Wednesday, July 22, 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 Home Depot (HD), PayPal (PYPL) and Cisco Systems (CSCO). 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 >>>

Home Depot’s shares have underperformed the Zacks Retail Building Products industry over the past year (+24.2% vs. +27.3%). The Zacks analyst believes that Home Depot’s interconnected retail strategy and underlying technology infrastructure have been more relevant amid the coronavirus crisis, delivering record web traffic for weeks without disruption. 

In the first quarter of 2020, the company’s top line benefited from strong interconnected presence, which helped adapt to changing customer preference during the pandemic in late March. The company quickly adapted to consumer needs providing contactless curbside pickup and other fulfillment services, adhering to the safety protocols.

This helped boost comps performance across stores. However, the bottom-line results reflected the impacts of higher costs to steer through the environment, particularly enhanced benefits to associates. Moreover, the company suspended its previously outlined guidance for fiscal 2020, citing the unprecedented impacts of the pandemic.

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

Shares of PayPal have gained +50.3% over the past six months against the Zacks Internet Software industry’s rise of +39.5%. The Zacks analyst believes that PayPal’s portfolio strength remains its key catalyst. Venmo’s improving monetization efforts and rising adoption rate across various platforms are aiding the total active accounts.

Further, robust mobile checkout services of One Touch are contributing to the company’s total payment volume growth. Furthermore, growing momentum of PayPal’s core peer to peer and merchant services is aiding in acceleration of payment volume. Additionally, improving trend in the company’s activation rate is a positive.

Also, benefits from Honey buyout are tailwinds. The stock has outperformed the industry on a year-to-date basis. Further, increasing credit loss reserves owing to macroeconomic projections on account of coronavirus is a serious matter of concern.

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

Cisco’s shares have gained +12.5% over the past three months against the Zacks Computer Networking industry’s rise of +13%. The Zacks analyst believes that Cisco is well poised to benefit from robust demand for identity and access, advanced threat as well as unified threat management security solutions fuelled by coronavirus crisis-induced high growth in Internet traffic.

Moreover, solid uptake of Webex video conferencing and business productivity offerings on account of COVID-19 induced work-from-home demand environment is noteworthy. Additionally, strong growth in Meraki, and strength across WiFi 6 products and Catalyst 9000 family of switches are positives.

However, weak demand for servers and HyperFlex solutions is a woe. Moreover, sluggishness in the commercial, service provider and enterprise end markets and coronavirus crisis-induced supply chain constraints are likely to put pressure on the top line.

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

Other noteworthy reports we are featuring today include Alibaba (BABA) and CME Group (CME).

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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 Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>