Monday, October 26, 2020
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including Advanced Micro Devices (AMD), Workday (WDAY) and Moody's (MCO). 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 >>>
AMD shares have outperformed the Zacks Electronics - Semiconductors industry in the year to date period (+75.8% vs. +30.7%). The Zacks analyst believes that AMD is benefiting from robust adoption of 7 nanometer-based Ryzen, Radeon and latest second-generation EPYC server processors, courtesy of increasing proliferation of AI and ML in industries like cloud gaming and supercomputing domain.
Growing clout of AMD’s products in the data center vertical, driven by work-from-home and online learning trends, remains a key catalyst. Further, partnerships with Amazon, Microsoft, Baidu and JD.com are opening newer business avenues.
However, broad-based macroeconomic weakness owing to coronavirus-induced lockdowns is likely to put pressure on desktop processor-related sales. Also, increasing expenses on account of product development amid stiff competition from NVIDIA and Intel are likely to dent margins at least in near term.
(You can read the full research report on AMD here >>>)
Shares of Workday have gained +46.7% over the past year against the Zacks Internet Software industry’s rise of +104.7%. The Zacks analyst believes that Workday is poised to gain from solid adoption of subscription-based software solutions, which is driving revenues.
Also, the company raised fiscal 2021 guidance for subscription and professional revenues on strong backlog and solid pipeline. Moreover, synergies from Scout RFP acquisition are helping it secure deal wins. Extended capabilities and tools in Human Capital Management and Financial Management solutions are likely to boost user base.
Also, strong balance sheet and cash flow generating ability are anticipated to drive growth initiatives in the long haul. However, stiff competition from Oracle and SAP is likely to hurt profitability at least in the near term. Moreover, coronavirus-induced layoffs might negatively impact contract renewals, which is a headwind.
(You can read the full research report on Workday here >>>)
Moody's shares have gained +14.7% over the past six months against the Zacks Financial Miscellaneous Services industry’s rise of +23.9%. The Zacks analyst believes that the company remains well poised for growth on the back of the dominant position in the credit rating industry and strong balance sheet position. Inorganic growth strategy is expected to help in further diversifying revenue sources.
Its earnings have outpaced the Zacks Consensus Estimate in each of the trailing four quarters. Earnings estimates have been going up ahead of its third quarter 2020 results. However, volatility and a challenging macro-economic environment will likely hamper the company's financials to an extent.
Persistently mounting costs, mainly owing to investments in franchise and acquisitions, will likely hurt bottom line to some extent. Stiff competition is expected to put pressure on pricing, which in turn might hamper the company's financials in the long run.
(You can read the full research report on Moody's here >>>)
Other noteworthy reports we are featuring today include Ericsson (ERIC), IDEXX Laboratories (IDXX) and State Street (STT).
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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
AMD Rides on Robust 7 nm Product Portfolio & Partnerships
Workday (WDAY) Benefits from Strong Demand for HCM Offerings
Buyouts, Diversification Aid Moody's (MCO), High Costs Ails
Strong 5G Portfolio to Drive Ericsson (ERIC) Amid Competition
Per the Zacks analyst, Ericsson should continue to gain from 5G deployments with operators, backed by R&D investments to boost its growth portfolio.
IDEXX (IDXX) Rides on Strong Sales in CAG Arm Amid Pandemic
The Zacks analyst is upbeat about the robust performance of IDEXX's CAG business despite the pandemic-led business challenges.
Servicing Wins Aid State Street (STT) Amid Near-Zero Rates
Per the Zacks analyst, business servicing wins, and global footprint will continue to aid State Street amid lower interest rates.
Expansion Plans Aids Edison International (EIX), Costs Hurt
Per the Zacks analyst, focus on infrastructural development programs will boost the top line.
Residential Users, Spread Out Assets Aid FirstEnergy (FE)
The Zacks analyst believes FirstEnergy's residential users boost earnings as 65% of its distribution revenues come from them.
Development Efforts to Aid Vornado (VNO), Overdue Rent a Woe
Per the Zacks analyst, opportunistic developments and portfolio-repositioning initiatives will drive Vornado's long-term growth.
Growing Top-line Aid Owl Rock (ORCC), Elevated Expenses Hurt
Per the Zacks analyst, its rising revenues driven by high interest income has led to significant growth. However, escalating expenses continues to bother the company.
Elevated Expenses Likely to Mar Palo Alto's (PANW) Margins
Per the Zacks analyst, increased investment toward enhancing sales & marketing capabilities and higher sales incentives are likely to dampen Palo Alto's margins.
Spirit (SAVE) Hurt by Coronavirus-Led Weak Air-Travel Demand
The Zacks analyst is concerned about coronavirus-induced suppressed air-travel demand weighing significantly on the carrier's passenger revenues (down 51.7% year over year in the first half of 2020).
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Workday, Inc. (WDAY) : Free Stock Analysis Report
State Street Corporation (STT) : Free Stock Analysis Report
Moodys Corporation (MCO) : Free Stock Analysis Report
IDEXX Laboratories, Inc. (IDXX) : Free Stock Analysis Report
Ericsson (ERIC) : Free Stock Analysis Report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
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