Top Stock Reports for Adobe, Costco & Union Pacific

Sheraz Mian
6 min read
0

Thursday, October 8, 2020

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 Adobe (ADBE), Costco Wholesale (COST) and Union Pacific (UNP). 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 >>>

Adobe shares have outperformed the Zacks Software industry in the year to date period (+49.5% vs. +32%). The Zacks analyst is optimistic about Adobe’s market position, compelling product lines, continued innovation, solid adoption of Creative Cloud and Adobe marketing cloud. Adobe is gaining from strong demand for its creative products.

The company’s Creative Cloud, Document Cloud and Adobe Experience Cloud products are driving the top-line growth. Further, rising subscription revenues and solid momentum across mobile apps are major positives. Additionally, growth in emerging markets, robust online video creation demand and improving average revenue per user are tailwinds.

However, lower end-market demand is a concern. Further, significant exposure in Europe is an overhang due to foreign currency headwinds. Additionally, high acquisition expenses do not bode well for margin expansion.

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

Shares of Costco have gained +22.3% over the past year against the Zacks Discount Retail industry’s rise of +17.2%. The Zacks analyst believes that the company’s growth strategies, better price management, decent membership trends and increasing penetration of e-commerce business reinforce its position.

Being an essentials retailer, Costco has been benefiting from the coronavirus-induced spike in demand. Cumulatively, these factors have been aiding in registering impressive sales and earnings numbers. Costco put up a stellar performance in fourth-quarter fiscal 2020, wherein both the top and the bottom line beat the Zacks Consensus Estimate and grew year over year.

It also maintained decent comparable sales run. However, Costco witnessed incremental expenses related to COVID-19 for the second quarter in row. Such investments or aggressive pricing strategy are likely to exert pressure on the margins.

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

Union Pacific shares have gained +37.6% over the past six months against the Zacks Rail industry’s rise of +34.5%. The Zacks analyst expects Union Pacific's third-quarter 2020 results to be hurt by tepid freight revenues as was the case in the first two quarters of the year.

Notably, the metric was down 14% in first-half 2020. The same is being hurt, mainly by coronavirus-induced depressed volumes. Notably, overall volumes are likely to decline around 10% in the current year. However, reduced costs, courtesy of the precision scheduled railroading model, are likely to have aided the bottom line in the September quarter.

Moreover, akin to the first two quarters, the company is likely to have generated impressive free cash flow in the to-be-reported quarter. Notably, free cash flow surged 58.9% in the first six months of 2020. Also, its parcel business is likely to have performed well owing to the buoyancy in e-commerce demand.

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

Other noteworthy reports we are featuring today include Roche (RHHBY), NextEra Energy (NEE) and Altria Group (MO).

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.

Click here for the 6 trades >>

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

Adobe (ADBE) Rides on Growing Adoption of Cloud Applications

Decent Comps to Fuel Costco's (COST) Sales, Cost a Concern

Union Pacific (UNP) Banks on Cost Saving Amid Weak Volumes

Featured Reports

New Drugs Propel Roche (RHHBY) Amid Biosimilar Competition

Per the Zacks analyst, Roche maintains momentum on the back of solid sales of new drugs like Ocrevus, Tecentriq and Hemlibra.

Investment in Renewable & Infrastructure Aid NextEra (NEE)

Per the Zacks analyst, NextEra's planned investment in the range of $50 to $55B through 2022 to enhance clean electricity generation and strengthen its infrastructure will boost its profitability.

Altria (MO) to Benefit From Solid Oral Tobacco Products Unit

Per the Zacks analyst, Altria is set to gain on efforts to expand the oral tobacco products unit, wherein revenues rose 9.6% in the second quarter.

Expansion Strategy Aids Equinix (EQIX) Amid Stiff Competition

Per the Zacks analyst, the expansion on the back of acquisitions and development will enhance Equinix's global data-center footprint.

Dominion (D) Gains from Investment, Share Dilution a Concern

Per the Zacks analyst Dominion's ongoing initiatives to fortify infrastructure and $23.9B investment in the next three years will boost performance.

Applied Materials (AMAT) Rides on Foundry & Logic Spending

Per the Zacks analyst, strength in semiconductor equipment and strong customer spending in foundry and logic remain growth drivers.

Growing Revenues Aid Centene (CNC), Escalating Costs Hurt

Per the Zacks analyst, the WellCare buyout, expanding state-wide presence, and rising membership poise the company well for growth.

New Upgrades

Strategic Alliances & Solid Balance Sheet to Aid Lear (LEA)

Lear's strategic buyout of Xevo, aimed to boost its market position, along with its high liquidity and low leverage is likely to aid the company's bottom line in the future, per the Zacks analyst.

CoreLogic (CLGX) Rides on Operational, Financial Growth

The Zacks analyst believes that successful execution of strategic plans, housing-market fundamentals, and recurring revenues aid growth and profitability for CoreLogic.

Range Resources (RRC) Banks on Gas-Rich Appalachian Basin

The Zacks analyst signals Range Resources' bright production outlook since the upstream firm has a multi-decade inventory of premium drilling locations in the natural gas-rich Appalachian Basin.

