Today's Must Read
Strong GPU Adoption in Gaming, Datacenter Aids NVIDIA (NVDA)
Decent Comps Run to Fuel Costco's (COST) Sales, Cost a Concern
Friday, March 5, 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 Mastercard (MA), NVIDIA (NVDA) and Costco Wholesale (COST). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Mastercard shares have outperformed the Zacks Financial Transaction Services industry over the past year (+23.9% vs. +11.6%). The Zacks analyst believes that the company is gaining from solid demand for digital and contactless solutions amid the COVID crisis.
Investment in technology keeps Mastercard at the forefront of the rapidly-evolving payments industry. The company is well poised to gain from consistent cash generating abilities from operations. Its strong capital position drives investment in business and shareholder value addition.
The company's earnings of $1.64 per share beat the Zacks Consensus Estimate by 8.6% but the same declined 16% year over year due to weak cross-border business. However, steep costs might stress margins. The company's cross-border volumes will remain suppressed due to COVID-led restriction on travel and entertainment.
Shares of NVIDIA have lost -2.5% in the last six months against the Zacks General Semiconductor industry’s gain of +9.8%. The Zacks analyst believes that NVIDIA is benefiting from the coronavirus-induced work-from-home and learn-at-home wave.
It is also benefiting from strong growth in GeForce desktop and notebook GPUs, which is boosting gaming revenues. Moreover, a surge in Hyperscale demand remains a tailwind for the company’s Data Center business. Expansion of NVIDIA GeForce NOW is expected to drive user base.
Additionally, collaboration with Daimler-owned Mercedes-Benz is expected to further strengthen NVIDIA’s presence in the autonomous vehicles and other automotive electronics space. However, management expects COVID-19 pandemic to negatively impact near-term revenues. Moreover, the U.S.-China trade war remains a key concern.
Costco’s shares have lost -16.5% over the past three months against the Zacks Discount Retail industry’s loss of -7.8%. The Zacks analyst believes that Costco has been benefiting from the coronavirus-induced spike in demand due to its status of an essential retailer.
The company’s growth strategies, better price management, decent membership trend and increasing penetration of e-commerce business reinforce its position. Cumulatively, these factors have been aiding in registering impressive sales and earnings numbers.
Costco put up a decent performance in second-quarter fiscal 2021, wherein both the top and the bottom lines grew year over year. However, margins still remain an area to watch. Any deleverage in SG&A rate as well incremental wages and sanitation costs cannot be ignored.
Other noteworthy reports we are featuring today include The Walt Disney Company (DIS), Bristol-Myers Squibb (BMY) and PetroChina (PTR).
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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>>>