Tuesday, May 17, 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 Corporation (MSFT), Micron Technology, Inc. (MU), and UBS Group AG (UBS). 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 Corporation have outperformed the Zacks Computer - Software industry over the past year (+10.2% vs. -2.3%) on the back of 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 which will be minimally dilutive in fiscal 2022 and accretive in fiscal 2023 to non-GAAP earnings.
The Zacks analyst has noted that unfavorable forex hurt earnings by three cents per share while the negative impact from the suspension of all new sales and services in Russia was a penny. Unfavorable forex and Russia-Ukraine conflict is expected to hurt revenues by 2% and $110 million, respectively along with 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 >>>)
Micron Technology shares have declined -6.9% over the past year against the Zacks Semiconductor Memory industry’s decline of -10.3%, as a result of near-term profitability headwinds as a result of planned salary hikesand supply constraints for certain components. Additionally, a higher level of customer inventory in the cloud, graphics, and enterprise market is a key threat.
However, The Zacks analyst believes that Micron is benefiting from growing demand for memory chips from cloud-computing providers and acceleration in 5G (fifth-generation) cellular network adoptions. A rising mix of high-value solutions, enhancement in customer engagement, and improvement in cost structure are growth drivers as well. Further, 5G adoption beyond mobile is likely to spur demand for memory and storage, particularly in the Internet of Things (IoT) devices and wireless infrastructure.
(You can read the full research report on Micron Technology here >>>)
Shares of UBS Group have outperformed the Zacks Banks - Foreign industry over the past year (+14.5% vs. -9.9%). UBS’s first-quarter performance was driven by a rise in net interest income (NII) while higher expenses were ailed. The strong capital position and efficiency initiatives will continue to aid profitability. The company remains focused on opportunistic expansion strategies in various areas by entering into partnerships with other firms. Such inorganic moves will aid long-term growth.
However, The Zacks analyst believes that UBS Group AG’s NII is expected to be persistently affected in the near term by the prevalent negative interest rates in Switzerland. Heightened regulatory supervision, flaring expenses, and unsustainable capital deployment activities are concerning. Nonetheless, UBS Group AG continues undertaking initiatives to digitalize its operations and serve clients better in the long run.
(You can read the full research report on UBS here >>>)
Other noteworthy reports we are featuring today include Thermo Fisher Scientific Inc. (TMO), Illinois Tool Works Inc. (ITW), and Enterprise Products Partners L.P. (EPD).
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
Adoption of Azure & Office 365 Strength Aids Microsoft (MSFT)
Micron (MU) Benefits from Growing Memory-Chip Demand
Inorganic Expansion Supports UBS Group AG's (UBS) Financials
Global Business Aids Thermo Fisher (TMO) Amid Forex Woes
The Zacks analyst is impressed with Thermo Fisher's strong international operations and consistent growth in the emerging markets. Yet, adverse currency movement continues to pose concerns.
Food Equipment Unit Aids Illinois Tool (ITW), High Cost Ail
Per the Zacks analyst, solid momentum in Illinois Tool's Food Equipment unit, led by strength in the restaurant and food service markets, should drive its revenues. High operating Costs remain a woe.
Marathon (MPC) to Gain from Sale of Speedway Retail Unit
The Zacks analyst likes Marathon's sale of Speedway business and the resulting cash infusion but is worried over the execution risk associated with its foray into renewable diesel activities.
Cost Management & Regulated investment Aid Exelon (EXC)
Per the Zacks analyst Exelon's cost management initiatives will have positive impact on margins and its planned $29B investments through 2025 will strengthen its operation.
Hilton (HLT) Banks on Unit Expansion Efforts, RevPAR Dismal
Per the Zacks analyst, Hilton is likely to benefit from its solid development pipeline and hotel conversion opportunities. However, lag in RevPAR from pre-pandemic levels is a concern.
Upbeat Air-Travel Demand, High Liquidity Aid Southwest (LUV)
Improved air-travel demand, particularly on the domestic front, is driving Southwest Airlines' top line. The carrier's liquidity position is encouraging as well.
Improving Commissions and Fees Aid Willis Towers (WTW)
Per the Zacks analyst, Willis Towers is set to grow on higher commissions & fees, new business growth, operational efficiencies, investment in growth avenues. Yet, high costs weighing on margin ail.
Enterprise (EPD) Banks On Its $4.6B Key Midstream Projects
Per the Zacks analyst, Enterprise will generate additional fee-based revenues from its $4.6-billion key midstream projects under construction.
Sysco (SYY) to Keep Gaining From Recipe for Growth Program
Per the Zacks analyst, Sysco's Recipe for Growth has been aiding. This includes enhancing customers' experience via digital tools; improving supply chain and having team-based selling among others.
Sohu (SOHU) Aims to Spur Growth Through Online Video Focus
Per the Zacks analyst, Sohu is likely to benefit from improved content development and short-form video program categories as it continues to invest heavily in online video to spur long-term growth.
Huge Debt Pile & Cost Woes Weigh on Tenneco (TEN)
The Zacks analyst is worried of the escalating commodity and SG&A expenses, which are hurting Tenneco's bottom line. Elevated leverage of 93% also raises concern.
Supply Chain Disruptions & Higher Costs to Hurt Dolby (DLB)
Per the Zacks analyst, pandemic induced supply chain troubles and inflationary pressure is a major concern for Dolby. Higher product costs and licensing expenses are other headwinds.
Falling Fee Income, High Debt Ail New York Community (NYCB)
Per the Zacks Analyst, New York Community's declining non-interest income might hinder revenue growth, while limited liquidity and high debt levels make capital deployment activities unsustainable.
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Illinois Tool Works Inc. (ITW) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Enterprise Products Partners L.P. (EPD) : Free Stock Analysis Report
UBS Group AG (UBS) : Free Stock Analysis Report
Micron Technology, Inc. (MU) : Free Stock Analysis Report
Thermo Fisher Scientific Inc. (TMO) : Free Stock Analysis Report
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