Today's Must Read
Solid User Base, Instagram Strength Aid Meta Platforms (FB)
Thermo Fisher (TMO) Advances in Bioprocess, End Market Up
Wednesday, May 4, 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 Corp. (MSFT), Meta Platforms, Inc. (FB), and Thermo Fisher Scientific Inc. (TMO). 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 Zacks Computer - Software industry over the past year (+16.1% vs. +3.9%). The company’s revenue benefited from the strong performance of Azure, Office 365, Dynamics, LinkedIn, and Server products.
However, third-quarter earnings were negatively impacted by the Nuance acquisition to the tune of a penny. Unfavorable forex and the Russia-Ukraine conflict are expected to hurt revenues. The Zacks analyst believes that Microsoft continues to expect the Nuance acquisition to be minimally dilutive in fiscal 2022 and accretive in fiscal 2023 to non-GAAP earnings. Increasing spending on Azure enhancements amid stiff competition in the cloud space is a headwind.
Meta Platforms shares have declined -33.5% over the past year against the Zacks Internet - Software industry’s decline of -49.4%. The company’s results suffered from Apple’s iOS changes as well as engagement-related headwinds. Apple’s iOS changes have made ad targeting difficult, which, in turn, has increased the cost of driving outcomes.
Meta expects these factors to hurt advertising revenue growth in throughout 2022. Meta’s second-quarter guidance reflects macroeconomic and forex concerns. The Zacks analyst believes that Cost inflation and supply chain disruptions are expected to impact advertiser budgets.
However, Meta is benefiting from steady user growth across all regions, particularly Asia Pacific. Increased engagement for its products like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver.
Shares of Thermo Fisher have outperformed the Zacks Medical - Instruments industry over the past year (+16.5% vs. -13.1%). The Zacks analyst believes that the robust year-over-year revenue growth in the Analytical Instruments and the Laboratory Products and Biopharma Services segments appears promising. The company’s strategic acquisitions of PPD, Inc. and PeproTech raise investors’ confidence.
Thermo Fisher’s accelerated investments to expand bioproduction capacity also buoy optimism. The upbeat guidance for 2022 is indicative that this growth momentum will continue. However, the year-over-year decline in revenues in the Specialty Diagnostics segment is disappointing. The contraction of both margins does not bode well either.
Other noteworthy reports we are featuring today include Berkshire Hathaway Inc. (BRK.B), NextEra Energy, Inc. (NEE), and HSBC Holdings plc (HSBC).
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>>>