Back to top

Research Daily

Monday, October 14, 2019

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 (CSCO), SAP (SAP) and Gilead Sciences (GILD). 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 >>>

Cisco’s shares have outperformed the Zacks Computer Networking industry year to date (7.4% vs. 6.4%). The Zacks analyst believes that Cisco is benefiting from solid security business. Strong contribution from Infrastructure Platforms and applications is a positive.

Moreover, order strength and improving traction of the subscription-based business model are tailwinds. Further, a strengthening collaboration portfolio, which includes Webex Teams, bodes well. Additionally, acquisitions of Voicea and CloudCherry hold promise.

However, weakness in service provider business in China remains a concern. Further, stiff competition from Arista and Juniper in switching and routing verticals is likely to create pricing pressure and impact profitability. Also, increasing investments on product enhancements are likely to limit margin expansion at least in the near term.

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

Shares of SAP have gained 11.8% in the past six months against the Zacks Computer Software industry’s rise of 7.9%. The Zacks analyst believes that SAP is benefiting from strong growth in cloud and software revenues, and an expanding customer base.

Robust adoption of S/4HANA, C/4HANA and SuccessFactors Employee Central favors the company’s prospects. Notably, despite the exit of CEO Bill McDermott, estimates have been moving north ahead of the company’s Q3 earnings release primarily on robust preliminary results courtesy of an upbeat cloud business. Further, Qualtrics’ acquisition is enabling SAP to bolster Customer Experience segment revenues.

Moreover, strong demand for SAP's Intelligent Spend offerings holds promise. However, increasing investments to enhance cloud-based offerings are likely to weigh on the bottom line. Currency fluctuations and trade war between the United States and China remains an overhang on software licenses revenue growth particularly across Asia.

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

Gilead’s shares have lost 6% over the past three months compared with the Zacks Biotech industry’s fall of 7%. The Zacks analyst believes Gilead’s HIV franchise maintains momentum on the continued uptake of Genvoya and Odefsey, and the strong uptake of Biktarvy.

The company has shifted focus to the HIV franchise and newer avenues like CAR-T therapy and NASH, due to a decline in sales of the HCV franchise. The FDA recently approved a label expansion of HIV treatment, Descovy. The company is signing deals with other companies to strengthen its pipeline for the inflammation market. Gilead’s collaboration with Novo Nordisk for NASH treatments is a step in the right direction, given its recent debacles.

The company suffered a setback with the failure of a late-stage study on selonsertib in patients with compensated cirrhosis due to NASH. Additionally, the HIV franchise is expected to face stiff competition.

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

Other noteworthy reports we are featuring today include Bank of America (BAC), Altria Group (MO) and Caterpillar (CAT).

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>

Mark Vickery
Senior Editor

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>>>

Featured Reports

New Upgrades

New Downgrades