Top Stock Reports for Microsoft, Amazon.com & Walmart

Tuesday, August 30, 2022

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), Amazon.com, Inc. (AMZN) and Walmart Inc. (WMT). 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 declined -11.4% over the past year against the Zacks Computer - Software industry’s decline of -19.3%. The company’s increased spending on Azure enhancements amid stiff competition in the cloud space from Amazon is likely to dent margins. Nevertheless, the company’s performance is benefiting from strength in its Azure cloud platform amid accelerated global digital transformation.

Teams’ user growth is gaining from continuation of remote work and mainstream adoption of hybrid/flexible work model. Recovery in advertising and job market boosted LinkedIn and Search revenues. Solid uptake of new Xbox consoles is aiding the gaming segment performance.

The company is witnessing growth in user base of its different applications including Microsoft 365 suite, Dynamics and Power Platform. Microsoft expects Surface revenues to grow in the mid-teens range, driven by strong demand for premium devices.

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

Amazon.com shares have declined -25.2% over the past year against the Zacks Internet - Commerce industry’s decline of -33.9%. The company’s growing expenses associated with supply-chain constraints and labor supply shortages remain a concern. However, Amazon is gaining on solid Prime momentum owing to ultrafast delivery services and strong content portfolio. Further, strengthening relationship with third-party sellers is a positive.

Also, growing momentum across Amazon Music is contributing well. Additionally, strong adoption rate of AWS is aiding the company’s cloud dominance. Also, expanding AWS services portfolio is continuously helping Amazon in gaining further momentum among the customers.

Further, robust Alexa skills and expanding smart home products portfolio are positives. Additionally, the company’s strong global presence and solid momentum among the small and medium businesses remain tailwinds.

(You can read the full research report on Amazon.com here >>>)

Walmart shares have declined -8.8% over the past year against the Zacks Retail - Supermarkets industry’s decline of -7.4%. The company’s consolidated operating income and earnings per share view suggest a decline from the year-ago period figures. It is also encountering cost pressure associated with fuel prices, supply chain and excess inventory. Cost inflation and markdowns hurt its gross margin in the second quarter.

However, Walmart has been benefiting from its robust omnichannel operations due to its efforts to enhance both store and online experience. It has been particularly gaining from its efforts to boost delivery services through acquisitions and partnerships.

The company’s U.S. comp sales continued to benefit from an increased market share in grocery in the second quarter of fiscal 2023, wherein the top line grew year over year. Management raised its net sales view for fiscal 2023.

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

Other noteworthy reports we are featuring today include Chevron Corporation (CVX), Novo Nordisk A/S (NVO), and Norfolk Southern Corporation (NSC).

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

Adoption of Cloud & Office 365 Strength Aid Microsoft (MSFT)

Amazon (AMZN) Banks on Growing AWS Adoption & Prime Momentum

Walmart (WMT) Benefits from Impressive E-Commerce Operations

Featured Reports

Chevron (CVX) to Gain from Massive Permian Acreage
The Zacks analyst believes that Chevron's premier position in the Permian Basin positions it for sustainable production ramp-up but is worried about the supermajor's weak reserve replacement ratio.n

Novo Nordisk's (NVO) Diabetes Drugs Aid Growth Amid Rivalry
Per the Zacks analyst, Novo Nordisk has a strong presence in the Diabetes Care market which is driving growth. However, patent expiry on some of the products remains a major concern for the company.

Dividends & Buyback Aid Norfolk Southern (NSC), Fuel Costs Ail
The Zacks analyst likes the shareholder-friendly measures adopted by Norfolk Southern. However, escalating fuel prices are concerning as they are likely to keep the bottom line under pressure.

High Margin Assets & Cost Management Aid Devon Energy (DVN)
Per the Zacks analyst Devon's strong production from its high margins assets and efficient cost management will drive performance over the long run.

TELUS to Benefit From Higher Subscriber Base Amid 5G Boom
Per the Zacks analyst, TU will benefit from increased subscriber base amid expansion of its PureFibre network. Intense competition and high-debt burden remain concerns.

Genuine Parts (GPC) Rides on Buyouts Amid Soaring SG&A Costs
Strategic acquisitions like Lausan and Canol, Steady, Kaman Distribution add to Genuine Parts' top line. Per the Zacks analyst however, high SG&A and R&D costs are likely to dent margins.

Robust Gaming Business Aid Hasbro (HAS), High Costs Hurt
Per the Zacks analyst, Hasbro is benefiting from benefiting from robust performance of its gaming category and a strong product lineup. However, the rise in freight and input costs remains concerning.

New Upgrades

Valero (VLO) Gains On Higher Gulf Coast Refinery Throughput
The Zacks analyst is impressed by Valero's Gulf Coast refineries, contributing the most to its total throughput volumes. Higher Gulf Coast export volumes will also support its margins.

Loan Growth to Keep Aiding East West Bancorp (EWBC) Top Line
Per the Zacks analyst, continued decent rise in the demand for loans will likely support East West Bancorp's revenue growth. Its efficient capital deployments indicate a solid balance sheet.

Solid Insurance in Force, Persistency Drive Radian (RDN)
Per the Zacks analyst, Radian is poised to grow given solid persistency and rise in new mortgage insurance business driving insurance in force, declining delinquency and lower level of claims paid.

New Downgrades

Inflation Woes to Mar Abercrombie & Fitch's (ANF) Performance
Per the Zacks analyst, Abercrombie & Fitch has been witnessing impacts of the ongoing macro environment, including rising inflation and the shift in consumer preference.

High Labor Costs Key Headwind for Fresenius Medical Care (FMS)
Per the Zacks analyst, Fresenius Medical Care's earnings growth was impacted by significantly high labor costs during the second quarter. The trend is likely to continue for the rest of 2022.

Stiff Competition Major Concern for Intuitive Surgical (ISRG)
Per the Zacks analyst, entry of new players in the market for robots used in abdominal surgery is increasing competition in the space. More players are likely to enter the space.

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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report

Microsoft Corporation (MSFT) : Free Stock Analysis Report

Chevron Corporation (CVX) : Free Stock Analysis Report

Novo Nordisk AS (NVO) : Free Stock Analysis Report

Walmart Inc. (WMT) : Free Stock Analysis Report

Norfolk Southern Corporation (NSC) : Free Stock Analysis Report

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