Today's Must Read
Order Growth to Aid Lockheed (LMT) Amid F-35 Cost Issue
Intuit (INTU) Rides on Solid Product Portfolio & Cloud Shift
Wednesday, October 23, 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 salesforce.com (CRM), Lockheed Martin (LMT) and Intuit (INTU). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
salesforce’s shares have underperformed the Zacks Computer Software industry year to date (4.9% vs. 27.8%). The Zacks analyst believes that salesforce is gaining from solid growth across its cloud offerings.
The company is benefiting immensely from an expanding partner ecosystem, which is contributing to business wins and boosting its presence globally. Deal wins in the international market are growth drivers. Rapid adoption of its diverse cloud offerings, given an upsurge in demand for digital transformation, is a key catalyst.
Additionally, acquisitions like MuleSoft, Tableau, ClickSoftware and Salesforce.org are significant revenue drivers. However, stiff competition from Oracle and Microsoft is a concern. Persistence of unfavorable currency fluctuations is a key headwind. Besides, increasing investments in international expansions and data centers are an overhang on profitability.
Shares of Lockheed Martin have gained 13.4% in the past six months against the Zacks Aerospace Defense industry’s rise of 1%. The Zacks analyst believes that the company enjoys strong demand for its high-end military equipment in domestic and international markets.
Lockheed Martin is also the largest U.S. defense contractor with a platform-centric focus that guarantees a steady inflow of follow-on orders. In a year’s time, Lockheed Martin has outperformed the industry. However, the company’s higher debt-to-equity ratio shows that the stock is highly leveraged when compared with its industry.
Lockheed Martin also faces intense global competition for its broad portfolio of products and services. Forced cost reduction initiatives for its F-35 program might hamper its operating results.
Intuit’s shares have lost 7.6% over the past three months against the Zacks Computer Software industry’s decline of 5.9%. The Zacks analyst believes Intuit is benefiting from strong momentum in Online ecosystem revenues and growth in the Consumer business. Impressive growth in its Small Business and Self-Employed is a tailwind.
The TurboTax Live offering is also driving strong growth in the Consumer tax business. Solid momentum of the company’s lending product, QuickBooks Capital, is a positive. Moreover, the company’s strategy of shifting its business to cloud-based subscription model will help generate more stable revenues over the long run.
Estimates have been stable lately ahead of the company’s Q1 earnings release. However, high costs and expenses remain a major concern. Moreover, the company expects total QuickBooks Online subscriber growth to moderate in the near term as it continues to focus on additional services.
Other noteworthy reports we are featuring today include Disney Company (DIS), The Bank of New York Mellon (BK) and ConocoPhillips (COP).
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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>>>