Top Stock Reports for Walmart, Cisco, Intel & UPS

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Wednesday, February 21, 2018

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 17 major stocks, including Walmart (WMT), Cisco (CSCO), Intel (INTC) and 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 >>>

Buy-rated Walmart 's shares have been strong performers lately, with the stock up +17.6% over the last six months, outperforming the S&P 500's +10.9% gain in the same time period. Walmart, which recently emerged as an omni-channel retailer officially, has been riding on constant growth efforts - both in stores and online.

The company's robust e-commerce initiatives, like buyouts, alliances, online grocery and improved delivery systems have been working well. These trends helped Walmart post its 14th straight quarter of U.S. comps growth in fourth-quarter fiscal 2018, wherein earnings and sales rose year over year.

However, gross margin remained strained owing to mix impact from growing e-commerce operations, price investments and higher markdowns. Also, the rate of e-commerce growth slowed down sequentially.

Nevertheless, management expects U.S. e-commerce sales to jump nearly 40% in fiscal 2019, which should help the company revert to its track of surpassing the industry. The Zacks analyst expects these factors and projected gains from tax reforms to fuel the bottom line.

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

Shares of Buy-rated Cisco have outperformed the Zacks Networking industry over the past year, gaining +29.3% vs. +27.3%. Cisco reported impressive second-quarter fiscal 2018 results. Both earnings and revenues increased on a year-over-year basis. The growth was driven by strong contribution from acquisitions, security, Infrastructure Platforms and applications.

The Zacks analyst thinks the company's expanding footprint in the rapidly growing security market presents a significant growth opportunity. Additionally, partnerships with Telenor, Apple, IBM, Microsoft, Google Cloud, Viacom and Alibaba and aggressive share buybacks are other positives. However, weakness in the switching and routing is a headwind.

Moreover, ongoing transition to subscription-based model will continue to hurt the top line. Further, weakness in the service provider business segment and intense competition from the likes of Huawei, Juniper and Arista Networks are other major concerns.

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

Buy-rated Intel 's shares have underperformed the Zacks General Semiconductor industry over the past one year, gaining +28.5% vs. +53.3%. However, Intel reported stellar fourth-quarter results and provided an encouraging guidance. The company is benefiting from robust performance of the DCG, IoT Group, NSG and PSG. These segments form the crux of Intel's data-centric business model.

Further, the launch of FPGA SDK for OpenCL solution, Xeon Scalable, Core 8 chips, Myriad X and next-generation desktop processors are key catalysts. Lately, Intel's Movidius vision processing has gained strong adoption. The processor was selected by Alphabet's Google division and's DeepLens. Intel also announced level through five autonomous driving platform based on EyeQ5 and Atom, which will sample over the next few months.

Its partnerships with BMW, Nissan, Volkswagen AG and Ferrari will boost sales of processing chips, sensor-chips, cloud software and many more, which will drive top-line growth. However, stiff competition from peers adds to its woes.

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

Shares of Buy-rated UPS have underperformed the Zacks Air Freight and Cargo industry as well as rival FedEx in a year's time. While UPS has lost -0.9%, the industry it belongs to and FedEx have rallied +8.7% and +24.3%, respectively. Despite the unimpressive price performance, UPS outperformed in the fourth quarter of 2017.

Also, revenues and earnings per share improved year over year. Results were aided by strong export volumes. Moreover, UPS performed well in the most recent holiday season on the back of e-commerce growth. In February 2018, UPS announced its decision to increase quarterly dividends which is an added positive.

Furthermore, the new tax law (Tax Cuts and Jobs Act), which reduces corporate tax rate significantly, is encouraging. However, high costs continue to limit bottom-line growth. Its forecast for 2018 capex, which is higher than 2017 levels, might push up costs further.

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

Other noteworthy reports we are featuring today include Deere (DE), Glaxo (GSK) and Wynn Resorts (WYNN).

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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 Trendsand Earnings Previewreports. If you want an email notification each time Sheraz publishes a new article, please click here>>>

Today's Must Read

Walmart's (WMT) Superb U.S. Comps Trend to Fuel Top-Line

Accretive Acquisitions, Solid Partner Base Aids Cisco (CSCO)

Intel (INTC) Rides on AI-based Alliances & Product Rollouts

E-Commerce Growth, Dividends & Buybacks Buoy UPS

Featured Reports

Ironwood's (IRWD) Linzess Holds Potential, IBS-C Space Crowded

The Zacks analyst thinks that Linzess holds blockbuster potential with several label expansion under review. However, competition in the IBS-C market is intensifying.

Positive Budget, Order Wins Drive Huntington Ingalls (HII)

Per the Zacks analyst, favorable budget proposal by Trump will boost Huntington Ingalls' shipbuilding business. Also the company benefits from a slew of order inflows from the Pentagon.

NiSource (NI) to Gain from Client Additions, $30B Capex Plans

The Zacks analyst believes NiSource will benefit from customer additions and its long term plans to invest $30 billion to strengthen its existing gas and electric infrastructure.

International Flavors (IFF) Gains From Buyouts, Costs A Drag

Per the Zacks analyst, International Flavors & Fragrances' acquisitions of Fragrance Resources and PowderPure in 2017 will prove advantageous going forward. However, rising costs remain an issue.

Cabot (COG) Thrives on Attractive Marcellus Shale Assets

The Zacks analyst believes that Cabot's large acreage holdings in the fast-growing Marcellus Shale will enable the company to deliver strong production growth.

CNO Financial (CNO) Grows on Washington National Segment

The Zacks analyst believes that, continued strong performance from Washington National segment aids CNO Financial's both top and bottom lines.

Wynn Resorts (WYNN) Grapples With High Debt Burden

The Zacks analyst believes that a high debt burden makes it difficult for Wynn Resorts to finance its upcoming projects.

New Upgrades

Strong Prospects in Radixact Platform Aids Accuray (ARAY)

Accuray rides on the market's solid response to the Radixact platform. The Zacks analyst feels that the platform is generating favorable pricing and margins for the company.

Deere (DE) Buoyed by Wirtgen Buyout & Strong Order Activity

Per the Zacks analyst, Deere's construction business will benefit from Wirtgen buyout. Also, strong order activity in both Combine Early Order Program and large tractors will drive growth.

Strong Data Traffic & Security Solutions Aid Akamai (AKAM)

Per the Zacks analyst, Akamai's strong media division traffic, growing adoption of cloud-based security solutions and robust over-the top (OTT) content viewing will drive the top and bottom line.

New Downgrades

Shopify (SHOP) Hurt by Rising Expenditure, Limited Footprint

Per the Zacks analyst, rising expenditure on product development and infrastructure is affecting Shopify also, lack of significant presence in the Asia-Pacific market continues to be a headwind.

DDR's (DDR) Profitability to Bear the Brunt of Divestitures

Per the Zacks analyst, DDR Corp.'s aggressive asset disposition is anticipated to affect its earnings. Competition from e-commerce platforms remain a concern for the company.

Glaxo's (GSK) Sales Under Pressure, Generics Weigh on Advair

The Zacks analyst thinks generic competition and price erosion are hurting Glaxo's sales. Its top selling drug Advair is expected to face generic competition in the U.S in 2018.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Wynn Resorts, Limited (WYNN): Free Stock Analysis Report

Wal-Mart Stores, Inc. (WMT): Free Stock Analysis Report

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

Intel Corporation (INTC): Free Stock Analysis Report

GlaxoSmithKline PLC (GSK): Free Stock Analysis Report

Deere & Company (DE): Free Stock Analysis Report

Cisco Systems, Inc. (CSCO): 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.

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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