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Top Analyst Reports for Microsoft, Procter & Gamble & QUALCOMM

Monday, January 4, 2021

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 (MSFT), Procter & Gamble (PG) and QUALCOMM (QCOM). 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 outperformed the S&P 500 over the past year (+39.9% vs. +17.7%). The Zacks analyst believes that Microsoft is benefiting from momentum in Azure, impressive Teams user growth triggered by coronavirus-led digital transformation, work-from-home, online learning wave and tele healthcare trends.

Solid uptake of Surface devices and Xbox Game Pass is expected to boost growth. Further, the company is gaining from a growing user base of its different applications including Microsoft 365 suite, and Dynamics. Additionally, it is well positioned to expand the total addressable market through acquisitions of GitHub and ZeniMax Media.

However, broad-based macroeconomic weakness in the job market and lower spend on advertising due to the coronavirus pandemic are likely to put pressure on LinkedIn and Search revenues. Also, delays in consulting business are anticipated to limit growth. 

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

Shares of Procter & Gamble have gained +14.5% in the last six months against the Zacks Soap and Cleaning Materials industry’s gain of +12.6%. The Zacks analyst believes that the nature of Procter & Gamble’s business led to increased consumer demand for its hand soaps, detergents and surface cleaning products during the pandemic.

The company’s solid first-quarter fiscal 2021 earnings mark the continuation of its earnings surprise trend. Earnings and sales improved year over year in the reported quarter on gains from significant sales increase, related fixed cost leverage and ongoing productivity efforts.

Cost savings aided core currency-neutral gross and operating margin, which expanded 170 bps and 350 bps, respectively. Driven by the robust results, the company raised its outlook for fiscal 2021. However, currency headwinds are likely to affect results in fiscal 2021. Also, stiff competition remains a woe.

(You can read the full research report on Procter & Gamble here >>>)

QUALCOMM’s shares have gained +27.8% over the past three months against the Zacks Wireless Equipment industry’s rise of +20.1%. The Zacks analyst believes that with the rollout of 5G technology, Qualcomm is benefiting from investments toward building a licensing program in mobile.

The company is focused on retaining its leadership in the 5G chipset market and mobile connectivity. It resolved a dispute with Huawei and inked a new long-term patent license agreement, which augurs well for long-term revenues.

Qualcomm launched low-priced 5G chips for the masses for a seamless transition to 5G while delivering low-power resilient multi-gigabit connectivity. However, lower handset shipments due to the COVID-19 pandemic remain a near-term headwind. Qualcomm is expected to face softness in demand from China.

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

Other noteworthy reports we are featuring today include T-Mobile US (TMUS), Amgen (AMGN) and Automatic Data Processing (ADP).

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>

Mark Vickery
Senior Editor


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

Microsoft (MSFT) Gains From Adoption of Azure & Teams App

P&G’s (PG) Productivity & Cost Savings Plan to Aid Margins

Qualcomm (QCOM) Remains Poised to Benefit from 5G Chips

Featured Reports

T-Mobile (TMUS) Rides on Network Strength Amid Competition

Per the Zacks analyst, T-Mobile is well-positioned to benefit from the largest nationwide 5G network that covers more than 270 million people across 1.4 million square miles.

Amgen (AMGN) Rides on Solid Pipeline and Regular Deals

Amgen expects several important data readouts from its pipeline in the near term. It also pursues external opportunities as evident from the purchase of Otezla and the stake in China’s BeiGene.

ADP Rides on Strategic Buyouts Amid Technological Challenges

The Zacks analyst likes ADP’s buyout strategy to boost its position in the human capital management market.

Low Costs Aid CSX Amid Coronavirus-Led Weakness in Volumes

Per the Zacks analyst, reduction in costs, mainly due to low fuel prices and increased operational efficiency, is partly offsetting CSX’s revenue declines from the coronavirus-led volume softness.

End Markets & Inorganic Moves to Aid ABB Amid Pandemic woes

Per the Zacks analyst, ABB is poised to gain from strength in multiple end markets including food & beverage, transport, and e-mobility.

Investments Aid Edison International (EIX), Rising Costs Ail

Per the Zacks analyst, systematic capital investment boosts Edison International’s infrastructure and customer reliability. Yet, increasing wildfire-related charges are hurting its credit rating.

Baker Hughes (BKR) Gains From LNG Terminal Supply Contracts

Per the Zacks analyst, Baker Hughes is well placed to capitalize on multiple LNG terminal contracts around the globe. However, conservative upstream spending hurts its oilfield services.

New Upgrades

Solid Market Demand in Rental Fleet Aids United Rentals (URI)

Per the Zacks analyst, United Rentals is benefitting from rising demand for specialty construction products and used equipment. Notably, the demand for post-pandemic-led restrictions is encouraging.

Strategic Initiatives Aid Growth at Tenet Healthcare (THC)

Per the Zacks analyst, its solid inorganic growth story on the back of a number of acquisitions and strategic alliances over the past few years have helped the business grow its scale of business.

WESCO (WCC) Benefits From Supply Strength & Contract Wins

The Zacks analyst believes that strength in supply chain solutions in cloud and data center remain tailwinds. Also, contributions from acquisitions and contract wins will continue to drive growth.

New Downgrades

Escalating Expenses, High Leverage Hurt Centene (CNC)

Per the Zacks analyst, its operating expense level, which has been increasing over the past years, continues to weigh down the margins. Also, its balance sheet position remains a concern.

Weak Advertising Demand Hurts ViacomCBS’ (VIAC) Prospects

Per the Zacks analyst, ViacomCBS is suffering from sluggish advertising demand and lowered budgets due to coronavirus outbreak, in addition to production delays in television and film programming.

Weak Demand, Lower Commodity Prices Ail Univar (UNVR)

Per the Zacks analyst, soft demand due to weakness in global industrial markets will hurt the company’s top line. It also faces a headwind from lower pricing in certain bulk commodities.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
TMobile US, Inc. (TMUS): Free Stock Analysis Report
QUALCOMM Incorporated (QCOM): Free Stock Analysis Report
Procter & Gamble Company The (PG): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
Amgen Inc. (AMGN): Free Stock Analysis Report
Automatic Data Processing, Inc. (ADP): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.