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The Zacks Analyst Blog Highlights: Adobe, Costco, Union Pacific, NextEra Energy and Altria Group

Zacks Equity Research
·5 min read

For Immediate Release

Chicago, IL – October 9, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Adobe Inc. ADBE, Costco Wholesale Corporation COST, Union Pacific Corporation UNP, NextEra Energy, Inc. NEE and Altria Group, Inc. MO.

Here are highlights from Thursday’s Analyst Blog:

Top Stock Reports for Adobe, Costco and Union Pacific

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 Adobe, Costco Wholesale and Union Pacific. 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 >>>

Adobe shares have outperformed the Zacks Software industry in the year to date period (+49.5% vs. +32%). The Zacks analyst is optimistic about Adobe’s market position, compelling product lines, continued innovation, solid adoption of Creative Cloud and Adobe marketing cloud. Adobe is gaining from strong demand for its creative products.

The company’s Creative Cloud, Document Cloud and Adobe Experience Cloud products are driving the top-line growth. Further, rising subscription revenues and solid momentum across mobile apps are major positives. Additionally, growth in emerging markets, robust online video creation demand and improving average revenue per user are tailwinds.

However, lower end-market demand is a concern. Further, significant exposure in Europe is an overhang due to foreign currency headwinds. Additionally, high acquisition expenses do not bode well for margin expansion.

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

Shares of Costco have gained +22.3% over the past year against the Zacks Discount Retail industry’s rise of +17.2%. The Zacks analyst believes that the company’s growth strategies, better price management, decent membership trends and increasing penetration of e-commerce business reinforce its position.

Being an essentials retailer, Costco has been benefiting from the coronavirus-induced spike in demand. Cumulatively, these factors have been aiding in registering impressive sales and earnings numbers. Costco put up a stellar performance in fourth-quarter fiscal 2020, wherein both the top and the bottom line beat the Zacks Consensus Estimate and grew year over year.

It also maintained a decent comparable sales run. However, Costco witnessed incremental expenses related to COVID-19 for the second quarter in row. Such investments or aggressive pricing strategy are likely to exert pressure on the margins.

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

Union Pacific shares have gained +37.6% over the past six months against the Zacks Rail industry’s rise of +34.5%. The Zacks analyst expects Union Pacific's third-quarter 2020 results to be hurt by tepid freight revenues as was the case in the first two quarters of the year.

Notably, the metric was down 14% in first-half 2020. The same is being hurt, mainly by coronavirus-induced depressed volumes. Notably, overall volumes are likely to decline around 10% in the current year. However, reduced costs, courtesy of the precision scheduled railroading model, are likely to have aided the bottom line in the September quarter.

Moreover, akin to the first two quarters, the company is likely to have generated impressive free cash flow in the to-be-reported quarter. Notably, free cash flow surged 58.9% in the first six months of 2020. Also, its parcel business is likely to have performed well owing to the buoyancy in e-commerce demand.

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

Other noteworthy reports we are featuring today include NextEra Energy and Altria Group.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.

Click here for the 6 trades >>

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Zacks Investment Research

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Click to get this free report Union Pacific Corporation (UNP) : Free Stock Analysis Report Altria Group, Inc. (MO) : Free Stock Analysis Report Costco Wholesale Corporation (COST) : Free Stock Analysis Report Adobe Systems Incorporated (ADBE) : Free Stock Analysis Report NextEra Energy, Inc. (NEE) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research