Today's Must Read
Qualcomm (QCOM) Rides on 5G Traction, Diversified Businesses
Expansion Efforts, Restructuring to Aid HSBC Holdings (HSBC)
Thursday, August 11, 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 PepsiCo, Inc. (PEP), QUALCOMM Incorporated (QCOM) and HSBC Holdings plc (HSBC). 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 >>>
PepsiCo’s shares have outperformed the Zacks Beverages - Soft drinks industry over the past year (+16.8% vs. +9.2%) on the back of resilience and strength of global beverage and convenient food businesses. It expects to benefit by delivering convenience, variety and value proposition to customers through its brands. It raised its revenue view for 2022.
However, PepsiCo witnessed margin pressures in the second quarter driven by impacts of supply-chain disruptions and inflationary labour, transportation and commodity costs. PEP anticipates incremental input cost inflation for the balance of 2022. Adverse currency rates also remain headwinds.
QUALCOMM shares have outperformed the Zacks Wireless Equipment industry over the past year (+3.7% vs. -5.4%) as the company continues to enjoy healthy traction in EDGE networking solutions across diverse sectors.
The buyout of Arriver will bolster its ability to deliver fully integrated Advanced Driver Assistance System solutions to automakers. The company is well-positioned to benefit from solid 5G traction with greater visibility and diversified businesses to meet its long-term revenue targets.
However, Qualcomm faces intense competition from low-cost chip manufacturers. High research and development costs are expected to dent margins, while global chip shortage due to supply-chain disruptions is a headwind. It is susceptible to risks arising from lower handset shipments, especially in China.
HSBC’s shares have outperformed the Zacks Banks - Foreign industry over the past year (+22.8% vs. -5.4%). The company’s strong capital position, initiatives to strengthen digital capabilities, an extensive network and improvement in operating efficiency through business restructuring will likely keep aiding growth.
Exiting from the U.S. and French retail banking operations is expected to help HSBC focus on Asia. In sync with this, the acquisition of AXA Singapore insurance assets will expand business in the region. Although initiatives to improve market share in the U.K. and China will continue to support financials, these might lead to a rise in costs, which will hurt HSBC’s profits. Yet, HSBC’s product and service leadership in many of the cross-border banking services helps it in widening its customer base.
Other noteworthy reports we are featuring today include ServiceNow, Inc. (NOW), Automatic Data Processing, Inc. (ADP), and Illumina, Inc. (ILMN).
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>>>