Today's Must Read
Digital Transformation, AI Proliferation Aid Infosys (INFY)
Strong AUM Growth Supports Blackstone (BX), Huge Debt Hurts
Wednesday, December 9, 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 Broadcom Inc. (AVGO), Infosys Limited (INFY) and The Blackstone Group Inc. (BX). 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 >>>
Broadcom shares have underperformed the Zacks Electronics - Semiconductors industry in the year to date period (+34.0% vs. +54.5%). The Zacks analyst believes that anticipated sluggishness in enterprise demand might impact the company’s server storage revenues. Moreover, efforts to reduce channel inventory amid COVID-19 crisis-induced market uncertainty and increasing lead times, is likely to weigh on industrial revenues.
However, Broadcom is poised to benefit from robust adoption of Wi-Fi 6 in access gateway, and cable DOCSIS 3.1 products. Acceleration in 5G deployment, significant production ramp up and increase in radio frequency (RF) content favors prospects. Further, synergies from acquisitions of CA and Symantec’s enterprise security business are anticipated to bolster the company’s presence in the infrastructure software vertical.
Infosys shares have outperformed the Zacks Computers - IT Services industry in the year to date period (+55.1% vs. +40.0%). The Zacks analyst believes that Infosys is gaining from large deal wins and fast-growing digital services. The company’s sustained focus on Agile Digital and artificial intelligence (AI) -driven Core services is a tailwind. Strong demand for its services in cloud, Internet of Things (IoT), cyber security, data and analytics is a key driver. Higher investments by clients in digital transformation, AI and automation are an upside.
However, Infosys is suffering from increasing anti-outsourcing sentiments in certain countries. Higher subcontractor costs and the company’s compensation revision with a higher variable pay and incentives are weighing on margins.
Shares of Blackstone have gained +11.6% in the year to date period against the Zacks Financial - Investment Management industry’s increase of +16.4%. The Zacks analyst believes that continuously increasing expenses (mainly owing to higher general and administrative costs) are expected to hamper the bottom line to some extent in the near term. Additionally, lower chances of sustainability of the company’s capital deployment activities due to volatile earnings are a major concern.
However, the company remains well-positioned to benefit from its fund-raising ability, revenue mix, persistent asset inflows and inorganic growth initiatives. Moreover, its transition from a publicly traded partnership to a corporation is expected to help attract more investors.
Other noteworthy reports we are featuring today include Equifax Inc. (EFX) and CenterPoint Energy, Inc. (CNP).
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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>>>