Thursday, March 24, 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 Tesla, Inc. (TSLA), Cisco Systems, Inc., (CSCO) and Advanced Micro Devices, Inc. (AMD). 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 >>>
Shares of
Tesla
have handily outperformed the Zacks Automotive – Domestic industry over the past year (+56% vs. +10.3%). Along with rising deliveries of Model 3, which is the bestselling EV in the world, Model Y is boosting Tesla’s prospects. With China being the biggest EV market, Tesla’s ambitious production plans in the country bode well.
Robust production of Model 3 and Y from Shanghai gigafactory is a major positive catalyst. In addition to high automotive revenues, Tesla’s energy generation and storage revenues are also growing thanks to positive reception of Megapack and Powerwall products. Given the tailwinds, Tesla appears an attractive bet and is poised for stock price appreciation.
(You can
read the full research report on Tesla here >>>
)
Shares of
Cisco
have modestly outperformed the Zacks Computer – Networking industry over the past year (+7.9% vs. +6.5%) on the back of strength in its product portfolio, customer segments and momentum in product order growth. Strength in Webscale business and solid uptake of switching solutions, especially Catalyst 9000 and Meraki offerings, along with robust adoption of the company’s subscription-based offerings were tailwinds. The company 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. 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. Shares have underperformed the industry year to date.
(You can
read the full research report on Cisco here >>>
)
Shares of
Advanced Micro Devices
have outperformed the Zacks Electronics – Semiconductors industry over the past year (+49.5% vs. +20.4%). The Zacks analyst believes that AMD is benefiting from sales of its Ryzen and EPYC server processors, owing to increasing proliferation of Artificial Intelligence (AI) and Machine Learning (ML) in industries like cloud, gaming and datacenter domains. Growing clout of 7 nanometer (nm) products in the data center vertical, driven by work-from-home and online learning trends, is a key catalyst.
AMD provided strong 2022 guidance for revenues on the back of robust growth across all businesses. The sequential increase is projected to be led by higher server and client processor revenues. The Xilinx acquisition will boost AMD’s data center business. Moreover, alliances with Amazon, Microsoft, Baidu and JD.com augment business prospects. However, stiff competition from NVIDIA and Intel is a concern.
(You can
read the full research report on Advanced Micro Devices here >>>
)
Other noteworthy reports we are featuring today include CSX Corporation (CSX), Truist Financial Corporation (TFC) and The TJX Companies, Inc. (TJX).
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
Tesla (TSLA) Rides on High Demand for Models 3 & Y
Cisco (CSCO) Benefits From Strong Security Products Adoption
Robust Product Portfolio & Partnerships Aid AMD’s Prospects
Featured Reports
Solid Investments Aid PG&E Corp (PCG) Amid Rising Costs
Per the Zacks analyst, consistent investments boost PG&E Corp’s infrastructure and customer reliability. Yet, the stock is incurring incremental operating costs due to the pandemic.
Diverse Production Mix to Aid Canadian Natural (CNQ)
The Zacks analyst sees Canadian Natural’s diverse production mix facilitating long-term value and reducing risk profile but is worried about the company’s debt maturities each year out till 2027.
CSX’s Dividends & Buybacks a Boon, Operating Expenses a Bane
The Zacks analyst welcomes CSX’s efforts to add shareholder value despite the current uncertain scenario. However, high operating expenses, mainly due to escalated fuel costs, are worrisome.
The TJX Companies’ (TJX) Solid HomeGoods Segment Aids Growth
Per the Zacks analyst, The TJX Companies is benefiting from solid HomeGoods unit. In fiscal fourth-quarter open-only comp store sales rose 22% in the HomeGoods (U.S.) unit from fiscal 2020???s level.
Business Restructuring Supports Truist (TFC), High Costs Ail
Per the Zacks analyst, Truist Financial’s efforts to consolidate branches and undertake strategic buyouts will keep aiding growth. Yet, rising costs and relatively lower rates are near-term concerns.
Robust Occupancy Likely to Aid Caesars Entertainment (CZR)
Per the Zacks analyst, strong performance of the regional destination properties and improvement in occupancy levels will continue to drive Caesars Entertainment performance.
Corcept’s (CORT) Sole Drug Korlym Aid Growth Amid Competition
Per the Zacks analyst, Corcept’s Cushing’s syndrome drug Korlym is witnessing higher sales and a strong uptake since approval. However, sole dependence on Korlym for revenues remains a headwind
New Upgrades
Sunoco (SUN) to Gain From Rising Motor Fuel Sales Volume
Per the Zacks analyst, Sunoco is cashing in on higher motor fuel sale volume, which is being distributed to convenient stores. This will get translated to increased distributable cash flows.
Cincinnati Financial (CINF) Benefits From Commercial Lines
Per the Zacks analyst, consistent progress at the Commercial Lines Insurance segment backed by solid premiums earned and several growth initiatives contributes to revenue growth of the company.
Higher Demand, Cost Reductions to Aid Mosaic (MOS)
The Zacks analyst believes that Mosaic is well placed to gain from rising demand for phosphate and potash. Efforts to drive down costs through transformation actions will also support its margins.
New Downgrades
High Operating Costs Dent Altice’s (ATUS) Profitability
Per the Zacks analyst, Altice remains plagued by high operating costs driven by soaring programming expenses per customer due to an increase in contractual rates, which hurt its overall profitability.
Regulatory Concerns & Rising Competition Hurt Alibaba (BABA)
Per the Zacks analyst, regulatory concerns regarding Alibaba’s monopolistic behavior along with intensifying competition in e-commerce as well as cloud computing market are overhangs.
Rising Costs Irk Omnicell (OMCL), Macroeconomic Woes Prevail
The Zacks analyst is worried about Omnicell’s mounting operating expenses that is building pressure on its bottom line. The ongoing inflationary and supply-chain headwinds do not bode well.
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