Tuesday, January 9, 2024

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 Meta Platforms, Inc. (META), Broadcom Inc. (AVGO) and Verizon Communications Inc. (VZ). 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 >>>

Meta Platform shares have outperformed the Zacks Internet - Software industry over the past six months (+19.7% vs. +9.7%). The company is benefiting from steady user growth across all regions, particularly Asia Pacific. Increased engagement for its offerings like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver.

Meta Platform is leveraging AI to recommend Reels content, which is driving traffic on Instagram and Facebook. Its innovative portfolio, which includes Threads, Reels and Llama 2, is likely to aid prospects. Advertising revenues are expected to witness a CAGR of 13% per our model estimate.

However, challenging macroeconomic conditions remain a headwind for Meta’s advertising revenues, along with targeting and measurement headwinds due to Apple’s iOS changes. Slow monetization of Reels, along with mounting operating losses at Reality Labs, are concerns.

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

Shares of Broadcom have outperformed the Zacks Electronics - Semiconductors industry over the past year (+86.1% vs. +77.2%). The company is benefiting from the strong deployment of generative AI which it expects to contribute more than 25% of semiconductor revenues in fiscal 2024. VMware is expected to contribute $12 billion to revenues. 

Infrastructure software revenues are expected to be $20 billion while semiconductor solutions revenues are expected to increase in the mid to high-single-digit percentage range on a year-over-year basis in fiscal 2024. Broadcom expects networking revenues to grow nearly 30% year over year in fiscal 2024 driven by accelerating deployment of networking connectivity and expansion of AI accelerators in hyperscalers.

Wireless revenues are expected to remain stable on a year-over-year basis. However, server storage, broadband, and industrial revenues are expected to decline in fiscal 2024.

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

Verizon shares have outperformed the Zacks Wireless National industry over the past year (+2.7% vs. +2.1%). The company is witnessing significant 5G adoption and fixed wireless broadband momentum. It is offering various mix and match pricing in both wireless and home broadband plans which has led to solid client additions.

Initiative to change its revenue mix toward emerging growth services like cloud, security and professional services will likely reap long-term benefits. Its mmWave footprint delivers game-changing experiences for the densest parts of the network and offers highly predictable signal waves leading to greater efficiency and less interference for customers.

However, lower wireline and wireless equipment revenues are major concerns. In the third quarter of 2023, Verizon registered 78,000 Fios Video net losses, reflecting the ongoing shift from traditional linear video to over-the-top offerings. Macroeconomic challenges are impeding the top line.

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

Other noteworthy reports we are featuring today include Sanofi (SNY), Starbucks Corporation (SBUX) and MercadoLibre, Inc. (MELI).

Director of Research

Sheraz Mian

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>>>