Top Research Reports for Microsoft, Facebook & Bank of America

Wednesday, June 12, 2019

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 (MSFT), Facebook (FB) and Bank of America (BAC).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 >>>

Microsoft’s shares have gained +31% in the past year, outperforming the S&P 500’s’ gain of +2.7% during the same period. The Zacks analyst thinks Microsoft is benefiting from growing user base of its different applications like Office 365 commercial, Dynamics, Outlook mobile and Teams.

Moreover, Azure’s expanding customer base is a key catalyst. Microsoft’s gaming segment is performing well, primarily driven by a combination of Xbox Live, Game Pass subscriptions and Mixer, which are driving user engagement. Acquisitions like PlayFab and GitHub expand Microsoft’s total addressable market (TAM) and penetration.

Additionally, its expanding partner base is notable. However, projections of a moderating growth rate in commercial cloud gross margin, and OEM Pro and Windows commercial businesses is a headwind. Moreover, stiff competition from the likes of Google, Apple, Sony and Nintendo remains a headwind.

(You can read the full research report on Microsoft here >>>).

Shares of Facebook have gained +35.9% year to date, outperforming the S&P 500’s increase of +14% during the same period. The Zacks analyst thinks Facebook is benefiting from solid mobile ad revenues, driven by impressive growth in both Instagram Stories and Feed, and Facebook News Feed.

Although the company’s focus on security is expected to affect some advertisers’ ability to run legitimate ads on the platform, Stories are increasingly becoming an important growth opportunity for advertisers. Interactive Stories Ads on Instagram are likely to improve interaction among people, businesses and advertisers.

The Checkout feature on Instagram is part of Facebook’s e-commerce endeavors. However, a persistent mix shift toward Stories is anticipated to hurt ARPU. Rising regulatory headwinds are also a cause for concern.

(You can read the full research report on Facebook here >>>).

Bank of America’s shares have outperformed the Zacks Major Regional Banks in the past six months, gaining +15.7% vs. +9.1%. The company's earnings have surpassed expectations in each of the trailing four quarters. The Zacks analyst thinks efforts to expand into new markets and digital offerings will likely enhance cross selling opportunities.

Also, a rise in loan balances, higher interest rates and efforts to control expenses will likely support profits. The bank's steady capital deployment actions reflect strong balance sheet position and will enhance shareholder value.

However, dismal performance of capital markets amid tough operation backdrop has been hurting the bank’s investment banking and trading operations, which in turn will hurt revenue growth. Litigation issues related to its business misconduct in the pre-crisis period will likely result in higher legal costs.

(You can read the full research report on Bank of America here >>>).

Other noteworthy reports we are featuring today include American Express (AXP), Southern Company (SO) and Deere (DE).

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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 Aids Microsoft (MSFT)

Expanding User Base, Instagram Strength Aids Facebook (FB)

Branch Expansion, Loans to Aid BofA (BAC) Amid Trading Slump

Featured Reports

Solid Balance Sheet, Growing Revenues Aid American Express (AXP)

Per the Zacks analyst, revenue rise from business growth in new verticals, shift toward digital, increase in consumer spending, is impressive.

Southern Company (SO) Rides on AGL Buyout Amid Project Woes

The buyout of AGL Resources has boosted Southern Company's customer base and prospects.

Construction Demand, Wirtgen Acquisition Aid Deere (DE), Costs Ail

Per the Zacks analyst, improving construction markets and the Wirtgen acquisition which enhances Deere's exposure to global transportation infrastructure will drive growth despite inflated costs.

Marriott (MAR) Banks on Expansion Plans to Drive Growth

The Zacks analyst believes that Marriott's efforts to expand its presence worldwide and capitalize on the demand for hotels in international markets will continue to drive growth.

Investments to Aid Sempra Energy (SRE), Poor Ratings Ail

Per the Zacks analyst, investments in infrastructure development projects should boost Sempra Energy.

Baker Hughes (BHGE) Banks on $3B Oilfield Service Orders

While the Zacks analyst appreciates Baker Hughes' $3 billion of oilfield service orders, conservative capital spending of U.S. explorers will hurt the company's businesses.

Strong Design Wins Aid Ambarella (AMBA) Amid Trade Concerns

Per the Zacks analyst, strong design activity in the company's core automotive and security camera markets is a key catalyst.

New Upgrades

Solid Prospects in Population Health Arm Aid Cerner (CERN)

Cerner has been gaining consistently from its Population Health platform. The Zacks analyst is also optimistic about strong prospects in the electronic health record domain.

FDA Approval for Sunosi to Boost Jazz's (JAZZ) Sleep Franchise

Per the Zacks analyst, the FDA???s approval for Sunosi is likely to boost Jazz's sleep franchise which continues to perform well on the back of strong demand for Xyrem.n

Hertz Global (HTZ) Buoyed by U.S. Rental Car Segment

The Zacks analyst is appreciative of performance of the company's U.S. Rental Car division. Efforts to revive its fortunes through the turnaround plan are also impressive.

New Downgrades

Higher Expenses to Weigh on Nordstrom's (JWN) Margins

Per the Zacks analyst, Nordstrom has been making investments related to occupancy, technology, supply chain and marketing. These have resulted in increased costs, thus weighing on its margins.

Elevated Expenses Hurt Commerce Bancshares (CBSH) Profits

Per the Zacks analyst, increasing costs due to continued rise in salaries and employee benefits are likely to hurt Commerce Bancshares' bottom line. Exposure toward risky loans also remains a concern.

High Costs & Debts, Forex Woes Ails Altra Industrial (AIMC)

Per the Zacks analyst, Altra Industrial faces risks from high costs related to inflation in commodity prices, tariffs, logistics and freight. High debt and forex woes are other concerns.


Southern Company (The) (SO): Free Stock Analysis Report

Microsoft Corporation (MSFT): Free Stock Analysis Report

Facebook, Inc. (FB): Free Stock Analysis Report

Deere & Company (DE): Free Stock Analysis Report

Bank of America Corporation (BAC): Free Stock Analysis Report

American Express Company (AXP): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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