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The Zacks Analyst Blog Highlights: Cisco Systems, SAP, Gilead Sciences, Bank of America and Caterpillar

Zacks Equity Research

For Immediate Release

Chicago, IL – October 15, 2019 – 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: Cisco Systems CSCO, SAP SAP, Gilead Sciences GILD, Bank of America BAC and Caterpillar CAT.

Here are highlights from Monday’s Analyst Blog:

Top Stock Reports for Cisco, SAP and Gilead

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 Cisco Systems, SAP and Gilead Sciences. 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 >>>

Cisco’s shares have outperformed the Zacks Computer Networking industry year to date (7.4% vs. 6.4%). The Zacks analyst believes that Cisco is benefiting from solid security business. Strong contribution from Infrastructure Platforms and applications is a positive.

Moreover, order strength and improving traction of the subscription-based business model are tailwinds. Further, a strengthening collaboration portfolio, which includes Webex Teams, bodes well. Additionally, acquisitions of Voicea and CloudCherry hold promise.

However, weakness in service provider business in China remains a concern. Further, stiff competition from Arista and Juniper in switching and routing verticals is likely to create pricing pressure and impact profitability. Also, increasing investments on product enhancements are likely to limit margin expansion at least in the near term.

Shares of SAP have gained 11.8% in the past six months against the Zacks Computer Software industry’s rise of 7.9%. The Zacks analyst believes that SAP is benefiting from strong growth in cloud and software revenues, and an expanding customer base.

Robust adoption of S/4HANA, C/4HANA and SuccessFactors Employee Central favors the company’s prospects. Notably, despite the exit of CEO Bill McDermott, estimates have been moving north ahead of the company’s Q3 earnings release primarily on robust preliminary results courtesy of an upbeat cloud business. Further, Qualtrics’ acquisition is enabling SAP to bolster Customer Experience segment revenues.

Moreover, strong demand for SAP's Intelligent Spend offerings holds promise. However, increasing investments to enhance cloud-based offerings are likely to weigh on the bottom line. Currency fluctuations and trade war between the United States and China remains an overhang on software licenses revenue growth particularly across Asia.

Gilead’s shares have lost 6% over the past three months compared with the Zacks Biotech industry’s fall of 7%. The Zacks analyst believes Gilead’s HIV franchise maintains momentum on the continued uptake of Genvoya and Odefsey, and the strong uptake of Biktarvy.

The company has shifted focus to the HIV franchise and newer avenues like CAR-T therapy and NASH, due to a decline in sales of the HCV franchise. The FDA recently approved a label expansion of HIV treatment, Descovy. The company is signing deals with other companies to strengthen its pipeline for the inflammation market. Gilead’s collaboration with Novo Nordisk for NASH treatments is a step in the right direction, given its recent debacles.

The company suffered a setback with the failure of a late-stage study on selonsertib in patients with compensated cirrhosis due to NASH. Additionally, the HIV franchise is expected to face stiff competition.

Other noteworthy reports we are featuring today include Bank of America and Caterpillar.

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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.


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