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The Zacks Analyst Blog Highlights: NVIDIA, Costco Wholesale, Stryker, Advanced Micro Devices and CSX

Zacks Equity Research

For Immediate Release

Chicago, IL – February 21, 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: NVIDIA NVDA, Costco Wholesale COST, Stryker SYK, Advanced Micro Devices AMD and CSX Corporation CSX.

Here are highlights from Thursday’s Analyst Blog:

Q4 Earnings Scorecard and Analyst Reports for NVIDIA, Costco and Stryker

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 NVIDIA, Costco Wholesale and Stryker. We have also provided a real-time update on the ongoing Q4 earnings season. The research reports featured here 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 >>>

Q4 Earnings Season Scorecard

Including all of this morning's reports, we now have Q4 results from 432 S&P 500 members or 86.4% of the index's total membership. Total earnings for these companies are up +2.1% from the same period last year on +4.6% higher revenues, with 72% beating EPS estimates and 65.5% beating revenue estimates. 

This is a better showing than we have seen from these companies in the first three quarters of 2019. 

For more details about the Q4 earnings season and evolving expectations for the current period, please check our weekly Earnings Trends report here >>>Q1 Estimates Holding Up Despite Virus Impact

NVIDIA’s shares have outperformed the Zacks General Semiconductor industry over the past year (+102% vs. +47.8%). The Zacks analyst believes that the company is benefiting from strong growth in GeForce desktop and notebook GPUs, which is boosting gaming revenues. Moreover, an increase in Hyperscale demand was a tailwind for the Data Center business.

NVIDIA's fourth-quarter fiscal 2020 results reflected strength in Data Center and Gaming end markets. Further, the solid uptake of AI-based smart cockpit infotainment solutions is a boon. Additionally, strength across desktop workstation products is aiding Professional Visualization revenues.

However, in the near term, management expects a $100-million negative impact of the coronavirus menace on revenues. Moreover, the U.S.-China trade war remains a key concern. Also, lower demand for notebook workstations might be a near-term hindrance. 

Shares of Costco have gained +17.1% in the past six months against the Zacks Discount Retail industry's rise of +16.6%. The Zacks analyst believes that that the company’s business model and commitment toward opening membership warehouses will continue to drive traffic.

The company’s growth strategies, better price management, sturdy comps performance and strong membership trends reinforce its position. Moreover, with the wave of digital transformation, Costco is rapidly adopting the omni-channel mantra to provide a seamless shopping experience, whether online or in-stores.

Such concerted efforts have been favoring comps, which remain one of the key factors behind incremental sales. Comps grew 6.6%, while sales improved 8% during month of January. However, any higher investments or aggressive pricing strategy may hurt margins. Moreover, rising SG&A expenses and stiff competition also pose concerns.

Stryker’s shares have gained +11.9% over the past three months against the Zacks Medical Products industry's rise of +5.7%. The Zacks analyst believes that Stryker continues to gain from its core MedSurg unit, which put up a strong show in the fourth quarter. Additionally, strength in flagship Mako platform continues to favor the company.

Stryker exited fourth-quarter 2019 on a strong note, wherein both earnings and revenues beat their respective consensus marks. Moreover, solid performance by the neurotech product lines drove the core Neurotechnology & Spine unit in the quarter under review. Robust international growth also instills investor optimism in the stock.

Expansion in operating margin is a positive while a strong outlook for 2020 is indicative of bright prospects. However, pricing pressure continues to plague Stryker. Stiff competition in the MedTech space remains a headwind.

Other noteworthy reports we are featuring today include Advanced Micro Devices and CSX Corporation.

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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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