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Research Daily

Friday, May 22, 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 NIKE (NKE), Workday (WDAY) and Allstate (ALL). 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 >>>

NIKE’s shares have outperformed the Zacks Shoes and Retail Apparel industry over the past year (+13.4% vs. +11%). The Zacks analyst believes that the use of its digital ecosystem as a key playbook to combat the COVID-19 crisis, has been receiving applause.

Notably, the company retained its positive earnings track record, with earnings and sales beat in third-quarter fiscal 2020. The NIKE Direct business displayed strength backed by more than 30% digital revenue growth across all geographies and Converse.

Nevertheless, the effects of store closures in China due to outbreak hurt Greater China’s revenues in third-quarter fiscal 2020. This resulted in lower sales mix in Greater China, which is its high margin geography, causing gross margin decline in the quarter. Further, the company expects soft results in the fiscal fourth quarter due to store closures.

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

Shares of Workday have lost -5.5% over the past six months against the Zacks Internet Software industry’s rise of +23.8%. The Zacks analyst believes that the company is likely to benefit from solid adoption of subscription and professional software solutions.

The buyout of Adaptive Insights is enabling it to help enterprises in making better business decisions with Adaptive Insights business planning cloud, which bodes well for its prospects. Further, extended capabilities and tools in Workday HCM and Workday Financial Management to enhance customer experience is a positive.

Workday’s foray into the platform-as-a-service market by launching the Workday Data-as-a-Service Platform also holds promise. However, stiff competition from Oracle and SAP is likely to limit margin expansion at least in the near term. Increasing investments on product enhancements are likely to put pressure on the bottom line.

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

Allstate’s shares have lost -23% over the past three months against the Zacks Insurance - Property and Casualty industry’s fall of -22.8%. The Zacks analyst believes that it is poised to grow on the back of its solid property and liability segment.

A number of initiatives that it took to improve profitability in its auto segment are now driving growth. A strong balance sheet and intelligent capital management are impressive. Acquisitions made recently should aid its inorganic growth.

Its thriving service business provides a diversified revenue stream. However, it is exposed to catastrophe losses. Escalating expenses might weigh on margins too. Low interest rates stress investment income as well. Further, the COVID-19-led decline in GDP and unemployment might affect premiums.  

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

Other noteworthy reports we are featuring today include Synopsys (SNPS), The Travelers Companies (TRV) and HP (HPQ).

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Sheraz Mian

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>>>

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