Today's Must Read
P&G's (PG) Productivity & Cost Savings Plan to Aid Margins
Qualcomm (QCOM) Remains Poised to Benefit from 5G Chips
Monday, January 4, 2021
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 Microsoft (MSFT), Procter & Gamble (PG) and QUALCOMM (QCOM). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Microsoft shares have outperformed the S&P 500 over the past year (+39.9% vs. +17.7%). The Zacks analyst believes that Microsoft is benefiting from momentum in Azure, impressive Teams user growth triggered by coronavirus-led digital transformation, work-from-home, online learning wave and tele healthcare trends.
Solid uptake of Surface devices and Xbox Game Pass is expected to boost growth. Further, the company is gaining from a growing user base of its different applications including Microsoft 365 suite, and Dynamics. Additionally, it is well positioned to expand the total addressable market through acquisitions of GitHub and ZeniMax Media.
However, broad-based macroeconomic weakness in the job market and lower spend on advertising due to the coronavirus pandemic are likely to put pressure on LinkedIn and Search revenues. Also, delays in consulting business are anticipated to limit growth.
Shares of Procter & Gamble have gained +14.5% in the last six months against the Zacks Soap and Cleaning Materials industry’s gain of +12.6%. The Zacks analyst believes that the nature of Procter & Gamble’s business led to increased consumer demand for its hand soaps, detergents and surface cleaning products during the pandemic.
The company’s solid first-quarter fiscal 2021 earnings mark the continuation of its earnings surprise trend. Earnings and sales improved year over year in the reported quarter on gains from significant sales increase, related fixed cost leverage and ongoing productivity efforts.
Cost savings aided core currency-neutral gross and operating margin, which expanded 170 bps and 350 bps, respectively. Driven by the robust results, the company raised its outlook for fiscal 2021. However, currency headwinds are likely to affect results in fiscal 2021. Also, stiff competition remains a woe.
QUALCOMM’s shares have gained +27.8% over the past three months against the Zacks Wireless Equipment industry’s rise of +20.1%. The Zacks analyst believes that with the rollout of 5G technology, Qualcomm is benefiting from investments toward building a licensing program in mobile.
The company is focused on retaining its leadership in the 5G chipset market and mobile connectivity. It resolved a dispute with Huawei and inked a new long-term patent license agreement, which augurs well for long-term revenues.
Qualcomm launched low-priced 5G chips for the masses for a seamless transition to 5G while delivering low-power resilient multi-gigabit connectivity. However, lower handset shipments due to the COVID-19 pandemic remain a near-term headwind. Qualcomm is expected to face softness in demand from China.
Other noteworthy reports we are featuring today include T-Mobile US (TMUS), Amgen (AMGN) and Automatic Data Processing (ADP).
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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>>>