Today's Must Read
Intel (INTC) Banks on Portfolio Strength Amid 7 nm Delay
Cisco (CSCO) Gains From Demand for Security Products & Webex
Tuesday, January 26, 2021
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including Walmart (WMT), Intel (INTC) and Cisco Systems (CSCO). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Walmart shares have outperformed the Zacks Supermarkets industry over the past year (+25.3% vs. +25%) on the back of rising demand for grocery and general merchandise amid the pandemic.
Stay-at-home trends are also boosting e-commerce sales, which soared 79% in the U.S. segment in third-quarter fiscal 2021. During the quarter, the top and bottom lines beat the estimates and grew year over year, with U.S. comp sales rising for the 25th straight time. Comps were fueled by strength in core categories and higher shift toward e-commerce.
Clearly, Walmart’s efforts to enhance deliveries are yielding results. Also, the company is focused on improving the International unit’s performance, evident from its recent plans to sell certain businesses. However, the company is seeing high COVID-19 costs, which are likely to prevail. Also, price investments are hurting gross margin to an extent.
Shares of Intel have gained +12.1% in the last six months against the Zacks General Semiconductor industry’s gain of +27.2%. The Zacks analyst believes that sluggish data center demand across cloud service providers, enterprise and government end-markets is likely to weigh on the top-line performance, at least in the near term.
Declining ASPs and weakness in IOT end-markets remain headwinds. Also, production delays pertaining to 7 nm ramp up remain concerns. Nevertheless, Intel is poised to gain from increasing demand for its 10 nanometer SuperFin process-based 11th Gen core processors.
Moreover, Mobileye growth is projected to be driven by design win momentum and stabilizing automotive industry through 2021.
Cisco shares have gained +19.2% over the past three months against the Zacks Computer Networking industry’s rise of +19.4%. The Zacks analyst believes that Cisco is benefitting from robust adoption of identity and access, advanced threat and unified threat management security solutions amid high growth in Internet traffic.
Ongoing momentum in Webex video conferencing and business productivity offerings on account of COVID-19 induced work-from-home demand environment remains noteworthy. Also, strong demand for Catalyst 9000 family of switches aided growth. Moreover, the company provided encouraging guidance for the fiscal second quarter of 2021.
Nonetheless, weakness in the commercial, service provider and enterprise end markets and coronavirus crisis-led supply chain constraints is likely to weigh on revenues. Further, weak demand for servers, and sluggish enterprise IT spending, remain added concerns.
Other noteworthy reports we are featuring today include Union Pacific (UNP), Edwards Lifesciences (EW) and Nokia (NOK).
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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>>>