Today's Must Read
Strong Demand for Networking Products Aids Broadcom (AVGO)
Wireless Subscriber Gain Drives Comcast's (CMCSA) Prospects
Tuesday, October 3, 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 Berkshire Hathaway Inc. (BRK.B), Broadcom Inc. (AVGO) 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 >>>
Berkshire Hathaway shares have outperformed the Zacks Insurance - Property and Casualty industry over the year-to-date period (+12.7% vs. +8.5%). The company is one of the largest property and casualty insurance companies measured by premium volume. Berkshire's inorganic growth story remains impressive with strategic acquisitions.
A strong cash position supports earnings-accretive bolt-on buyouts and indicates the financial flexibility. Continued insurance business growth fuels increase in float, drive earnings and generates maximum return on equity. The non-insurance businesses are delivering improved results with increased revenues over the past few years. A sturdy capital level provides further impetus.
However, exposure to catastrophe loss induces earnings volatility and also affects the property and casualty underwriting results of Berkshire. Huge capital expenditure remains a headwind for the company.
(You can read the full research report on Berkshire Hathaway here >>>)
Shares of Broadcom have outperformed the Zacks Electronics - Semiconductors industry over the year-to-date period (+52.1% vs. +40.0%). The company is benefiting from the strong deployment of generative AI by hyperscalers, service providers and enterprises.
Broadcom expects generative AI to contribute more than 25% of semiconductor revenues in fiscal 2024 compared with an estimated 15% in fiscal 2023 and roughly 10% in fiscal 2022. Strong demand for Tomahawk 5, Jericho, 10-gigabit PON and DOCSIS 3.1 with embedded Wi-Fi 6 and 6E aids Broadcom’s prospects.
Expanding portfolio with the launch of the second-gen Wi-Fi 7 wireless connectivity chip is a catalyst. Broadcom expects networking revenues to grow nearly 20% year over year in the fiscal third quarter. Server storage connectivity revenues are expected to be up low single digits year over year.
(You can read the full research report on Broadcom here >>>)
Comcast shares have outperformed the Zacks Cable Television industry over the year-to-date period (+30.1% vs. +18.8%). The company is benefiting from a growing wireless subscriber base as witnessed in the second quarter of 2023. However, broadband user base decreased in the reported quarter. Comcast’s plan to transition to DOCSIS 4.0 is noteworthy.
The technology will help it in expanding much faster and at a lower cost compared to competitors. Recovery in park and movie business bodes well for Comcast’s profitability. Its streaming service Peacock is a key catalyst in driving broadband sales. Strong free cash flow generation ability is noteworthy.
However, Comcast persistently suffers from video-subscriber attrition due to cord cutting. Moreover, broadband prospects are suffering from increased competition from fixed wireless as well as fiber. Additionally, a leveraged balance sheet is a major concern.
(You can read the full research report on Comcast here >>>)
Other noteworthy reports we are featuring today include Oracle Corporation (ORCL), T-Mobile US, Inc. (TMUS) and Vertex Pharmaceuticals Incorporated (VRTX).
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>>>