Today's Must Read
NVIDIA (NVDA) Rides on Strong Adoption of GPUs, Partnerships
Cash Flows, Robust Order Growth Aids Lockheed Martin (LMT)
Wednesday, July 11, 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 Apple (AAPL), NVIDIA (NVDA) and Lockheed Martin (LMT). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Buy-ranked Apple’s shares have gained +12.5% year to date and have outperformed the broader market with the S&P 500 gaining +4.7% over the same period. The Zacks analyst thinks Apple's Services segment has become the new cash cow for the company.
The segment is expected to grow strongly driven by increasing adoption of Apple Music & Apple Pay. Further, the higher ASP of iPhone X is also expected to boost the top-line growth. Going ahead, Apple’s foray into fast-growing technologies like autonomous vehicle, artificial intelligence (AI) & AR/VR will drive growth.
Nevertheless, lower shipments of iPhone X units due to lack of demand can hurt top-line, particularly due to significant competition in most of its operating markets. The rise of feature-rich smartphones at a much cheaper price also remains a major headwind.
Shares of NVIDIA have surged year to date, gaining +30.9% versus the Zacks General Semiconductor industry’s +16.4% gain. The Zacks analyst thinks the company’s sustained focus on the development of innovative products for the gaming, datacenter and automobile sectors is a key growth driver.
Partnerships with companies like Baidu, Daimler and Bosch act as tailwinds. Higher adoption of NVIDIA’s Volta processors will likely act as a catalyst in the near term. Estimates have been stable lately ahead of the company’s Q2 earnings release.
The company has positive record of earnings surprises in recent quarters. Nonetheless, recent developments like suspension of test drives for all its driverless vehicles and a likely sluggish demand from cryptocurrency miners makes us slightly cautious about its near-term performance.
Buy-ranked Lockheed Martin’s shares have gained +7.8% over the last year, underperforming the Zacks Aerospace Defense sector, which has gained +30% over the same period. Being the largest defense contractor in the world, Lockheed Martin experiences strong demand for high-end military equipment in domestic markets.
Lockheed Martin’s products are also well acclaimed in the international market. Consequently, strong order growth has been a primary growth driver for this company. Lockheed Martin continues to be a strong cash generator, helping it to take important cash deployment decisions.
The Zacks analyst thinks recent adoption of expansionary budgetary policies in the United States will immensely boost this defense prime's business growth. However, the company faces intense competition for its broad portfolio of products and services in both domestic and international markets.
Other noteworthy reports we are featuring today include Duke Energy (DUK), Intercontinental Exchange (ICE) and Johnson Controls (JCI).
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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>>>