Today's Must Read
Accenture (ACN) Gains From Service Demand Amid Talent Cost
High Speed Internet Subscriber Gain Benefits Comcast (CMCSA)
Thursday, June 30, 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 Amazon.com, Inc. (AMZN), Accenture plc (ACN), and Comcast Corporation (CMCSA). 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 >>>
Amazon shares have significantly lagged the broader market lately, with the stock down -37.4% in the year-to-date period vs. -20.3% decline for the S&P 500 index. Amazon has missed top-line estimates in each of the last four quarters, as growth has decelerated in the post-pandemic period. Rising costs and over-capacity also appear to be headwinds. That said, Amazon remains the undisputed leader in ecommerce and cloud computing. Gaining on solid Prime momentum owing to ultrafast delivery services and strong content portfolio. Further, strengthening relationship with third-party sellers is a positive.
Also, growing momentum across Amazon Music is contributing well. Additionally, strong adoption rate of AWS is aiding the company’s cloud dominance. Also, expanding AWS services portfolio is continuously helping Amazon in gaining further momentum among the customers. Further, robust Alexa skills and expanding smart home products portfolio are positives. Additionally, the company’s strong global presence and solid momentum among the small and medium businesses remain tailwinds.
Accenture shares have modestly underperformed the Zacks Consulting Services industry over the past year (-4.0% vs. -2.5%).
While Accenture is faced with a number of near-term challenges like increased competition from strong companies like Genpact, Cognizant and Infosys, and exposure to exchange rate fluctuations as a result of its global status, it has been steadily gaining traction in its outsourcing and consulting businesses. The company has been strategically enhancing its cloud and digital marketing suite through buyouts and partnerships. The company’s strong operating cash flow has helped it reward its shareholders in the form of dividend payments and share repurchases, and pursue opportunities in areas that show true potential.
Comcast shares have declined -29.7% over the past year against Zacks Cable Television industry’s decline of -31.5%. The company is persistently suffering from video-subscriber attrition due to cord-cutting. Moreover, a leveraged balance sheet is a major concern. However, Comcast is benefiting from strength in broadband subscriber base and strong momentum in the wireless business.
The company’s strategy to provide high-speed Internet at an affordable price plays a pivotal role in providing connectivity and improving customer experience. Moreover, COVID-led increased media consumption and the work-from-home and online-learning waves bode well for Comcast’s Internet business. The company’s streaming service Peacock gained significant traction within a short span and is a key catalyst in driving broadband sales. Strong free cash flow generation ability is noteworthy.
Other noteworthy reports we are featuring today include Morgan Stanley (MS), Lockheed Martin Corporation (LMT), and Caterpillar Inc. (CAT).
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>>>