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Research Daily

Friday, March 27, 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 Apple (AAPL), Cisco Systems (CSCO) and PepsiCo (PEP). 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’s shares have outperformed the S&P 500 over the past six months (+15.4% vs. -11.6%). The Zacks analyst believes that the company is benefiting from a steady momentum in the Services segment, driven by strong App Store sales and the robust adoption of Apple Music and Apple Pay.

The company recently launched new iPad and MacBook. Solid adoption of Apple Watch and AirPod are expected to drive its top line. However, it doesn’t expect to achieve its second-quarter revenue guidance due to supply chain disruption amid the coronavirus outbreak, which is expected to hurt iPhone sales. This, in turn, will likely dent investor confidence in the near term.

The company has limited online iPhone purchases to two per person due to the coronavirus-led shortage. Moreover, the company’s intensifying legal woes due to antitrust investigations and App Store-related lawsuits raise a concern.

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

Shares of Cisco have lost 24% over the past year against the Zacks Computer Networking industry’s fall of 24.2%. The Zacks analyst believes that Cisco is benefiting from solid security business. Increasing demand for collaborative solutions, which includes WebEx Teams, post the coronavirus outbreak is positive.

Moreover, a strong uptake of Catalyst 9000 family of switches and Nexus 9K solutions is a key catalyst. Integration with Microsoft Azure, Office 365 and Amazon Web Services is expected to fortify footprint in the cloud space.

Despite a grim third-quarter fiscal 2020 outlook, the company’s differentiated end-to-end approach across the network, cloud and endpoints is a major driver for the rest of fiscal 2020. However, lower customer spending, China-related weakness and a growing global economic uncertainty due to the unabated spread of coronavirus are major headwinds.

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

PepsiCo’s shares have lost 12.7% over the past three months against the Zacks Soft Drinks Beverages industry’s fall of 18.1%. The Zacks analyst believes that the company is on track to deliver its productivity savings goal of at least $1 billion annually through 2023.

The company reported earnings and sales beat in fourth-quarter 2019, driven by strength in all segments, robust pricing and volume. This marked the continuation of positive surprise trend, surpassing earnings and sales estimates four times in a row.

Also, recent product launches depict its progress with the expansion of its snacking business. However, the company is grappling with higher SG&A expenses, which is hurting the operating margin. Adverse currency rates are also likely to hurt the company’s results in 2020. Moreover, industry headwinds and stiff competition are concerns.

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

Other noteworthy reports we are featuring today include McDonald's (MCD), AstraZeneca (AZN) and NextEra Energy (NEE).

The Hottest Tech Mega-Trend of All

Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

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>>>

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