Wednesday, October 14, 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 Netflix, Inc. (NFLX), PayPal Holdings, Inc. (PYPL) and International Business Machines Corporation (IBM). 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 >>>
Netflix shares have outperformed the Zacks Broadcast Radio and Television industry in the year to date period (+71.2% vs. +23.8%). The Zacks analyst believes that Netflix is dominating the streaming space, courtesy of its diversified content portfolio, which is attributable to heavy investments in the production and distribution of localized, foreign-language content. Additionally, launch of low-priced mobile plans in India, Indonesia, Malaysia, Philippines and Thailand is also expected to expand Netflix’s subscriber base in the Asia Pacific.
However, Netflix expects subscriber growth to decline in the second half of 2020 due to less demand. Absence of new seasons of popular shows like Money Heist and Stranger Things is likely to affect subscriber growth.
(You can read the full research report on Netflix here >>>)
PayPal shares have gained +100.5% over the past one-year period against the Zacks Internet - Software industry’s rise of +89.6%. The Zacks analyst believes that PayPal is benefiting from robust growth in total payments volume owing to increasing net new active accounts. Further, strengthening customer engagement on the company’s platform is a major positive. Furthermore, Venmo’s improving monetization efforts and rising adoption rate across various platforms are aiding the total active accounts.
However, increasing credit loss reserves owing to macroeconomic projections on account of coronavirus is a serious matter of concern. Further, intensifying digital payment competition is a risk.
(You can read the full research report on PayPal here >>>)
Shares of IBM have gained +5.4% over the past six months against the Zacks Computer - Integrated Systems industry’s rise of +6.1%. The Zacks analyst believes that IBM is witnessing solid uptake of cloud-based solutions and digital transformation offerings. Moreover, Red Hat buyout is enabling IBM in enhancing containerized software capabilities and strengthening competitive position in the hybrid cloud market. Improving position in the hosted cloud, security and analytics domains bodes well.
However, stiff competition in the cloud computing market from Amazon Web Services, Microsoft Azure, and Oracle Cloud, and high-debt levels remain woes. Additionally, adoption of cognitive applications and transaction processing platforms in May was affected by coronavirus pandemic, which remains a woe.
(You can read the full research report on IBM here >>>)
Other noteworthy reports we are featuring today include General Electric Company (GE), Canadian Natural Resources Limited (CNQ) and Huntington Ingalls Industries, Inc. (HII).
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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
Robust Content Aids Netflix (NFLX) Amid Stiff Competition
PayPal (PYPL) Benefits From Increasing Total Payment Volume
Robust Adoption of Cloud Solutions Aids IBM Amid High Debt
Emergent's (EBS) M&A Deals to Widen Portfolio Holds Promise
Per the Zacks analyst, Emergent has been pursuing deals and acquisitions to widen its portfolio. The company's collaborations to help partners produce a vaccine against COVID-19 also holds promise.
Solid Backlog to Aid Huntington (HII), Escalating Costs Ail
Per the Zacks analyst, Huntington Ingalls' significant backlog count indicates solid revenue growth prospects.
ZTO Express (ZTO) Rides High on Favorable Parcel Volumes
The Zacks analyst appreciates the strong performance of the company's express delivery services unit, backed by impressive parcel volumes.
Cost Cuts to Aid Allegheny (ATI) Amid Weak Demand
Per the Zacks analyst, Allegheny will gain from its efforts to improve cost structure through cost reduction initiatives. However, sluggish demand in the aerospace market is a concern.
Best Buy's (BBY) Strong Digital Endeavors to Boost Sales
Per the Zacks analyst, Best Buy has been making solid digital efforts including focus on improving the buy online, pickup in store services.
Restructuring & Cost Actions to Aid General Electric (GE)
Per a Zacks analyst, focus on Power, Aviation and Renewable Energy while exiting all other businesses will aid General Electric (GE) going forward.
Diverse Production Mix to Aid Canadian Natural (CNQ)
The Zacks analyst sees Canadian Natural's diverse production mix facilitating long-term value and reducing risk profile but is worried about the company's debt maturities each year out till 2027.
Diversified Business & Cost Actions to Drive Kennametal (KMT)
Per a Zacks analyst, Kennametal (KMT) is well-poised to benefit from its exposure in multiple end markets. Also, its cost actions are likely to help in dealing with the pandemic-related financial burd
Revenue Growth & Cost Management Supports Lazard (LAZ)
Per the Zacks analyst, organic growth backed by strong team of indigenous professionals remains a key strength at Lazard. Moreover, cost management act as a tailwind for the company.
Investment Banking & Strong Capital Levels Aid Evercore (EVR)
Per the Zacks analyst, Evercore's efforts to grow investment banking business bode well and are expected to support revenue growth. Also, steady capital deployment activities remain a positive factor.
Dismal RevPAR & Occupancy Continues to Hurts Hilton (HLT)
Per the Zacks analyst, dismal RevPAR & occupancy owing to the pandemic is likely to hurt the company's results in the coming quarters. Soft leisure demand across the world is hurting the company.
Deferral of Elective Procedures Ail Align Technology (ALGN)
The Zacks analyst worries about Align technology's lower sales due to the pandemic-led business disruptions. The company's overdependence on Invisalign Technology System also raises apprehension.
Catastrophe Losses, Increasing Expenses Hurt Everest Re (RE)
Per the Zacks analyst, Everest Re's exposure to catastrophe losses induces volatility in underwriting profit while increase in expenses has been weighing on margin expansion.
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PayPal Holdings, Inc. (PYPL): Free Stock Analysis Report
Netflix, Inc. (NFLX): Free Stock Analysis Report
International Business Machines Corporation (IBM): Free Stock Analysis Report
Huntington Ingalls Industries, Inc. (HII): Free Stock Analysis Report
General Electric Company (GE): Free Stock Analysis Report
Canadian Natural Resources Limited (CNQ): Free Stock Analysis Report
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Zacks Investment Research
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