Today's Must Read
Visa (V) Banks on Renewed Agreements, Rising Costs Hurt
Cisco (CSCO) Gains From Security Products & Strategic Deals
Monday, January 24, 2022
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 Microsoft Corporation (MSFT), Visa Inc. (V), 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 Microsoft have outperformed the S&P 500 over the past year (+30.1% vs. +15.9%) on the back of momentum in its Azure cloud platform.
The Zacks analyst noted that the stock has been under pressure lately on account of broad market-wide weakness and unease around its Activision Blizzard acquisition, but the company's long-term outlook remains very attractive.
The continuation of remote work and adoption of hybrid work model has been boosting the Teams’ user growth. Solid uptake of new Xbox consoles is also aiding the gaming segment performance. Microsoft is also witnessing growth in user base of its different applications including Microsoft 365 suite, Dynamics and Power Platform. Increased spending on Azure enhancements and stiff competition in the cloud space, however, are likely to dent margins.
Visa shares have lost -17.4% over the past six months against the Zacks Financial Transaction Services industry’s loss of -26.5%, however, things seem to be improving for it. The Zacks analyst believes that numerous buyouts and alliances have paved way for Visa’s long-term growth. Investments in technology have solidified Visa’s position in the payments market.
Coronavirus vaccine rollouts and the gradual revival of consumer confidence will keep driving spending, expanding business volumes in turn. Backed by its strong cash position, the company remains committed to boost its shareholder value. High operating expenses and ramped-up client incentives, however, are likely to weigh on the margins. Visa's declining Cash Volume from the Asia Pacific and Europe are concerning.
Shares of Cisco have gained +3.4% in the last three months against the Zacks Computer Networking industry’s gain of +3.6%. Component shortages and ongoing supply chain issues are expected to persist in the second half of fiscal 2022 and bump up costs. This is likely to dent revenues and margin expansion.
The Zacks analyst, however, believes that Cisco has been benefiting from strength in its product portfolio and momentum in product order growth. Strength in Webscale business and solid uptake of switching solutions is a major tailwind. A healthy uptake of identity and access, advanced threat and unified threat management security solutions amid high growth in Internet traffic is another catalyst for growth.
Other noteworthy reports we are featuring today include Berkshire Hathaway Inc. (BRK.B), Eli Lilly and Company (LLY) and Thermo Fisher Scientific Inc. (TMO).
Director of Research
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>>>