Today's Must Read
NVIDIA (NVDA) Rides on AI Partnerships and Product Refreshes
Procter & Gamble's (PG) Cost Saving Plan Impresses, Sales Weak
Monday, November 20, 2017
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 Walmart (WMT), NVIDIA (NVDA) and Procter & Gamble (PG). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Buy-rated Walmart’s shares have been strong performers lately, with the stock up +24.1% over the last six months, outperforming the S&P 500's +7.8% gain in the same time period. The Zacks analyst likes Walmart’s solid earnings and comps record. The company has been gaining from constant e-commerce initiatives, like buyouts, alliances, and improved delivery systems.
These trends, along with solid traffic drove Walmart’s third-quarter fiscal 2018 performance, wherein both earnings and revenues rose year over year and beat estimates. Notably, this marked Walmart’s ninth and 13th straight quarter of positive earnings surprise and U.S. comps growth, respectively.
Also, the company’s international performance gained from strength in food categories. All these factors encouraged management to raise its view. However, stiff competition from brick and mortar and online retailers remains a concern. Also, macroeconomic woes like volatile consumer spending poses threats.
Shares of Strong Buy-rated NVIDIA have surged over the last year, gaining in excess of +127.4% versus the Zacks Semiconductor - General industry’s +52% gain. NVIDIA posted impressive third-quarter fiscal 2018 results and provided encouraging fourth quarter revenue guidance.
Also, the company registered year-over-year growth on both counts, primarily due to growth across all its four platforms. Better-than-expected demand for gaming chips helped the company post encouraging results.
The Zacks analyst likes NVIDIA’s sustained efforts toward attaining robust position in several emerging industries such as Artificial Intelligence (AI), deep learning and driverless cars. NVIDIA’s innovative product pipeline and strength in gaming and high-end notebook GPUs remain the positives. The company’s focus on GRID platforms can increase GPU adoption in data centers, giving it an advantage against its competitors.
Procter & Gamble's shares have underperformed the Zacks Soap and Cleaning Materials industry so far this year (+5.2% vs. +14.2%). P&G reported first-quarter fiscal 2018 results, wherein earnings and revenues surpassed expectations. Adjusted earnings increased 6% from the year-ago level aided by productivity cost savings.
Overall organic sales were up 1%, comprising 1% volume growth despite decelerating market growth and a 30 bps headwind from natural disasters. The Zacks analyst likes the company’s focus on balanced growth through improved product, packaging, and marketing initiatives and its productivity cost saving plan.
However, core gross and operating margin weakness was notable in the quarter that decreased 40 bps each. Lower pricing, higher commodity costs, increased competition and an unfavorable mix continued to hurt profitability. Again, decelerating organic sales growth in developed and developing markets raise concerns.
Other noteworthy reports we are featuring today include Mondelez (MDLZ), Phillips 66 (PSX) and AstraZeneca (AZN).
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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>>>