Today's Must Read
NVIDIA (NVDA) Rides on Growing Gaming and Datacenter Demand
Las Vegas Sands (LVS) Banks on Mass and Non-Gaming Segments
Tuesday, August 21, 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 Boeing (BA), NVIDIA (NVDA) and Las Vegas Sands (LVS). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Boeing’s shares have surged +46.3% in the past year, outperforming the Zacks Aerospace & Defense sector, which gained +22.3% 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 4.1%. Boeing expects single-aisle jets to be the major driver behind this demand growth.
However, the aerospace giant continues to face challenges from stiff competition. For the company’s 747 model, weak demand for large commercial passenger and freighter aircraft accompanied with slower-than-expected growth of global freight traffic continue to create market uncertainties. Entrance of new competitors in the aerospace market may impact the top and bottom line of the company.
Shares of NVIDIA have surged year to date, gaining +28.1% versus the Zacks General Semiconductor industry’s +8.2% increase. NVIDIA posted stellar second-quarter results wherein the company registered year-over-year growth on both counts, primarily stemming from growth across all four platforms.
Also, higher-than-anticipated demand for its gaming chips led to the encouraging results. Notably, growing e-sports & migration to cloud are driving demand for NVIDIA’s GPUs in the gaming & datacenter markets. Furthermore, the Zacks analyst thinks NVIDIA’s innovative product pipeline and strength in gaming and high-end notebook GPUs keep it well positioned.
Higher adoption of NVIDIA’s Volta processors is likely to act as a catalyst in the near term. Nevertheless, recent developments like suspension of test drives for all its driverless vehicles and lack of contribution from cryptocurrency miners leads to caution about its near-term performance.
Las Vegas Sands’ shares have gained +8.3% over the past year, outperforming the Zacks Gaming industry’s increase of +1.7%. The Zacks analyst thinks this trend might continue as the company’s top and bottom-line growth remains impressive.
Although the company’s earnings missed expectations in second-quarter 2018, it delivered a positive earnings surprise in the preceding five quarters. Also, EBITDA margins have been improving consistently owing to focus on the mass and non-gaming segments, which carry higher margins.
Furthermore, Las Vegas Sands remains focused on a convention-based Integrated Resort business model. Notably, this model helps in generating the most diversified set of cash flows and profit from non-gaming segments besides bringing unsurpassed economic and diversification benefits to the regions in which it operates.
However, high debt remains a major concern. Additionally, the company might fail to finance its upcoming projects due a debt burden.
Other noteworthy reports we are featuring today include FedEx (FDX), Moody's (MCO) and NetApp (NTAP).
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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>>>