Today's Must Read
Adobe (ADBE) Grapples with Lower End Market Demand
AB InBev's (BUD) Focus on Innovation to Boost Market Share
Tuesday, November 21, 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 Apple (AAPL), Adobe (ADBE) and Anheuser-Busch (BUD). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Apple’s shares are up +46.7% in the year-to-date period, handily outperforming the S&P 500 (up +15.7%) and the Zacks Technology sector (up +27.3%). Apple reported spectacular fourth quarter fiscal 2017 results with both top and bottom lines beating expectations. Steady iPhone sales, spurt in Services segment and a resurgent Macs and iPad business backed the impressive results.
Business in China saw massive reacceleration driven by iPhone, Services and Mac sales. In India revenues grew twofold. The company also gave a very encouraging outlook for the current quarter, which includes the holiday season, given the anticipation of strong performance by its latest smartphone, iPhone X.
Going forward, the Zacks analyst thinks foray into fast-growing technologies like automobile, AI & AR/VR are long-term drivers. But the new iPhone X at $999 is quite pricey, particularly for cost-sensitive markets like India. Intensifying competition from cheaper Chinese handset-makers cannot be ignored.
Shares of Adobe have gained +77.1% year to date, outperforming the Zacks Software industry which has increased +35.7% over the same period. The company’s fiscal third quarter earnings exceeded expectations backed by demand for the company’s Creative Cloud software tools.
The Zacks analyst likes Adobe’s market position, compelling product lines, continued innovation, solid adoption of Creative Cloud and Adobe marketing cloud. Also, its acquisition of TubeMogul will help the company to build its position in the expanding Digital Marketing space. However, end-market recovery appears slow, which remains a matter of concern.
Anheuser-Busch’s shares have underperformed the Zacks Alcoholic Beverages industry so far this year (+9.6% vs. +20.3%), largely due to the company’s dismal earnings history. The company’s last reported quarter marked its seventh straight earnings miss, while revenues missed expectations for the second consecutive quarter.
However, the Zacks analyst likes Anheuser-Busch’s robust brand portfolio and solid geographical reach. The company keeps introducing near beer alternatives, along with no- and low-alcohol beers to resonate with changing consumer demand. Anheuser-Busch is also likely to benefit from its constant expansion in the craft beer space, given the rising demand for this beer category.
Furthermore, SABMiller’s buyout has helped it gain a dominant share in the global beer market. However, it continues to anticipate increased cost of sales, owing to lingering currency woes and growth of premium brands. Also, volatility in some of key regions remains a threat.
Other noteworthy reports we are featuring today include Tesla (TSLA), PACCAR (PCAR) and General Mills (GIS).
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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>>>