Today's Must Read
Adobe (ADBE) Rides on Creative Strength; Expenses A Concern
NVIDIA (NVDA) Gets a Boost From Gaming Business Recovery
Tuesday, November 26, 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 Mastercard (MA), Adobe Systems (ADBE) and NVIDIA (NVDA). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Mastercard’s shares have outperformed the Zacks Financial Transaction Services industry year to date (+52.6% vs. +41.3%). The Zacks analyst believes that the company's revenues are gaining from higher switched transactions, increase in cross-border volume and gross dollar volume.
Numerous acquisitions made over the years have fueled its inorganic growth. The company is benefiting from shifts in payments, from physical to digital. Investment in technology has also kept the company at the forefront of the rapidly changing payments industry. Its solid capital position enables investment in business.
The Zacks Consensus Estimate for current-year earnings has been revised 1.1% upward over the last 30 days. However, escalating costs might put pressure on margins. In order to gain customers and new business, Mastercard has been incurring high levels of costs under rebates and incentives, which remain a concern.
Shares of Adobe have gained 4.9% in the past three months against the Zacks Software industry’s rise of 9.8%. The Zacks analyst remains optimistic about Adobe’s market position, compelling product lines, continued innovation, solid adoption of Creative Cloud and Adobe marketing cloud.
Adobe’s increasing demand for its creative products continues to drive its top-line growth. Also, the company’s Adobe Document Cloud and Adobe Experience Cloud products, along with growing subscription for cloud application are positives.
It has been making great efforts toward establishing its presence in cloud-related software areas such as documents and marketing. However, lower end-market demand and exposure to Europe remain overhangs. High acquisition expenses do not bode well for its margin expansion.
NVIDIA's shares have gained 52.2% over the past six months against the Zacks General Semiconductor industry's rise of 33.5%. The Zacks analyst believes that company is benefiting from strong growth in GeForce desktop and notebook GPUs, which is boosting gaming revenues.
Solid momentum of its real-time ray tracing technology is also a positive. Increase in Hyperscale demand is a tailwind for Data Center business as well. Growing adoption in the inference market is an upside too. Further, the solid uptake of AI-based smart cockpit infotainment solutions is a boon. Additionally, strength across mobile workstation products is aiding Professional Visualization revenues.
However, the company’s bleak guidance for the fourth quarter due to seasonality is a concern. Management expects strong sequential growth in Data Center to be offset by a seasonal decline in GeForce notebook GPUs and SoC modules for gaming platforms.
Other noteworthy reports we are featuring today include United Technologies (UTX), Lockheed Martin (LMT) and Estee Lauder (EL).
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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>>>