Today's Must Read
Oracle (ORCL) Gains from Cloud Suite Adoption & Partnerships
Chevron (CVX) Boosts Permian Position with Noble Buy
Tuesday, December 15, 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 Coca-Cola (KO), Oracle (ORCL) and Chevron (CVX). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Coca-Cola shares have underperformed the Zacks Soft Drinks Beverages industry in the year to date period (-2.8% vs. +0.3%). The Zacks analyst believes that Coca-Cola has been witnessing a surge in e-commerce with the growth rate of the channel doubling in many countries due to a shift in consumer behavior due to the coronavirus pandemic.
The company’s third-quarter revenues and volume reflected improved trends from the second quarter. It is poised to gain from the streamlining of portfolio and accelerating investments to expand digital presence due to shift in consumer preference.
However, continued pressures in the away-from-home channel, which account for nearly half of its revenues, hurt revenue growth. It also lost global value share in NARTD beverages on negative channel mix.
Shares of Oracle have gained +13.5% over the past year against the Zacks Computer Software industry’s gain of +31.3%. The Zacks analyst believes that Oracle is benefiting from upbeat cloud business on solid adoption of data cloud solutions, ERP and Autonomous Database offerings.
Strong uptake of cloud-based solutions, comprising NetSuite ERP, Fusion ERP and Fusion HCM, aided revenue growth. Also, companies like MercadoLibre, Xactly, 8x8 and Zoom Video have selected Oracle Cloud Infrastructure services to address business needs, which is a testament to the strength of its cloud offerings.
Solid demand for the Oracle Dedicated Region Cloud@Customer supported by ML is anticipated to drive the top line. However, rise in spend on product enhancements amid stiff competition in the cloud market is likely to limit margin expansion.
Chevron’s shares have lost -5.3% over the past six months against the Zacks Integrated Oil industry’s fall of -2.4%. The Zacks analyst believes that Chevron is not immune to commodity price crash, forcing it to cut capital spending and suspend buybacks. The company’s high oil price sensitivity is a concern too.
Moreover, the supermajor’s reserve replacement ratio of 44% is indicative of its inability to add proved reserves to replace the amount of oil and gas produced. However, the company not only eked out a Q3 profit, it vowed to keep its dividend and reported impressive U.S. production growth thanks to strength in the Permian Basin.
Chevron’s Noble Energy takeover has expanded its footprint in the DJ Basin and the Permian Basin along with the addition of cash-generating offshore assets in Israel.
Other noteworthy reports we are featuring today include Adobe (ADBE), Boeing (BA) and 3M Company (MMM).
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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>>>