Friday, February 15, 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 Alphabet ( GOOGL ), Facebook ( FB ) and Cisco Systems ( CSCO ). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Buy-ranked Alphabet 's shares have outperformed the Zacks Internet Services industry in the last six months (-7.7% vs. -11.2%). Alphabet's fourth-quarter earnings were driven by robust mobile search and YouTube.
However, higher expenses impacted operating margins. The company's strengthening cloud unit and expanding data centers will continue to bolster the company's presence in the cloud space. Also, major updates in its search segment are enhancing the search results which is a tailwind.
Additionally, Google's strong focus on the innovation of its AI techniques and Android OS along with growing presence in the home automation space are driving its top-line growth. Notably, the stock has outperformed the industry it belongs to in the past one year. However, the company's growing litigation issues might hurt its profitability.
Shares ofbuy-ranked Facebook have lost -7.5% over the past year, outperforming the Zacks Internet Services industry's loss of -18.2% during the same period. Facebook is benefiting from solid mobile ad revenues driven by robust performance from both Instagram Stories and Feed. However, only Instagram Stories is expected to be the key catalyst for impression growth in 2019.
Moreover, Facebook needs to improve ad pricing to drive top-line growth. Further, the company's plan to introduce commerce in Instagram is expected to be a major growth driver. Additionally, the company's plan to integrate messaging apps - WhatsApp, Instagram and Messenger - will boost user experience by making the services more secure through end-to-end encryption.
Cisco 's shares have gained 4.4% in the last three months, outperforming the Zacks Computer Networking industry's increase of 4%. Cisco reported stellar second-quarter results. Moreover, both top and bottom-line increased year over year. Strength witnessed in the company's Security and Applications segments drove year-over-year growth. Order strength and improving traction of the subscription-based model were other tailwinds.
Strong contribution from security, Infrastructure Platforms and applications is a positive. Order strength and improving traction of the subscription-based model are other tailwinds. Strengthening collaboration portfolio which now includes Webex Teams and Accompany bodes well. Further, buyout of Duo Security and Luxtera should help the company expand its IT and data center clientele. However, weakness in switching and routing is a headwind.
(You can read the full research report on Cisco here >>> ).
Other noteworthy reports we are featuring today include Home Depot ( HD ), Costco Wholesale ( COST ) and S&P Global ( SPGI ).
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 - 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
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
Although ramped up activities in the prolific Permian Basin support Pioneer Natural's oil production, rising exploration expenses are a concern, per the Zacks analyst.
The Zacks analyst is optimistic about the company's strong passenger revenues, which are driving its top line. However, high unit costs are a drag on its growth.
Per the Zacks analyst, Home Depot's five-year plan to expand delivery options for its customers, should aid top lines.
Per the Zacks analyst, Costco's growth strategies, sturdy comparable sales performance and strong membership trends reinforce its position.
Per the Zacks Analyst, the IBX expansion strategy will fortify Equinix's global footprint in the data-center space.
Per the Zacks analyst, solid traction of Nordson's Adhesive Dispensing Systems business, fueled by organic growth and acquisition like Clada Medical Devices, should continue to drive its revenues.
Per the Zacks analyst, Hilton's relentless expansion strategy by year-over-year net unit growth is the major topline driver. However, a competitive industry remains a potential headwind.
Per the Zacks analyst, high demand for customized financing and improving economy will lead to rise in Ares Capital's investment income. Its enhanced capital deployment plans indicate solid liquidity.
Per the Zacks Analyst, solid performance in Real Estate Services and LaSalle segment contribute to Jones Lang's growth. Also, technology investments will provide a competitive edge to the company.
Per the Zacks analyst, successful completion of label expansion studies and potential approval will boost Rubraca sales which is struggling as competition intensifies in the ovarian cancer market.
The Zacks analyst stresses that abnormally wet weather conditions in many markets are jeopardizing Martin Marietta's (MLM) shipments, production and profitability.
Per the Zacks Analyst, a comparative analysis of Leidos Holdings' historical Enterprise Value/Free Cash Flow (EV/FCF) ratio reflects a relatively gloomy picture that might be a cause of concern.
Per the Zacks analyst, weak decline in global debt issuance is weighing on S&P Global's top line. Initial issuance was so strong that it crowded out issuers' capacity to tap re-pricing.
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S&P Global Inc. (SPGI): Free Stock Analysis Report
The Home Depot, Inc. (HD): Free Stock Analysis Report
Alphabet Inc. (GOOGL): Free Stock Analysis Report
Facebook, Inc. (FB): Free Stock Analysis Report
Cisco Systems, Inc. (CSCO): Free Stock Analysis Report
Costco Wholesale Corporation (COST): 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.