Today's Must Read
Intel (INTC) Rides on AI-based Alliances & Product Rollouts
Commercial and Military Jet Demand Aids Boeing's (BA) Growth
Friday, June 1, 2018
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 Facebook (FB), Intel (INTC) and Boeing (BA). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Facebook’s shares have outperformed the S&P 500 index in the last year, gaining +24.8% vs. +10.7%. The Zacks analyst thinks Facebook is benefitting from robust growth in advertising and user base. Rising mobile conversions on the platform is driving mobile ad growth. Growing popularity of Stories across all its major platforms, with Instagram taking center stage, is a tailwind.
Apart from mobile and video, the monetization opportunities of Messenger, WhatsApp and Oculus and a huge user base are expected to drive growth going ahead. However, increasing regulatory scrutiny remains an overhang on the stock. Facebook's sizable investments to tighten security on the platform along with continued investments in video, AR/VR and AI will dent operating margins going ahead.
Shares of Intel have underperformed the Zacks General Semiconductor industry over the past one year, gaining +52% vs. +54.5%. However, the Zacks analyst thinks Intel is benefiting from robust performance of the Data Center Group, Internet-of-Things Group, Non-Volatile Memory Solutions and Programmable Solutions Group.
These segments form the crux of Intel’s data-centric business model. The company’s strategy of expanding TAM beyond CPU to adjacent product lines like silicon photonics, fabric, network ASICs, and 3D XPoint memory is bearing fruit. Further, expanding customer base in the PSG segment drove top-line growth.
Moreover, stable PC market is also positive for the company. Additionally, lower spending helped in expanding operating margins. Intel raised 2018 guidance based on these solid growth trends. However, delay in transition to 10-nm process is a concern. Moreover, intensifying competition remains a headwind.
Buy-ranked Boeing’s shares have surged +85.1% in the last year, outperforming the Zacks Aerospace & Defense sector, which gained +36.8% during the same time period. The Zacks analyst emphasizes that the company is the largest aircraft manufacturer in the world in terms of revenues, orders and deliveries.
Considering the huge global demand for commercial jets, Boeing has been enjoying an enormous flow of orders from all over the world. In this regard, the company’s 20-year market outlook forecasts commercial jetliner demand to increase by 3.6%. Boeing expects single-aisle jets to be the major driver behind this demand growth.
Meanwhile, Middle East has emerged as another promising market for Boeing, as is evident from its latest JV worth $450 million with Saudi Arabia. Also, India appears to be another promising market for Boeing as the country is expected to become the world’s fastest growing aviation market. Yet, this aerospace giant continues to face challenges from stiff competition.
Other noteworthy reports we are featuring today include Las Vegas Sands (LVS), Humana (HUM) and Baxter (BAX).
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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>>>