Today's Must Read
Surge in Online Orders & AWS Momentum Benefit Amazon (AMZN)
Chevron (CVX) to Boost Permian Position with Noble Buy
Monday, September 21, 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 Apple (AAPL), Amazon.com (AMZN) and Chevron (CVX). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Apple shares have lost ground lately, but this comes after a phenomenal run this year with thge stock still up +45.5% vs. +3% for the S&P 500 index and +18.5% for the Zacks Tech sector. Driving this outperformance has been the company's strong gains on the services side, a trend that the Zacks analyst believes will only accelerate in the coming periods.
Moreover, Apple devices also continued to gain traction among enterprises, particularly healthcare providers. Although Apple didn’t provide any guidance due to uncertainties triggered by the coronavirus pandemic, it expects fiscal fourth-quarter iPhone sales to benefit from strong demand for iPhone SE.
Further, Apple stated that sale of new iPhones will begin a few weeks later against the usual late September. It also expects iPad and Mac to post strong year-over-year growth. Further, Apple Watch and AirPod are other notable drivers in the long haul. However, increasing scrutiny and legal woes over App Store is a headwind.
Amazon has been a big beneficiary of the pandemic and its impact of business and our lives. Not only have trends on the online sales side been accelerated in a major way, but the outlook for the company's cloud unit has also improved significantly as a result. No doubt the stock is up +65.6% over the past year against the S&P 500’s rise of +11.4% gain.
The Zacks analyst believes that strong adoption rate of AWS is aiding the company’s cloud dominance. Moreover, expanding AWS portfolio is contributing well. Additionally, improving Alexa skills and features are positives.
Amazon has been benefiting from the coronavirus-led spike in online orders. Further, solid growth in its online stores sales is driving the top-line growth. Moreover, surge in online grocery shopping is a major positive. Additionally, solid Prime momentum owing to ultrafast delivery services and expanding content portfolio remains a tailwind.
Also, expanding smart home products offerings are tailwinds. However, accelerating coronavirus related expenses might hurt the company’s profitability in the near term. Also, foreign exchange headwinds and rising cloud competition are concerns.
Chevron shares have gained +44.2% over the past six months against the Zacks Integrated Oil industry’s rise of +16.8%. The Zacks analyst expects Chevron’s proposed Noble Energy takeover deal to expand its footprint in the DJ Basin and the Permian Basin along with cash-generating offshore assets in Israel.
While the company reported a big Q2 loss, it vowed to keep its dividend and reported impressive U.S. production growth thanks to strength in the Permian Basin. However, Chevron is not immune to commodity price crash, forcing it to cut capex and suspend buybacks.
The company’s high oil price sensitivity is another concern. Moreover, the supermajor’s reserve replacement ratio of 44% is indicative of its inability to add proved reserves to its reserve base to the amount of oil and gas produced.
Other noteworthy reports we are featuring today include AstraZeneca (AZN), QUALCOMM (QCOM) and TOTAL (TOT).
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
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>>>