Today's Must Read
Adobe (ADBE) Rides on Creative Strength; Expenses A Concern
NextEra (NEE) Gains from Renewable Focus, Steady Investment
Monday, February 22, 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 The Walt Disney Company (DIS), Adobe (ADBE) and NextEra Energy (NEE). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Disney shares have been stellar performers lately, benefiting from the growing popularity of Disney+, owing to a strong content portfolio and a cheaper bundle offering as reflected by first-quarter fiscal 2021 results.
Moreover, availability in the Nordics and Latin America will help in further expanding user base. Nevertheless, disruptions caused by the coronavirus outbreak are expected to hurt the top line in the near term. Disneyland parks and cruise line business remained closed in the fiscal first quarter.
Disney estimates that the coronavirus pandemic has hurt segmental operating income by $2.6 billion. Theatrical distribution was hampered as theaters remained closed. Moreover, a leveraged balance sheet remains a headwind.
Shares of Adobe have lost -1.7% in the last six months against the Zacks Software industry’s gain of +11.4%. This recent underperformance notwithstanding, the Zacks analyst is optimistic about the company's long-term prospects and sees strong demand for its creative products.
The company’s Creative Cloud, Document Cloud and Adobe Experience Cloud products are driving the top-line growth. Further, rising subscription revenues and solid momentum across the mobile apps are major positives.
Additionally, growth in emerging markets, robust online video creation demand and improving average revenue per user are tailwinds. However, lower end-market demand and exposure to Europe remain overhangs. High acquisition expenses do not bode well for its margin expansion.
NextEra shares have gained +2.2% over the past three months against the Zacks Electric Power industry’s fall of -2.4%. The Zacks analyst believes that the company is on course to achieve the long-term growth goal, despite disruptions caused by the pandemic outbreak, through solid execution of organic expansion plans.
The company carried strategic acquisitions and its capital growth projects amid this crisis, and has ample liquidity to meet its current debt obligations. However, its nature of business is subject to complex and comprehensive federal, state, as well as other regulations.
Furthermore, if the planned nuclear plant outages last longer or an unplanned outage occurs, the company’s operations and profitability might be hampered.
Other noteworthy reports we are featuring today include Caterpillar (CAT), Becton, Dickinson and Company (BDX) and Enbridge (ENB).
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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>>>