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Research Daily

Sheraz Mian

Q4 Earnings Scorecard and Analyst Reports for Sony, Mondelez & Twilio

NVO HCA WDAY MDLZ TWLO

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Thursday, February 4, 2021

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features the Q4 earnings season scorecard and provides details on 16 new research reports on major stocks, including Sony (SNE), Mondelez International (MDLZ) and Twilio (TWLO). 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 >>>

Q4 Earnings Season Scorecard (As of Thursday, February 4th)

The Q4 earnings season has now crossed the halfway mark, with results from 264 S&P 500 members out now. Total earnings for these 264 index members are up +3.9% on +2.5% higher revenues, with 80.7% beating EPS estimates and 78% beating revenue estimates. This is a better showing that we saw from this same group of companies in the first three quarters of 2020.

Looking at Q4 as whole, combining the actual results that have come out with estimates for the still-to-come companies, total Q4 earnings are now expected to above the year-earlier level, up +1.1% from the same period last year on +2.4% higher revenues.

The tone and substance of management guidance and commentary remains positive, which is helping estimates for the current (2021 Q1) and coming quarters to go up. Total 2021 Q1 earnings for the index are now expected to be up +16.2% from the same period last year on +4% higher revenues. This is up from +12.6% at the start of January 2021 and +11.7% in mid-December 2020. For a more detailed look at the Q4 earnings season and expectations for the coming periods, please check out our weekly Earnings Trends report >>> Tech Sector Shows its Enormous Earnings Power

Featured Analyst Reports

Sony shares have outperformed the Zacks Audio Video Production industry over the past year (+57.9% vs. +52%). The Zacks analyst believes that the company’s Game & Network Services unit is benefiting from an increase in game software sales and PlayStation Plus subscriptions. Sony launched its next-generation gaming console, PlayStation 5.

It is concentrating on the premium segment of the branded products market to maximize growth. The company announced changes to the Sony Group’s organizational structure to boost individual businesses. However, the Pictures unit is facing challenges due to theater closings on account of the pandemic.

Escalating cost of goods sold is a persistent concern. Sony suffers from the negative impact of foreign currency movement as it has a strong international presence with majority of revenues coming from emerging markets.

(You can read the full research report on Sony here >>>)

Shares of Mondelez have gained +0.3% in the last six months against the Zacks Food Preparation industry’s gain of +5.7%. The Zacks analyst believes that the company is witnessing economic challenges and headwinds in relation to increased Gum & Candy exposure in some emerging markets.

Incidentally, revenues from emerging markets declined 2.5% year over year in the fourth quarter of 2020. Apart from these, higher raw material costs put pressure on adjusted gross profit margin. Nevertheless, efficient pricing strategies and higher volumes drove organic revenues in the fourth quarter.

Moreover, management provided impressive organic revenue and earnings outlook for 2021. Certainly, Mondelez’s focus on brand building through innovation and lucrative acquisitions couples with cost-saving efforts bodes well.

(You can read the full research report on Mondelez here >>>)

Twilio shares have gained +28% over the past three months against the Zacks Internet Services industry’s rise of +18.4%. The Zacks analyst believes that Twilio is benefiting from strong demand from health care, education and crisis management organizations along with accelerated digital transformation by companies amid coronavirus crisis.

SendGrid acquisition and growing adoption of Twilio Flex are also tailwinds. The company is not only gaining traction from a solid expansion of its existing clientele but is also aided by the first-time deals with the new customers, courtesy of its firm focus on introducing products and the go-to-market sales strategy.

However, intensifying competition in the cloud telecommunications market is inducing pricing pressure for Twilio, which is an overhang on its profitability. Also increased investments in its systems and infrastructure, R&D, go-to-market team and Flex are likely to dent bottom-line.

(You can read the full research report on Twilio here >>>)

Other noteworthy reports we are featuring today include Novo Nordisk (NVO), Workday (WDAY) and HCA Healthcare (HCA).

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

Sheraz Mian

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>>>

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