : Free Stock Analysis Report
PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
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