Wednesday, June 7, 2023

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 Cisco Systems, Inc. (CSCO), Toyota Motor Corporation (TM) and Verizon Communications Inc. (VZ). 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 Cisco Systems have modestly outperformed the Zacks Computer - Networking industry over the past year (+14.7% vs. +14.2%). The company is riding on the growing demand for its security products. Its security portfolio is benefiting from the launch of new data loss prevention, firewall and zero trust capabilities. Zero Trust portfolio is riding on strong demand for its Duo offering.

Optimized application experience is benefiting from strong demand for ThousandEyes. Its investments across security business, focusing on cloud-based and AI-driven offerings, is expected to drive growth. Expanding growth opportunities for low-power-consuming technologies, including IoT, Silicon One and Power over Ethernet bodes well for Cisco.

Cisco now expects modest revenue growth in fourth quarter. Earnings is expected to grow at a higher rate than revenues driven by gross margin expansion and disciplined expense management.

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

Toyota Motor shares have outperformed the Zacks Automotive - Foreign industry over the past six months (+4.4% vs. +2.4%). The Zacks analyst believes continued demand for vehicles and robust product line-up is set to fuel sales volumes of Toyota.

To capitalize on the accelerated global shift to green cars, the auto giant is deepening focus on manufacturing electric and fuel-cell vehicles, which will bolster the company’s product competitiveness. The company’s commitment to return capital to shareholders and upbeat fiscal 2024 view spark confidence.

However, commodity cost inflation is expected to weigh on gross margins. Supply-chain disruptions and tough labor market will play spoilsports. Unfavorable foreign currency translations and high R&D expenses are also likely to limit profits. Also, elevated leverage of the firm may restrict its financial flexibility to tap onto growth opportunities. Thus, investors are advised to wait for a better entry point.

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

Shares of Verizon Communications have declined -3.5% over the past six months against the Zacks Wireless National industry’s decline of -10.4%. The company is witnessing significant 5G adoption and fixed wireless broadband momentum. Its 5G mobility service offers a premium experience across various industries such as public safety, health care, retail and more. Strong demand for Fios and fixed wireless products are tailwinds.

Verizon’s mmWave footprint delivers game-changing experiences for the densest parts of the network and offers reliable signal waves with enhanced efficiency and less interference for consumers.

However, retail prepaid and postpaid net losses are hindering the top line. Stiff competition from other major players and saturation in the U.S. wireless market is hurting its profits. Heavy spending on promotional activities to attract customers is weighing on margins. It has reiterated its earlier soft guidance for 2023 due to a challenging macroeconomic environment.

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

Other noteworthy reports we are featuring today include Meta Platforms, Inc. (META), Intuit Inc. (INTU) and American Express Company (AXP).

Director of Research

Sheraz Mian

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>>>