Today's Must Read
Adobe (ADBE) Rides on Creative Strength; Expenses A Concern
BP plc (BP) Banks on Key Upstream Projects, Refining Weak
Thursday, June 11, 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 Facebook (FB), Adobe Systems (ADBE) and BP p.l.c. (BP). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Facebook’s shares have outperformed the S&P 500 over the past year (+35.3% vs. +10.8%). The Zacks analyst believes that Facebook is benefiting from growth in Instagram Stories and Feed, and expanding user base in the Asia Pacific.
The company helped people connect during the coronavirus pandemic. Notably, voice and video calling more than doubled on Messenger and WhatsApp. The launch of Messenger Rooms for video call, which can accommodate 50 people, and WhatsApp video support for up to eight users are noteworthy in this regard. Further, the GIPHY buyout will boost user engagement.
However, Facebook expects ad-sales to be hurt by weakness in travel and automotive industry. The company didn’t provide any specific revenue guidance for the second quarter of 2020 as well as the full year. Moreover, higher operating expense is expected to dent the operating margin in 2020 due to sluggish revenue growth.
Shares of Adobe have gained +32.9% over the past six months against the Zacks Software industry’s rise of +19.4%. The Zacks analyst is optimistic about Adobe’s market position, compelling product lines, continued innovation, solid adoption of Creative Cloud and Adobe marketing cloud. Adobe is benefiting from strong demand for its creative products.
The company’s Creative Cloud, Document Cloud and Adobe Experience Cloud products are driving the top-line growth. Further, rising subscription revenues and solid momentum across the mobile apps are major positives.
Additionally, growth in emerging markets, robust online video creation demand and improving average revenue per user are tailwinds. However, lower end-market demand and exposure to Europe remain overhangs. High acquisition expenses do not bode well for its margin expansion.
BP’s shares have gained +22.3% over the past three months against the Zacks International Integrated Oil industry’s rise of +28.7%. The Zacks analyst believes that the company’s decision to cut workforce, will significantly strengthen the firm’s financials. This will make the firm smaller & more competitive.
BP has a strong portfolio of upstream projects which has been backing impressive production growth. Since 2016, BP has placed 23 key upstream projects online. All the key projects BP has been delivering over the years backed the company to post record production levels. Notably, despite the coronavirus pandemic, BP has been progressing with its key upstream projects that will help the firm boost production by 900 Mboe/d within 2021.
But, since the virus outbreak has hurt global fuel demand, BP expects refinery utilizations to decline in June quarter. Also, BP’s huge debt exposure is concerning. Moreover, in 2020, the firm expects Gulf of Mexico oil spill payments to be less than $1 billion.
Other noteworthy reports we are featuring today include JPMorgan Chase (JPM), Boeing (BA) and Sony (SNE).
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>>>