Wednesday, May 4, 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 Microsoft Corp. (MSFT), Meta Platforms, Inc. (FB), and Thermo Fisher Scientific Inc. (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 >>>
Shares of
Microsoft
have outperformed the Zacks Computer – Software industry over the past year (+16.1% vs. +3.9%). The company’s revenue benefited from the strong performance of Azure, Office 365, Dynamics, LinkedIn, and Server products.
However, third-quarter earnings were negatively impacted by the Nuance acquisition to the tune of a penny. Unfavorable forex and the Russia-Ukraine conflict are expected to hurt revenues. The Zacks analyst believes that Microsoft continues to expect the Nuance acquisition to be minimally dilutive in fiscal 2022 and accretive in fiscal 2023 to non-GAAP earnings. Increasing spending on Azure enhancements amid stiff competition in the cloud space is a headwind.
(You can
read the full research report on Microsoft here >>>
)
Meta Platforms
shares have declined -33.5% over the past year against the Zacks Internet – Software industry’s decline of -49.4%. The company’s results suffered from Apple’s iOS changes as well as engagement-related headwinds. Apple’s iOS changes have made ad targeting difficult, which, in turn, has increased the cost of driving outcomes.
Meta expects these factors to hurt advertising revenue growth in throughout 2022. Meta’s second-quarter guidance reflects macroeconomic and forex concerns. The Zacks analyst believes that Cost inflation and supply chain disruptions are expected to impact advertiser budgets.
However, Meta is benefiting from steady user growth across all regions, particularly Asia Pacific. Increased engagement for its products like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver.
(You can
read the full research report on Meta Platforms here >>>
)
Shares of
Thermo Fisher
have outperformed the Zacks Medical – Instruments industry over the past year (+16.5% vs. -13.1%). The Zacks analyst believes that the robust year-over-year revenue growth in the Analytical Instruments and the Laboratory Products and Biopharma Services segments appears promising. The company’s strategic acquisitions of PPD, Inc. and PeproTech raise investors’ confidence.
Thermo Fisher’s accelerated investments to expand bioproduction capacity also buoy optimism. The upbeat guidance for 2022 is indicative that this growth momentum will continue. However, the year-over-year decline in revenues in the Specialty Diagnostics segment is disappointing. The contraction of both margins does not bode well either.
(You can
read the full research report on Thermo Fishers here >>>
)
Other noteworthy reports we are featuring today include Berkshire Hathaway Inc. (BRK.B), NextEra Energy, Inc. (NEE), and HSBC Holdings plc (HSBC).
Mark Vickery
Senior Editor
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 Cloud & Office 365 Strength Aid Microsoft (MSFT)
Solid User Base, Instagram Strength Aid Meta Platforms (FB)
Thermo Fisher (TMO) Advances in Bioprocess, End Market Up
Featured Reports
Solid Insurance Business Aid Berkshire (BRK.B), Cat Loss Ail
Per the Zacks analyst, Berkshire is posed to grow on solid insurance business that drive earnings and generates maximum return on equity. However, exposure to cat loss induces earnings volatility.
Renewable Focus & Steady Investment Aid NextEra Energy (NEE)
Per the Zacks analyst, NextEra’s planned capital investment to enhance clean electricity generation and strengthen its infrastructure will boost its profitability.
Expansion Efforts Aid HSBC Holdings (HSBC), High Costs a Woe
Per the Zacks analyst, while HSBC Holdings’ efforts to expand in Asia and U.K. will strengthen its performance and increase market share, it might lead to higher costs, which will hurt bottom line.
High Demand & Operational Excellence Aid Weyerhaeuser (WY)
Per the Zacks analyst, Weyerhaeuser’s focus on operational excellence plans, like merchandising for value, harvest & transportation efficiencies & more, along with high product demand are encouraging.
Seagen’s (SGEN) Cancer Drugs Aids Growth Amid Stiff Rivalry
Per the Zacks analyst, Seagen’s lead cancer drug Adcetris along with newly approved Padcev, Tukysa and Tivdak are driving revenue growth. Stiff competition in the target market remains a concern.
Southwestern (SWN) to Gain From GEP Haynesville Acquisition
Per the Zacks analyst, Southwestern’s acquisition of GEP Haynesville will help build additional scale in Haynesville, with production of 700 MMcf per day. Yet, its rising debt level is concerning.
Upbeat Rental Revenues and Strong Guidance Boost Ryder (R)
The Zacks analyst is optimistic about Ryder’s higher rental revenues on strong demand and favorable pricing. Moreover, a raised 2022 guidance is aiding the stock’s prospects.
New Upgrades
Construction Materials to Drive Carlisle’s (CSL) Revenues
Per the Zacks analyst, strong traction of Carlisle’s Construction Materials segment, fueled by solid demand for commercial roofing products in the United States and Europe will drive its revenues.
Loan Growth, GEAR Up Initiatives to Drive Comerica (CMA)
Per the Zacks analyst, Comerica’s improving loan commitments, amid recovery in the economy will drive loan balance while focus on driving long-term efficiency through GEAR Up initiative is encouraging
Solid Demand, New Products to Aid Lincoln Electric (LECO)
The Zacks analyst believes Lincoln Electric is poised to benefit from solid demand in its end-markets, focus on developing new products and investing in automation and acquisitions.
New Downgrades
Supply Chain Woes & Stiff Competition to Hurt NETGEAR (NTGR)
Per Zacks analyst, pandemic induced supply chain troubles and component shortages continue to be a major headwind for NETGEAR. Intensifying competition and increasing expenses are other concerns.
Supply Chain Woes & Higher Costs Dent Gap’s (GPS) Margins
Per the Zacks analyst, higher air freight due to supply-chain woes, dented Gap’s margins in Q4. Elevated costs for marketing and technology, as well as compensation and fulfilment are also deterrents.
Increasing Expenses and High Debt Hurt HCA Healthcare (HCA)
Per the Zacks analyst, HCA Healthcare’s rising expenses will keep eroding its profit levels. Also, its high leverage can affect financial flexibility.
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