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Research Daily

Sheraz Mian

Top Research Reports for IBM, Goldman Sachs & Diageo


Trades from $3

Tuesday, May 31, 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 IBM (IBM), The Goldman Sachs Group, Inc. (GS) and Diageo plc (DEO). 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 >>>

IBM Shares have outperformed the Zacks Computer - Integrated Systems industry over the past year (+5.6% vs. -3.3%), with strong demand for hybrid cloud and AI, driving growth in Software and Consulting. Synergies from the Red Hat buyout are bolstering its competitive position in the hybrid cloud market.

It is likely to gain from the robust adoption and broad-based availability of IBM Blockchain World Wire — a blockchain-driven global payments network aimed at accelerating and optimizing cross-border payments. A combination of a better business mix, improving operating leverage and higher investments will likely drive future growth opportunities.

However, stiff competition in the cloud computing market from the likes of Amazon Web Services and Microsoft Azure remains an overhang. Higher debt levels amid extensive restructuring activities pose a concern. High integration risk from continuous acquisition spree is another headwind.

(You can read the full research report on International Business Machines here >>>)

Goldman Sachs shares have declined -13.2% over the past year against the Zacks Financial - Investment Bank industry’s decline of -14.1%. The Zacks analyst believes that any normalization of trading business is likely to hurt the Global Market segment’s revenues in the upcoming period. Goldman’s persistently rising expense base will hinder the bottom line. Also, legal hassles and higher dependence on overseas revenues are worrisome.

However, the company’s strength in wealth management and consumer banking businesses are tailwinds, As part of its inorganic moves, it will acquire robo-advisor NextCapital Group. Robust client engagement, solid position in announced and completed mergers and acquisitions (M&As) globally and investment banking (IB) backlog are likely to keep driving its IB revenues.

(You can read the full research report on Goldman Sachs here >>>)

Shares of Diageo have outperformed the Beverages - Alcohol industry over the past two years (+36.4% vs. +25.1%). The company’s continued recovery in the on-trade channel, strong consumer demand in the off-trade and market share gains, which also aided the company’s first-half fiscal 2022 performance. The company witnessed sales, operating margin and earnings growth in first-half fiscal 2021 driven by organic sales growth across all regions. Strong recovery in gross margin and operating cost leverage along with higher marketing investments aided organic operating margin growth.

Moreover, margin growth was driven by supply productivity savings and price increases, which more than offset the higher cost inflation. It provided a decent view for fiscal 2022, with organic sales momentum likely to continue in the second half of fiscal 2022. However, continued inflationary pressures and currency headwinds are concerning.

(You can read the full research report on Diageo here >>>)

Other noteworthy reports we are featuring today include ServiceNow, Inc. (NOW), The Southern Company (SO), and The Progressive Corporation (PGR).
Sheraz Mian
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>>>

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