Today's Must Read
Disney+ Drives Disney (DIS) Amid Coronavirus-Led Disruption
PepsiCo (PEP) Snacking Business Remains Robust Amid Pandemic
Monday, August 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 Tesla (TSLA), The Walt Disney Company (DIS) and PepsiCo (PEP). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Tesla shares have literally been on fire lately, witth the stock up mroe than +90% over the last six months. The Zacks analyst believes that this momentum can continue on the back of robust Model 3 demand, ramp up of Model Y production, significant Shanghai Gigafactory progress, amazing line-up of upcoming products and aggressive expansion efforts.
The red hot EV maker recently posted the fourth consecutive quarterly profit, which qualifies it for inclusion in the S&P 500 list. Tesla has a first-mover advantage in the EV space with high range vehicles, superior technology, and software edge.
However, high R&D, SG&A costs and massive capex may clip the margins. Tesla is investing heavily to increase production capacity, boost sales and construct Gigafactories, which are likely to strain its near-term prospects. Waning margins for Model S/X is another concern.
Shares of Disney have lost -9.8% in the year to date period against the Zacks Media Conglomerates industry’s fall of -10.3%. The Zacks analyst believes that Disney benefits from the growing popularity of Disney+, owing to a strong content portfolio and a cheaper bundle offering despite stiff competition.
Disney reported disappointing third-quarter fiscal 2020 results as its businesses were adversely affected by the coronavirus outbreak. The company’s domestic parks and resorts, cruise-line business, and Disneyland Paris were closed in the reported quarter.
Shanghai Disney Resort re-opened in May and Hong Kong Disneyland Resort, despite reopening in late June, was closed again in July. The pandemic affected Disney’s third-quarter segmental operating income by $3.5 billion. Upcoming launches in the Nordics, Belgium, Luxembourg, Portugal and Latin America are expected to rapidly expand subscriber base.
PepsiCo shares have gained +1.5% over the past three months against the Zacks Soft Drinks Beverages industry’s rise of +6.1%. The Zacks analyst believes that the company has gained from its strong portfolio of brands, a responsive supply chain and flexible go-to-market systems, which helped maintain continued supplies amid the coronavirus pandemic.
The company’s top and bottom line surpassed the Zacks Consensus Estimate for the sixth straight quarter in second-quarter 2020. Despite the coronavirus outbreak, results gained from resilience in the global snacks and foods business.
Lifting of restrictions and the gradual easing of challenges as the quarter progressed also aided results by improving business performance and channel mix. However, declines in the beverage category hurt volumes and top line growth in the second quarter. Also, adverse currency rates and higher operating expenses remain headwinds.
Other noteworthy reports we are featuring today include Caterpillar (CAT), Zoetis (ZTS) and Charles Schwab (SCHW).
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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>>>