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Top Stock Reports for Microsoft, Tesla & Thermo Fisher

Sheraz Mian
·7 min read

Friday, July 24, 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 Microsoft (MSFT), Tesla (TSLA) and Thermo Fisher Scientific (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 >>>

Microsoft shares weakened following the Q2 quarterly results. But pullback likely has more to do with how the stock performed this year than anything specific in teh quraterly report (the stock gained +44.1% in the last 12 months vs. +8.4% for the S&P 500 index). If anything, the post-release pullback has provided investors the opportunity to enter a quality Tech leader that is benefitting from momentum in Azure, impressive Teams user growth and tele healthcare trends.

Solid uptake of Surface devices and Xbox Game Pass aided growth. The company is also gaining from growing user base of its different applications including Office 365 commercial, and Dynamics. Moreover, Azure’s expanding customer base is a key catalyst. Furthermore, it is well poised to expand the total addressable market through acquisitions of GitHub and Flipgrid.

However, macroeconomic weakness in job market and lower spend on advertising due to coronavirus pandemic are likely to weigh on LinkedIn and Search revenues. Also, delays in consulting business are anticipated to limit growth.

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

Shares of Tesla have literally been firing on all cylinders, with the stock up an impressive +79.2% over the last three months against the +12.8% gain in the S&P 500 index over the same time period. While it is hard to envision this magnitude of momentum sustaining itself over the near to medium term, the Zacks analyst remains optimistic given Tesla's first-mover advantage in the EV space with high range vehicles, superior technology, and software edge.

Robust Model 3 demand, ramp up of model Y poduction, significant Shanghai Gigafactory progress, amazing line-up of upcoming products and aggressive expansion efforts bode well for the firm. The red hot EV maker recently posted the fourth consecutive quarterly profit, which qualifies it for inclusion in the S&P 500 list.

However, high R&D, SG&A costs and massive capex may clip the margins. Tesla is investing heavily to increase production capacity, boost sales and construct Gigafactories, which are likely to strain its near-term prospects. Waning margins for Model S/X is another concern. Thus, investors should wait for a better entry point.

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

Thermo Fisher’s shares have gained +22.7% over the past six months against the Zacks Medical Instruments industry’s rise of +15%. The Zacks analyst is encouraged by the exceptionally strong year-over-year revenue growth at Life Sciences Solutions segment. In terms of end market, pharma and biotech registered growth on robust performance in bioproduction and pharma services businesses.

Thermo Fisher ended the second quarter with better-than-expected numbers. The company delivered an outstanding quarterly performance, leveraging on its capacity to extend support amid the pandemic. In terms of end market, pharma and biotech registered growth on robust performance in bioproduction and pharma services businesses.

Thermo Fisher’s agreement to acquire molecular diagnostic major QIAGEN N.V. seems strategic. However, the coronavirus outbreak has massively disrupted the global supply chain. Two of the end markets registered loss in the first quarter, largely due to customer shutdowns in China

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

Other noteworthy reports we are featuring today include Enbridge (ENB), ABB Ltd (ABB) and Suncor Energy (SU).

Zacks’ Single Best Pick to Double

From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.

With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.

The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.

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Sheraz Mian

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

Adoption of Azure & Office 365 Strength Aid Microsoft (MSFT)

Tesla (TSLA) Rides on Model 3/Y Demand Amid High SG&A Costs

COVID-19 Tests Sales, QIAGEN Pact to Aid Thermo Fisher (TMO)

Featured Reports

Enbridge (ENB) Banks on C$10B Midstream Growth Projects

The Zacks analyst expects Enbridge to generate additional fee-based revenues from C$10-billion midstream growth projects.

Growth Investments Supports ABB Despite Soft Market Demand

Per the Zacks analyst, ABB's organic growth investments along with diligent cost-cutting actions will boost its competency.

Suncor (SU) Buoyed by Integrated Business Model

The Zacks analyst believes that Suncor's integrated business model positions it well for strong cash flow generation.

Nutrition Segment to Drive Archer Daniel's (ADM) Top Line

Per the Zacks analyst, Archer Daniels top line gains from strength the Nutrition segment on growth in human and animal nutrition businesses.

Soliris, Ultomiris Fuel Alexion (ALXN), Dependence A Concern

Sustained growth in demand for lead drug, Soliris and encouraging uptake of long-acting C5 complement inhibitor, Ultomiris fuel Alexion.

Weyerhaeuser (WY) Rides on Operational Excellence, Demand Low

Per the Zacks analyst, Weyerhaeuser focuses on operational excellence plans, like merchandising for value.

Robust UroLift Momentum Continues to Aid Teleflex (TFX)

The Zacks analyst is upbeat about UroLift's strong momentum despite the pandemic. Strength in majority of segments and geographies amid the outbreak buoys optimism.

New Upgrades

Growth in Personal Electronics Aids Texas Instruments (TXN)

Per the Zacks analyst, growth in the personal electronics market owing to coronavirus induced increasing work-from-home trend is benefiting the top-line of Texas Instruments.

Free Cash Flow & Grain Shipments Aid Canadian National (CNI)

The Zacks analyst appreciates the company's strong free cash flow generation. Upbeat grain movement is a bonus.

End-Market Strength & Diversification Aids Amphenol (APH)

Per the Zacks analyst, Amphenol benefits from strong information technology and data communications end-market demand. Diversified business model also lowers volatility of individual geographies.

New Downgrades

Hong Kong Disruptions Concerns Ralph Lauren (RL) Investors

Per the Zacks analysts, Ralph Lauren's Asia unit has been witnessing headwinds from protest-related business disruptions in Hong Kong. These headwinds are also likely to hurt results in the near term.

Sluggish Truck Demand & Elevated Debt to Ail Meritor (MTOR)

Softening heavy-duty truck markets in the United States and declining demand for Class 8 trucks is likely to dent Meritor's sales. The Zacks analyst is also worried of its elevated leverage of 76%.

DXC's Growth Prospects to be Hurt by Lower IT Spending

Per the Zacks Analyst, DXC's growth prospects might be hurt by soft IT spending as organizations are pushing back their investments in big and expensive tech products amid the coronavirus crisis.

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
Tesla, Inc. (TSLA) : Free Stock Analysis Report
Thermo Fisher Scientific Inc. (TMO) : Free Stock Analysis Report
Suncor Energy Inc. (SU) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Enbridge Inc (ENB) : Free Stock Analysis Report
ABB Ltd (ABB) : Free Stock Analysis Report
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