New Downgrades

High Costs, Low Investment Income Ail Marsh & McLennan (MMC)

Per the Zacks analyst, its deteriorating private equity portfolio and investment income continue to be threats for the company.

Elevated Expenses Likely to Mar Zscaler's (ZS) Profitability

Per the Zacks analyst, elevated expenses for enhancing sales & marketing capabilities, along with increased investments in research & developments, are likely to dampen Zscaler's profitability.

International Business Hurts Snap-on's (SNA) Tools Group Sales

Per the Zacks analyst, Snap-on has been witnessing sluggish sales trends in the Tools Group segment owing to lower sales at the International franchise business, which persisted in Q2.


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
 
Union Pacific Corporation (UNP) : Free Stock Analysis Report
 
Roche Holding AG (RHHBY) : Free Stock Analysis Report
 
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
 
Altria Group, Inc. (MO) : Free Stock Analysis Report
 
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
 
Adobe Systems Incorporated (ADBE) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

Advertisement

Recommended Stories

  • Billionaire Bill Gates Has 51% of His Portfolio Invested in 2 Brilliant Stocks

    The Bill and Melinda Gates Foundation Trust outperformed the S&P 500 by a wide margin over the past three years, in part because of these two stocks.

  • One More Day, One More Boeing Incident - Senegal Crash Adds to Troubles

    Boeing Co (NYSE: BA) continues to face challenges as a Boeing 737-300 aircraft crashed during takeoff at Senegal’s main airport on Thursday. Air Sénégal flight HC301, operated by Transair with 78 passengers, skidded off a runway before takeoff, injuring 11 people and bringing the facility to a halt. The Blaise Diagne airport said an investigation was underway to determine the cause of the accident, which occurred at around 0100 GM, reported Reuters. Boeing is already under regulatory scrutiny af

  • Can I Use My RMDs to Transfer Money Into My Roth IRA?

    If you're taking a required minimum distribution from an IRA, 401(k) or other tax-deferred account and don't need the money to cover living expenses, where should you stash that unneeded cash? Investors now need to start taking RMDs at age 73 or, if they were born after 1960, at age 75. Depending on the balances of […] The post Can I Use My RMDs to Transfer Money Into My Roth IRA? appeared first on SmartReads by SmartAsset.

  • Ask an Advisor: Can a Nursing Home Take Our IRA? We Have a $100K IRA and a Trust to Protect Our Assets

    My wife and I are elderly. I have an individual retirement account (IRA) worth about $100,000, and we have a trust set up through our children to protect our assets. If one or both of us have to go into … Continue reading → The post Ask an Advisor: Can a Nursing Home ‘Take Our IRA?' My Wife and I Are Elderly. We Have a $100K IRA and a Trust to Protect Our Assets. appeared first on SmartAsset Blog.

  • Dave Ramsey Shares Three Rules For Buying A House

    In today's turbulent housing market, navigating the path to homeownership requires a more strategic approach than ever. With soaring prices and high interest rates, prospective buyers face myriad challenges. But despite the complexities, financial experts like Dave Ramsey offer valuable insights to guide homebuyers through the process. Ramsey shared three rules for buying a house in a May 6 post on X: 1. Be debt-free. 2. Keep enough money in an emergency fund to cover three to six months of hous

  • ‘Seriously Underwater’ Home Mortgages Tick Up Across the US

    (Bloomberg) -- Roughly one in 37 homes are now considered seriously underwater in the US and that share is much higher across a swath of southern states, according to data out Thursday.Most Read from BloombergMicrosoft’s Xbox Is Planning More Cuts After Studio ClosingsAmericans Are Racking Up ‘Phantom Debt’ That Wall Street Can’t Track‘Seriously Underwater’ Home Mortgages Tick Up Across the USArm Slides as Tepid Outlook Fuels Concerns Over AI SlowdownNationally, 2.7% of homes carried loan balanc

  • How Much Cash Can A $300,000 Annuity Generate For Me Each Month?

    Imagine having a reliable source of income you can count on throughout your retirement. That’s the promise of an annuity. These insurance products have been designed to turn your savings into a steady stream of monthly payments. They guarantee peace of mind and financial security in your golden years. Don't Miss: Are you rich? Here’s what Americans think you need to be considered wealthy. Can you guess how many Americans successfully retire with $1,000,000 saved? The percentage may shock you. An

  • Tesla punctuates layoffs with apparent hiring freeze

    Tesla appears to have followed up its recent layoffs with a company-wide hiring freeze. Only three positions remain open out of more than 3,000.

  • GigaCloud Technology Inc. (GCT) Q1 Earnings and Revenues Surpass Estimates

    GigaCloud Technology Inc. (GCT) delivered earnings and revenue surprises of 64.71% and 6.84%, respectively, for the quarter ended March 2024. Do the numbers hold clues to what lies ahead for the stock?

  • Rivian's R2 Is Already Built to Fail

    R2 is too expensive even two years before launch.