Top Research Reports for Microsoft, Mastercard & ServiceNow

Wednesday, August 9, 2023

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 Microsoft Corporation (MSFT), Mastercard Incorporated (MA) and ServiceNow, Inc. (NOW). 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 >>>

Microsoft shares have gained +36.6% over the year-to-date period against the Zacks Computer - Software industry’s gain of +37.5%. The company is benefited from improvement in Intelligent Cloud and Productivity and Business Processes, offset in part by a decline in More Personal Computing. Strong adoption of Office 365 Commercial solutions drove Productivity and Business Processes revenues.

Continued momentum in the small and medium businesses and frontline worker offerings, as well as gain in revenue per user drove top-line growth. However, More Personal Computing revenues decreased due to weak Windows and Devices businesses. Steady performance in Talent Solutions aided LinkedIn revenues.

However, decline gaming revenues and sluggishness in Azure business have been headwinds. Increasing spend on Azure enhancements amid stiff competition in the cloud space remains a concern.

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

Shares of Mastercard have outperformed the Zacks Financial Transaction Services industry over the past year (+11.9% vs. +3.5%). Company’s numerous acquisitions are helping the company to grow addressable markets and drive new revenue streams.

The COVID-19 crisis accelerated the adoption of digital and contactless solutions, providing an opportunity for MA's business to expedite its shift to the digital mode. It is well-poised to gain from steady cash-generating abilities. A strong capital position allows it to pursue acquisitions and prudently deploy capital via buybacks and dividends.

However, steep operating expenses might stress margins. High rebates and incentives may weigh on net revenues. Its dividend yield is still lower than the industry average. As such, the stock warrants a cautious stance.

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

ServiceNow shares have outperformed the Zacks Computers - IT Services industry over the past year (+7.1% vs. +2.8%). The company has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation. It had 1724 total customers with more than $1 million in annual contract value at the end of the second quarter.

ServiceNow’s expanding global presence, solid partner base and strategic buyouts are positives. New solutions — Automated service suggestions, Service Request Playbook and Workplace Scenario Planning — is helping it win new customers.

Expanding portfolio with new generative AI solution is expected to drive top-line growth. Strategic alliances with the likes of Microsoft remain tailwinds. However, ServiceNow is suffering from high inflation, unfavorable forex, stiff competition, and challenging macro-economic environment.

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

Other noteworthy reports we are featuring today include Lowe's Companies, Inc. (LOW), GSK plc (GSK) and Arthur J. Gallagher & Co. (AJG).

Director of Research

Sheraz Mian

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

Adoption of Office 365 & Strength in Cloud Aids Microsoft (MSFT)

Accretive Buyouts, Strong Balance Sheet Aid Mastercard (MA)

Growing Customer Base & Partnerships Aid ServiceNow (NOW)

Featured Reports

Lowe's (LOW) Total Home Strategy Boosts Sales, High Debt Ails
Per the Zacks analyst, Lowe's Total Home strategy, omni-channel efforts and merchandising initiatives are likely to keep boosting sales. However, the company's high debt level remains a concern.

GSK (GSK) Vaccine & HIV Products to Drive Sales Growth
GSK's key products like Dovato, Nucala, Shingrix and Juluca are driving sales. The Zacks analyst believes GSK has some promising new products in Specialty Medicines and Vaccines areas.

Arthur J. Gallagher (AJG) Buyouts Aid, Cost Woes Linger
Per the Zacks analyst, a number of acquisitions have helped Arthur J. Gallagher to enhance its capabilities and drive growth. However, elevated expenses remain an overhang.

Investments, Clean Generation Focus Aid PPL Corporation (PPL)
Per the Zacks analyst, PPL's investment of $12 billion through 2026, will strengthen its infrastructure. Its Narragansett Electric acquisition will help toward a cleaner energy future and boost margin

Strong Demand for Products Aids The Cooper Companies (COO)
Per the Zacks analyst, The Cooper Companies witnessed strong demand for its products across several segments during the first quarter. The trend is likely to continue boosting the company's prospect.

A Rise in Revenues to Support Carlyle (CG), High Costs Ail
Per the Zacks analyst, decent AUM growth and expansion efforts are expected to drive Carlyle's top-line growth. Yet, mounting expenses and high debt levels are some of the major near-term headwinds.

Air Travel Demand Aids American Airlines (AAL), Costs Ail
Upbeat air-travel demand is driving American Airlines' top line. The Zacks analyst is, however, worried about escalated labor costs that are limiting bottom-line growth.

New Upgrades

Growth in Industrial Technologies Aids Ingersoll Rand (IR)
The Zacks analyst is encouraged by growth in the Industrial Technologies unit due to higher orders across the product portfolio of compressors, vacuum and blowers, and power tools and lifting.

Strong Growth in U.S. Operations & Buyouts Aid EMCOR (EME)
Per the Zacks analyst, strong performance in all the United States operations, on the back of solid growth in RPOs, and accretive acquisitions benefit EMCOR's business.

Xifaxan Boosts Bausch (BHC), Efforts to Restructure Look Good
Per the Zacks analyst, Bausch maintains momentum on trong growth of Xifaxan. The company's efforts to restructure business by separating eye health business and reduce debt are encouraging.

New Downgrades

Upstream Budget Tightness to Hurt Patterson-UTI Energy (PTEN)
The Zacks analyst believes that the tightness in the upstream companies' investment budget is likely to continue through this year, which is expected to weigh on Patterson-UTI Energy's revenues.

High Costs to Weigh On BorgWarner's (BWA) Near-Term Margins
High costs and capital expenditure associated with electrification-related programs is likely to limit BorgWarner's operating margins and FCF in 2023, making the Zacks analyst bearish on the stock.

Dismal Contract Sales Hurt Marriott Vacations (VAC) Prospects
Per the Zacks analyst, Marriott Vacations operations are likely to be hurt by dismal contract sales and fall in volume per guest. Also, uncertain macro environment and high costs are a headwind.

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GSK PLC Sponsored ADR (GSK) : Free Stock Analysis Report

Microsoft Corporation (MSFT) : Free Stock Analysis Report

Mastercard Incorporated (MA) : Free Stock Analysis Report

Lowe's Companies, Inc. (LOW) : Free Stock Analysis Report

Arthur J. Gallagher & Co. (AJG) : Free Stock Analysis Report

ServiceNow, Inc. (NOW) : Free Stock Analysis Report

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