Top Analyst Reports For Intel, Adobe & Mondelez
Zacks Investment Research | Sep 13, 2019 03:26AM ET
Friday, September 13, 2019
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 Intel (INTC), Adobe Systems (ADBE) and Mondelez (NASDAQ:MDLZ) International (MDLZ). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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Intel’s shares have outperformed the Zacks General Semiconductor industry over the past three months (3% vs. 2.5%). The Zacks analyst thinks that Intel is benefiting from rising demand witnessed in its higher performance products, both in data center and client domains.
Moreover, synergies from the Mobileye (F:0ME) acquisition and growing clout in ADAS market favor the company’s growth prospects. Further, Intel’s strategy of expanding TAM beyond CPU to adjacent product lines like silicon photonics, fabric, network ASICs and 3D XPoint memory is yielding results. Moreover, the launch of new 10 nm technology-based AI chip, Springhill, holds promise. Notably, shares of the company have outperformed the industry in the past year.
However, weakness in demand from China and softness in NAND flash pricing trends, expenses pertaining to 10-nanometer (nm) ramp up and constrained supply remain major concerns. Moreover, intensifying competition and pricing pressure from AMD remains a headwind.
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Shares of Adobe have gained 3.8% in the past six months, outperforming the Zacks Software industry’s rise of 11.4%. The Zacks analyst believes that Adobe's strong demand for its creative products are driving its top-line growth. Also, the company’s Adobe Document Cloud and Adobe Experience Cloud products, along with growing subscription for cloud application are positives.
The company has been making great efforts toward establishing its presence in cloud-related software areas such as documents and marketing. We remain optimistic about Adobe’s market position, compelling product lines, continued innovation, solid adoption of Creative Cloud and Adobe marketing cloud.
However, lower end-market demand and exposure to Europe remain as overhangs. Further, high acquisition expenses do not bode well for the company's margin expansion.
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Mondelez’s shares have gained 36.9% year to date, outperforming the Zacks Food Preparation industry’s rise of 16.3% over the same period.
The Zacks analyst believes that the company is steadily gaining from strategic pricing endeavors. In fact, during the second quarter of 2019, balanced pricing and volume/mix aided organic revenues to rise 4.6%. Additionally, it is progressing well with saving efforts. Mondelez also focuses on brand building through innovation and acquisitions.
It recently completed the buyout of minority stakes in Perfect Snacks. This, along with investments in Hu Master and Uplift Foods, indicates the company’s efforts to boost healthy offerings. It is also bolstering presence in the emerging regions.
However, the company grapples with adverse currency movements, which dented top-line performance during the second quarter. Management expects currency fluctuation to be a drag in 2019. Further, high input costs are concerns.
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Other noteworthy reports we are featuring today include Morgan Stanley (NYSE:MS) (MS), Arista Networks (ANET) and DENTSPLY SIRONA (XRAY).
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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
Today's Must Read/h6
Featured Reports/h6
Per the Zacks analyst, efforts to strengthen wealth management business and corporate lending will support Morgan Stanley.
DENTSPLY has been gaining from the core Technology & Equipment unit. The Zacks Analyst is however apprehensive of the persistent foreign exchange headwinds.
Per the Zacks analyst, KBR's robust backlog, strength in Government Services unit and accretive acquisitions are driving its top and bottom lines.
Per the Zacks analyst, Arista is well poised to benefit from the healthy growth dynamics and solid order trends for scalable infrastructure and industry-leading products.
Per the Zacks analyst, Watts Water is likely to gain additional mileage from the execution of a smart and connected product strategy, while focusing on a holistic growth model for margin expansion.
Per a Zacks analyst, Colfax (CFX) will gain from DJO Global buyout (February 2019) and the divestment of Air and Gas Handling business (to be complete in 2H19).
Per the Zacks analyst, L Brands inability to keep up with changing consumer preferences and merchandising actions led to Victoria's Secret's failure.
Per the Zacks analyst, efforts to strengthen wealth management business and corporate lending will support Morgan Stanley.
DENTSPLY has been gaining from the core Technology & Equipment unit. The Zacks Analyst is however apprehensive of the persistent foreign exchange headwinds.
Per the Zacks analyst, KBR's robust backlog, strength in Government Services unit and accretive acquisitions are driving its top and bottom lines.
Per the Zacks analyst, Arista is well poised to benefit from the healthy growth dynamics and solid order trends for scalable infrastructure and industry-leading products.
Per the Zacks analyst, Watts Water is likely to gain additional mileage from the execution of a smart and connected product strategy, while focusing on a holistic growth model for margin expansion.
Per a Zacks analyst, Colfax (CFX) will gain from DJO Global buyout (February 2019) and the divestment of Air and Gas Handling business (to be complete in 2H19).
Per the Zacks analyst, L Brands inability to keep up with changing consumer preferences and merchandising actions led to Victoria's Secret's failure.
New Upgrades/h6
Per the Zacks analyst, MDU Resources' consistent and disciplined approach to the acquisition of well-managed companies and properties is expected to drive performance.
The Zacks analyst believes that NuStar's oil pipeline network in the prolific Permian Basin is expected to drive meaningful revenue upside given the region's attractive production growth.
Per the Zacks analyst, Alleghany should benefit from continued solid underwriting performances by TransRe and RSUI, CapSpecialty and PacificComp. Better pricing, strategic buyouts add to the upside.
Per the Zacks analyst, MDU Resources' consistent and disciplined approach to the acquisition of well-managed companies and properties is expected to drive performance.
The Zacks analyst believes that NuStar's oil pipeline network in the prolific Permian Basin is expected to drive meaningful revenue upside given the region's attractive production growth.
Per the Zacks analyst, Alleghany should benefit from continued solid underwriting performances by TransRe and RSUI, CapSpecialty and PacificComp. Better pricing, strategic buyouts add to the upside.
New Downgrades/h6
The Zacks Analyst believes that increasing expenses resulting from acquisitions are likely to weigh on ABM Industries' bottom line.
Per the Zacks analyst, Ligand's dependence on a single supplier for its major revenue generating technology, Captisol, is a concern as any supply interruption will adversely effect Ligand's results.
Per the Zacks Analyst, higher maintenance costs owing to annual shutdowns of major facilities, rising raw material costs and unfavorable foreign currency will impact Domtar's results.
The Zacks Analyst believes that increasing expenses resulting from acquisitions are likely to weigh on ABM Industries' bottom line.
Per the Zacks analyst, Ligand's dependence on a single supplier for its major revenue generating technology, Captisol, is a concern as any supply interruption will adversely effect Ligand's results.
Per the Zacks Analyst, higher maintenance costs owing to annual shutdowns of major facilities, rising raw material costs and unfavorable foreign currency will impact Domtar's results.
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