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Research Daily

Monday, June 25, 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 Cisco (CSCO), Oracle (ORCL) and Kraft Heinz (KHC). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Cisco's shares have outperformed the Zacks Networking industry year to date, gaining +12.7% vs. +11.9%. Cisco is an IP-based networking company. Strong contribution from acquisitions, security, Infrastructure Platforms and applications drove are positives.

The Zacks analyst thinks Cisco’s expanding footprint in the rapidly growing security market presents significant growth opportunities. Strengthening collaboration portfolio which now includes Webex Teams and AI-based Accompany bodes well. Partnerships with Telenor, Apple, IBM, Microsoft and Google Cloud are positive. Divestiture of a portion of Cisco’s NDS video assets is likely to mitigate the sluggishness witnessed in other product segment.

However, weakness in switching and routing is a headwind. Ongoing transition to subscription-based model will continue to hurt the top line. Further, dampening service provider business and intense competition from the likes of Huawei, Juniper and Arista Networks are other concerns.

(You can read the full research report on Cisco here >>>).

Shares of Oracle have underperformed the Zacks Software industry in the last year, losing -13.3% vs. +29.4%. Oracle is one of the largest enterprise-grade database, middleware and application software providers. The company is benefiting from strong adoption of its cloud-based solutions.

The Zacks analyst thinks the company’s growing cloud market share will continue to drive top-line growth in the long haul. Partnerships with the likes of Accenture are helping the company rapidly expand its cloud-base clientele. Also, anticipated strong demand for the next-generation autonomous database supported by machine learning will boost competitive position against AWS.

Notably, Oracle has undergone structural changes. It no longer intends to break out its cloud revenues and does not provide any guidance on SaaS, Cloud PaaS and IaaS. This move is likely to enhance investor concern about the company's outlook.

(You can read the full research report on Oracle here >>>).

Kraft Heinz’s shares have declined -18.6% year to date, underperforming the Zacks Diversified Food industry which is down -7.8% over the same period. Kraft Heinz posted first-quarter 2018 results, wherein earnings beat expectations while revenues missed the same.

The Zacks analyst thinks the company is progressing well with its cost-savings plan as well as efforts to enhance productivity like zero-based budgeting; modernization and biding capability within the manufacturing footprint. However, Kraft Heinz top line has been soft. Evidently, in the first quarter, the top line was adversely impacted by soft consumer demand in North America and Rest of World.

Kraft Heinz has been struggling due to the shift in consumer preference toward natural and organic ingredients over packaged and processed food. Estimates have also trended downward over the past 60 days. Nevertheless, the company’s cost-savings, which are re-invested in the business for innovation, brand building and marketing should provide cushion.

(You can read the full research report on Kraft Heinz here >>>).

Other noteworthy reports we are featuring today include Micron (MU), ADP (ADP) and Deere (DE).

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Mark Vickery

Senior Editor

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>>>

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