Friday, August 7, 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 Adobe Systems (ADBE), Abbott Laboratories (ABT) and Barrick Gold (GOLD). 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 >>>
Adobe shares have outperformed the Zacks Software industry year to date (+38.2% vs. +30.4%). The Zacks analyst is optimistic about Adobe’s market position, compelling product lines, solid adoption of Creative Cloud and Adobe marketing cloud.
Adobe is benefiting from strong demand for its creative products. Its 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. Further, high acquisition expenses do not bode well for margin expansion.
(You can read the full research report on Adobe here >>>)
Shares of Abbott have gained +15.6% over the past six months against the Zacks Medical Products industry’s fall of -7.5%. The Zacks analyst believes that the branded generics and international diabetes businesses should drive growth in the coming quarters. New product launches and acquisitions should boost sales further.
Abbott posted better-than-expected numbers for the second quarter. However, the figures declined year over year. Despite $615 million of COVID-19 diagnostic testing-related sales, this year-over-year decline was primarily due to the pandemic-led fall in procedure volumes in many businesses.
However, the company’s Diabetes Care, Nutrition, and EPD arms collectively grew more than 9% in the first half of 2020 leveraging on the pandemic situation. Apart from the launch of COVID-19 tests, the company also obtained FDA for Libre 2 as an iCGM. It also received CE Mark for TriClip.
(You can read the full research report on Abbott here >>>)
Barrick Gold shares have gained +5.2% over the past three months against the Zacks Mining – Gold industry’s rise of +20.1%. The Zacks analyst believes that Barrick’s debt-reduction actions are expected to lower interest expenses. It also has a strong liquidity position and generates healthy cash flows.
Annual earnings estimates for Barrick have been moving up over the past month. The company is expected to gain from progress of its key growth projects. A significant portion of its exploration budget has been allocated to the Americas.
Moreover, its merger with Randgold and joint venture with Newmont provide additional upside. The joint venture combines the respective mining operations, assets, reserves and resources. The merger also formed an industry-leading gold company. Higher gold prices are also likely to support margins. Barrick also has extensive regional presence across many of the world’s most prolific gold districts.
(You can read the full research report on Barrick Gold here >>>)
Other noteworthy reports we are featuring today include HSBC Holdings (HSBC), Stryker (SYK) and Square (SQ).
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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>>>
Today’s Must Read
Featured Reports
Restructuring to Aid HSBC Holdings (HSBC) Amid Low Rates
Per the Zacks analyst, HSBC Holdings is poised for growth given its efforts to reshape business and reduce costs.
Core MedSurg Unit Aids Stryker (SYK), Pricing Pressure Ails
Per the Zacks analyst, Stryker continues to gain from solid prospects of its core MedSurg arm.
Square (SQ) Banks on Solid Cash App Adoption, Bitcoin Growth
Per the Zacks analyst, Square is benefiting from strong Cash App engagement and its growing active customer base.
Micron (MU) Benefits from Growing Memory-Chip Demand
Per the Zacks analyst, Micron is growing on solid memory-chip demand from data-center operators as the coronavirus crisis has boosted the work-and-learn-from-home and online services trends.
Buyouts, Diversification Aid Moody’s (MCO), High Costs a Woe
Per the Zacks analyst, synergies from acquisitions and efforts to diversify revenues will likely aid Moody’s. Yet, mounting operating costs and pricing pressure due to stiff competition are concerns.
Republic Services (RSG) Rides on Operational Efficiency Move
The Zacks analyst is impressed by Republic Services’ operational efficiency move to shift to compressed natural gas collection vehicles and convert rear-loading trucks to automated-side loaders.
Gabocom Buyout Aids Aptiv (APTV) Amid Weak Demand Situation
Per the Zacks Analyst, gabocom acquisition has enhanced Aptiv’s position in the telecommunications market. However, coronavirus-led weak global vehicle production remains a concern.
New Upgrades
Tyson Foods (TSN) Gains From Retail Demand Amid COVID-19
Per the Zacks analyst, Tyson Foods (TSN) is gaining from burgeoning demand in its retail channel amid COVID-19. Notably, core retail line volumes rose more than 26% in fiscal third-quarter.
Diverse Timberland, Housing Construction Aids Rayonier (RYN)
The Zacks Analyst appreciates Rayonier’s geographical diversity and strategic buyouts. Rebound in housing construction activity and rise in wood products prices will likely drive log prices.
Central Garden & Pet’s (CENT) Strategic Buyouts Bode Well
Per the Zacks analyst, Central Garden & Pet has been gaining from its recent acquisitions. Notably, acquisitions contributed about $10 million of sales during the third quarter of fiscal 2020.
New Downgrades
On-Trade Business Disruptions Mar Diageo’s (DEO) Volumes
Per the Zacks analyst, Diageo’s soft volume in second-half fiscal 2020 due to the widespread closure of bars and restaurants (on-trade channel) worldwide and disruption to global travel hurt revenues.
BioDelivery (BDSI) Q2 Sales Suffer Amid COVID-19 Restrictions
Per the Zacks analyst, sales of key drugs in BioDelivery’s portfolio, Belbuca and Symproic, were hurt due to stay-in-home and travel restrictions during the second quarter.
Gulfport (GPOR) Hurt by High Debt, Borrowing Base Reduction
The Zacks analyst believes that Gulfport Energy’s high debt-to-capitalization of 89.2% is a concern. Further, a recent reduction in the company’s borrowing base has left it with little liquidity.
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