Today's Must Read
Accenture (ACN) to Gain from Symantec Cyber Security Buyout
Adobe (ADBE) Rides on Creative Strength; Expenses A Concern
Friday, January 10, 2020
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 Chevron (CVX), Accenture (ACN) and Adobe Systems (ADBE). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Chevron’s shares have outperformed the Zacks Integrated Oil industry over the past year (+4.4% vs. -3.7%) and the analyst believes that the outperformance should continue on the back of a project pipeline that is among the best in the industry, thanks to planned expansion in the lucrative Permian Basin.
Chevron’s well economics in the West Texas shale play also continues to improve as the company has been able to achieve a 40% reduction in its development and production expenses since 2015. However, the continued drop in Chevron's downstream unit earnings (partly attributable to a fall in domestic refined products sales margins) is a concern.
Moreover, the energy supermajor’s massive $10-$11 billion impairment charge is expected to increase its gearing. Hence, investors are advised to wait for a better entry point.
Shares of Accenture have gained +11.4% in the past three months against the Zacks Consulting industry's rise of +10.6%. The Zacks analyst believes that Accenture has been steadily gaining traction in its outsourcing and consulting businesses.
The company has been strategically enhancing its cloud and digital marketing suite through acquisitions and partnerships. The company’s strong operating cash flow has helped it reward its shareholders in the form of dividends and share repurchases, and pursue opportunities in areas that show true potential. Accenture is currently a global leader in the Salesforce implementation service space.
However, Accenture continues to face pricing pressure due to significant competition from strong companies like Genpact, Cognizant and Infosys. Global presence exposes Accenture to foreign currency exchange rate fluctuations. Buyout-related integration risks is a concern.
Adobe's shares have gained +11% over the past six months against the Zacks Software industry's rise of +9.3%. 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 is driven by increasing demand for its creative products. 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 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.
Other noteworthy reports we are featuring today include Charter Communications (CHTR), Gilead Sciences (GILD) and Honda Motor (HMC).
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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>>>