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Research Daily

Monday, May 6, 2024

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 Apple Inc. (AAPL), Linde plc (LIN) 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 >>>

Apple shares have lagged the Tech sector (-5.5% vs. +10.5%) and the broader market (-5.5% vs. +7.8% for the S&P 500 index) this year. But this trajectory appears to shifted materially following the iPhone maker's quarterly results and record buyback announcement.

The company’s Services segment is enjoying favorable momentum on the back of solid adoption of Apple TV+, Apple Pay and Apple Music. The updated MacBook and iMac lineup has helped Apple gain a share in the PC market.

The launch of Apple Vision Pro, a spatial computer that blends digital content with the physical world, has expanded Apple’s non-iPhone portfolio. The company’s strong cash balance and shareholder-friendly approach to dividends and share repurchase are noteworthy.

However, Apple has been suffering from stiff competition in the smartphone market and weakness in China. Growing legal complexities, including ongoing EPIC and Masimo lawsuits and the latest case by the U.S. Department of Justice, have been a headwind. Unfavorable forex is expected to have hurt fiscal second-quarter revenues by 2% on a year-over-year basis.

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

Shares of Linde have outperformed the Zacks Chemical - Specialty industry over the past year (+15.9% vs. -11.4%). The company has an extensive range of industrial gas applications that are enhancing its global productivity day by day. The company supplies a wide range of gases crucial for various sectors like energy, steel, healthcare, manufacturing and electronics.

Linde has long-term contracts with on-site customers, backed by minimum purchase requirements, ensuring stable cash flows. Its substantial backlog ensures earnings potential. The merger of Praxair and Linde has positioned the firm as an efficient player in the profitable industrial gas market, with a considerable size advantage.

However, rising competition for new projects in emerging markets raises concerns. The decrease in U.S. industrial production is also expected to reduce the demand for industrial gases, thereby affecting profits. As such, the stock warrants a cautious stance.

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

Comcast’s shares have declined -11.7% over the year-to-date against the Zacks Cable Television industry’s decline of -17.7%. The company is benefiting from a growing wireless subscriber base as witnessed in the fourth quarter. Comcast has begun to deliver multi-gig symmetrical speeds in its DOCSIS 4.0 deployment. The technology is expected to help the company expand much faster and at a lower cost compared with competitors.

Recovery in the theme park and movie business bodes well for the company’s profitability in the near term. 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. Broadband user base decreased in the reported quarter due to increasing competition from fixed wireless as well as fiber. 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 ICICI Bank Limited (IBN), Xylem Inc. (XYL) and ResMed Inc. (RMD).

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>>>

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