Monday, May 14, 2018
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 Mastercard (MA), NVIDIA (NVDA) and Danaher (DHR). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Strong-Buy ranked Mastercard’s shares have increased 63.6% over the last year, significantly outperforming the Zacks Financial Transaction Services industry’s gain of 37.4% during the same period. Mastercard’s earnings beat expectations and surged 43% year over year. Better-than-expected results were primarily backed by higher switched transactions, increase in cross-border volume and gross dollar volume as well as gains from acquisitions.
The Zacks analyst thinks the company is well placed for growth, given its solid market position, ongoing expansion and digital initiatives plus significant opportunities from the secular shift toward electronic payments. The buyouts of VocaLink and NuData Security complement the company’s efforts to participate in new payment flows and enhance its safety and security offerings.
The stock has seen the Zacks Consensus Estimate for current-year earnings being revised upward over the last 30 days. However, escalating costs continue to bother. Also, higher incentives and rewards will put pressure on its bottom line.
Shares of NVIDIA have surged in the last one year, gaining +89.5% versus the Zacks General Semiconductor industry’s +57.4% gain, thanks to the company’s positive record of earnings surprises in the recent quarters. NVIDIA posted a stellar first quarter and provided encouraging second-quarter fiscal 2019 revenue guidance.
Also, the company registered year-over-year growth on both the counts, primarily stemming from growth across all four platforms. Also, higher-than-anticipated demand for its gaming chips helped drive the encouraging results. Furthermore, the Zacks analyst thinks NVIDIA’s innovative product pipeline and strength in gaming and high-end notebook GPUs keep it well positioned.
Higher adoption of NVIDIA’s Volta processors is also likely to act as a catalyst in the near term. Nevertheless, a recent development like suspension of test drives for all its driverless vehicles and likely sluggish demand from cryptocurrency miners leads to caution about its near-term performance.
Buy-ranked Danaher’s shares have gained +10.1% over the past six months, outperforming the Zacks Diversified Operations industry, which has declined -5.5% over the same period. Danaher’s first-quarter 2018 adjusted earnings beat expectations by 6.5% and improved 16.5% year over year.
The company’s core revenue growth, margin expansion and earnings growth during the reported quarter came on the back of its operating culture DBS. The Zacks analyst is optimistic about the company’s core revenue and earnings growth, on the back of improving order trends and rising healthcare spending. Its recent acquisitions – Pall and Cepheid – are proving to be strong profit churners, and will boost core revenues in the quarters ahead.
This apart, the company’s continuous introduction of products enables it to penetrate new markets and gain competitive edge in existing ones. However, sluggish economic conditions across some key operating regions and unfavorable currency translations pose as significant headwinds.
Other noteworthy reports we are featuring today include Occidental Petroleum (OXY), Automatic Data Processing (ADP) and Altria (MO).
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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
The Zacks analyst believes Occidental will continue to benefit from its high-margin production and focus on resource rich Permian Resource region.
The Zacks analyst believes that acquisitions of WorkMarket and Global Cash Card will help ADP to expand business, strengthen client base and boost top-line growth.
Per the Zacks analyst, Intercontinental Exchange's focus on boosting its already strong product and service lines will continue to contribute to top-line growth, thus driving overall performance.
Per the Zacks analyst, Blackstone will continue to witness rise in assets under management (AUM), aided by increasing inflows. However, higher debt level lowers sustainability of its dividend payout.
Per the Zacks analyst, Fortive's top-line growth is driven by benefits from acquisitions. However, integration issues remain a concern.
The Zacks analyst appreciates Simon Property's efforts to revamp its properties and expand its portfolio.
Per the Zacks analyst, EA's top-line growth is driven by expanding digital business backed by live services and mobile games.
The Zacks analyst believes that acquisition of Avention is helping Dun & Bradstreet to expand its share in the Sales Acceleration market, thus boosting top-line growth.
Per the Zacks analyst, solid demand for revenue cloud offering and expanding customer base, which now includes AstraZeneca benefits Model N.
The Zacks analyst believes that HollyFrontier's incentive distribution rights (IDR) simplification deal with its partnership will help it to manage operations efficiently and improve payout.
Per the Zacks analyst, Altria's performance remains eclipsed by lower cigarette volumes, stemming from regulatory hurdles. Notably cigarette volumes fell 4.2% year over year in the first-quarter.
Per the Zacks analyst, Consumer Beauty unit remained a hurdle for Coty in third quarter, as organic sales fell due to soft global mass beauty market. Coty expects recovery at this unit to take time.
Per the Zacks analyst, MoneyGram's revenues suffers from challenging U.S. to U.S. market, aggressive market pricing and competition. Costs incurred on compliance to regulations will hurt margins.
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Occidental Petroleum Corporation (OXY): Free Stock Analysis Report
NVIDIA Corporation (NVDA): Free Stock Analysis Report
Altria Group, Inc. (MO): Free Stock Analysis Report
Mastercard Incorporated (MA): Free Stock Analysis Report
Danaher Corporation (DHR): Free Stock Analysis Report
Automatic Data Processing, Inc. (ADP): Free Stock Analysis Report
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