Technology

Top Stock Reports for Amazon, Visa, UPS & Others

Monday, August 3, 2020

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 Amazon.com (AMZN), Visa (V) and United Parcel Service (UPS). 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 >>>

Amazon was  enjoying plenty of sunshine even before the pandemic hit, but the Covid-19 pandmec has truly established the company's status as a bellwether of our times. The pandemic accelerated pre-existing trends that were shifting consumer spending from the mall to the digital space and Amazon has been a big beneficiary of that shift. The company has also been a big beneficiary of the secular transition to cloud computing through its industry-leading Amazon Web Service or AWS business.

All of these positives were on display in the company's blowout Q2 earnings report. No doubt, the stock has handily outperformed the S&P 500 index over the past year (+79.3% vs. +15.4%). 

Moreover, surge in online grocery shopping was a major positive. Additionally, solid Prime momentum owing to ultrafast delivery services and expanding content portfolio remained tailwind. Further, strengthening AWS services and its growing adoption rate contributed well.

Additionally, improving Alexa skills and features remained a major positive. Expanding smart home products offerings were tailwinds. The stock has outperformed its industry on a year-to-date basis. However, accelerating coronavirus related expenses remain major concerns. Also, foreign exchange headwinds and rising cloud competition are risks.

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

Shares of Visa have lost -6.4% over the past six months against the Zacks Internet Software industry’s fall of -7.9%. The Zacks analyst believes that the company is likely to see a slowdown in cross-border business due to the coronavirus outbreak.

However, numerous acquisitions and alliances plus technology upgrades paved the way for long-term growth and consistently drove revenues. Shift in payments to new methods such as mobile, cards, online and via wearables bodes well for the long haul. The acquisition of Visa Europe is a growth strategy as well.

The company’s strong cash position enables effective capital deployment measures for its shareholders. However, high operating expenses suppress operating margins. Ramped-up client initiatives will dent the top line.

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

United Parcel Service’s shares have gained +57.8% over the past three months against the Zacks Transportation - Air Freight and Cargo industry’s rise of +64.4%. The Zacks analyst believes that the increase in e-commerce sales during the coronavirus pandemic is a huge positive for UPS.

UPS delivered better-than-expected revenues as well as earnings per share for second-quarter 2020. Moreover, both the top and the bottom line improved year over year owing to a significant increase in home deliveries amid the prevalent coronavirus pandemic. Demand for residential delivery soared, leading to a 65.2% jump in business-to-consumer shipments.

Notably, the need for door-to-door delivery of essentials during this crisis is rising. Higher cargo revenues are an added positive. Strong adjusted free cash flow generation of $3.9 billion in first-half 2020 was up 77.2% year over year. However, UPS expects U.S. Domestic average daily volume growth to be lower in the second half of 2020 than 22.8% witnessed in the June quarter.

(You can read the full research report on United Parcel Service here >>>)

Other noteworthy reports we are featuring today include American Tower (AMT), Lockheed Martin (LMT) and Colgate-Palmolive (CL).

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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

Surge in Online Orders & AWS Momentum Benefit Amazon (AMZN)

Visa (V) Rides on Acquisitions, Technological Enhancement

E-commerce Aids UPS, Industrial Sector Weakness Affects

Featured Reports

High Demand Aids American Tower (AMT), Carriers Merger Ails

Per the Zacks Analyst, a steady demand at its towers due to the surge in wireless services' usage is aiding American Tower.

Solid Order Growth Aid Lockheed (LMT) Amid Tiff with Turkey

Per the Zacks analyst, steady flow of orders from Pentagon and U.S. allies continues to boost Lockheed's revenue.

Colgate (CL) Organic Sales Cushions Top Line Amid Pandemic

Per the Zacks analyst, Colgate is gaining from strong volume growth, robust pricing and sturdy organic sales.

Southern Company (SO) Buoyed by Regulated Customer Growth

The Zacks analyst believes that increase in Southern's regulated business customer base will support its revenue growth but is concerned over timing and cost overrun related to Vogtle project.

Better Rate, Increased Exposure Aid Chubb (CB), Cat Loss Ail

Per the Zacks analyst, Chubb is set to grow on better rate environment, increasing exposures and market share, solid capital position and cash generation capabilities.

Lam Research (LRCX) Benefits from Memory Segment Growth

The Zacks analyst believes that expanding memory investments, increase in NAND demand related to 5G migration, video, and new game consoles and foundry strength will continue to drive Lam's top line.

Growing Client Base Aids Schwab (SCHW), Falling Margin Ails

Per the Zacks analyst, Schwab's efforts to widen its client base and solid balance sheet position bodes well. However, pressure on margins amid low interest rate environment is a major concern.

New Upgrades

Beacon Roofing (BECN) Benefits From Digitization Initiatives

Per the Zacks analyst, Beacon Roofing is benefitting from consistent enhancement in its digital platform. Also increased focus on cost saving initiatives are adding to the positives.

Loan Demand, Solid Balance Sheet Aid Hilltop Holdings (HTH)

The Zacks analyst believes that decent loan demand, focus on improving fee income and robust balance sheet position are likely to continue supporting Hilltop Holdings amid near-zero interest rates.

Reliable Assets, Free Cash Flow Plan Aid CNX Resources (CNX)

Per the Zacks analyst CNX Resources' Marcellus and Utica shales assets will continue to boost production and its 7 years plan to generate $3 billion free cash flow will help to fortify balance sheet.

New Downgrades

Soft Makeup Trends a Worry for Ulta Beauty's (ULTA) Sales

Ulta Beauty expects makeup category challenges to persist in the near term due to increased social distancing, usage of masks and delayed innovations.

Xerox (XRX) Hurt by Lower Demand for Paper Related Products

The Zacks analyst believes that decreasing demand for paper-related systems and products due to technological advancements is expected to hurt Xerox.

Kirby (KEX) Hurt by Distribution and Services Unit Weakness

The Zacks analyst is concerned about continued weakness in the distribution and services segment due to softness in the oil and gas market. The situation has been worsened by coronavirus woes.


Click to get this free report

Visa Inc. (V): Free Stock Analysis Report

United Parcel Service, Inc. (UPS): Free Stock Analysis Report

Lockheed Martin Corporation (LMT): Free Stock Analysis Report

ColgatePalmolive Company (CL): Free Stock Analysis Report

Amazon.com, Inc. (AMZN): Free Stock Analysis Report

American Tower Corporation REIT (AMT): Free Stock Analysis Report

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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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