Today's Must Read
Coca-Cola (KO) Boosts Digital Investments Amid Coronavirus
Defense & Space to Aid Honeywell (HON) Amid Pandemic Scares
Friday, July 17, 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 Adobe (ADBE), Coca-Cola (KO) and Honeywell International (HON). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Adobe shares have outperformed the Zacks Software industry over the past year (+38% vs. +31.6%), with the Zacks analyst expecting the momentum to continue on the back of the company’s market position, compelling product lines, solid adoption of Creative Cloud and Adobe marketing cloud.
Adobe is benefiting from strong demand for its creative products. Its Creative Cloud, Document Cloud and Adobe Experience Cloud products are driving the top-line growth. Further, rising subscription revenues and solid momentum across the mobile apps are major positives.
Additionally, growth in emerging markets, robust online video creation demand and improving average revenue per user are tailwinds. However, lower end-market demand and exposure to Europe remain overhangs. Further, high acquisition expenses do not bode well for margin expansion.
Shares of Coca-Cola have lost -18.5% over the past six months against the Zacks Soft Drinks Beverages industry’s fall of -13.2%. The Zacks analyst believes that innovation and investment in core categories and brands have been the key focus areas, which led to the expansion of retail value share.
It is gaining from the effective execution of strategies to evolve as a consumer-centric total beverage company. Despite a beat, its top line declined in the first quarter as gains from a strong start to 2020 were offset by disruptions in the latter half of the quarter due to the coronavirus pandemic.
It witnessed a decline in unit case volume, while price/mix and concentrate sales remained flat. The company expects the pandemic to significantly hurt second-quarter results. Also, adverse currency impacts are likely to persist.
Honeywell shares have gained +13.6% over the past three months against the Zacks Diversified Operations industry’s rise of +14.1%. The Zacks analyst believes that strength in defense and space businesses as well as solid demand for its warehouse automation products is likely to boost Honeywell’s revenues in the quarters ahead.
Also, increased productivity and operational excellence initiatives are likely to improve the company’s near-term profitability. Its acquisitions will likely prove beneficial. The company is committed to rewarding shareholders handsomely through share repurchases and dividend payouts.
The company believes that the coronavirus outbreak-led market downturn and the volatile oil market will adversely impact its near-term results. Given its extensive geographic presence, its business is subject to political, economic and geopolitical issues. Rise in debt levels can increase its financial obligations.
Other noteworthy reports we are featuring today include PetroChina (PTR), Starbucks (SBUX) and Fiserv (FISV).
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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>>>