Today's Must Read
PayPal (PYPL) Benefits From Increasing Total Payment Volume
Cisco (CSCO) Rides on Security & Switching Products, Buyouts
Friday, November 19, 2021
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 Bank of America Corp. (BAC), PayPal (PYPL), and Cisco Systems, Inc. (CSCO). 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 >>>
Shares of Bank of America have outperformed the Zacks Banks - Major Regional industry over the past year (+72.8% vs. +54.0%). The Zacks analyst believes the company’s third-quarter 2021 results reflect solid revenue growth, a rise in loan demand, and improving capital markets performance.
Opening of new branches, enhancing digital capabilities and initiatives to manage expenses along with a strong balance sheet and liquidity position will continue supporting its financials. The company will keep enhancing shareholder value through impressive capital deployment activities.
However, lower interest rates and the Federal Reserve’s decision to not change the same in near term are expected to keep hurting the company’s margins and interest income. Normalization of the trading business is likely to hurt fee income growth to some extent.
Shares of PayPal have outperformed the Zacks Internet - Software industry over the past year (+4.0% vs. -2.9%). PayPal reported third quarter results wherein both earnings and revenues grew year over year. The Zacks analyst believes that strong growth in total payments volume owing to increasing net new active accounts drove the top line.
Strengthening customer engagement was positive. Also, solid performance by Venmo and merchant services contributed well to the TPV growth. Additionally, the boom in digital payment owing to the coronavirus pandemic, remains a tailwind. Also, solid momentum across peer to peer and PayPal Checkout experiences is a tailwind.
However, intensifying competition in the digital payment market poses a serious risk to the company’s market position. Also, foreign exchange headwinds remain concerns.
Shares of Cisco Systems have outperformed the Zacks Computer - Networking industry in the year to date period (+19.8% vs. +18.4%). The Zacks analyst believes that Cisco’s performance is benefitting from strength in its switching solutions, especially Catalyst 9000 switches. Ongoing momentum in Webex on account of COVID-19 induced work-from-home demand environment remains noteworthy. Robust adoption of the company’s subscription-based offerings acted as a tailwind.
However, management cautioned that the ongoing component shortages and resultant supply chain issues will continue in the first half of fiscal 2022 and might carry on in the remaining half. Weak demand for servers is an added concern.
Other noteworthy reports we are featuring today include Home Depot (HD), Deere & Company (DE) and United Airlines (UAL).
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>>>