Top Analyst Reports for Microsoft, Chevron & Intel

Tuesday, October 31, 2017

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), Chevron (CVX) and Intel (INTC). 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 >>>

Buy-rated Microsoft shares have outperformed the Zacks Technology sector in the year to date period (up +35% versus +25.3%) on greater appreciation for the company's reorganization and repositioning. Microsoft reported impressive first-quarter fiscal 2018 results driven by rapid adoption of Azure and Office 365.

The Zacks analyst thinks these factors will be the key catalysts in the near future, which along with lower spending is anticipated to drive operating margin expansion in fiscal 2018. Additionally, collaborations with the likes of Amazon.com, Red Hat, Symantec, Cray and PAREXEL are positive for the company's growth prospects.

Microsoft’s upcoming console -Xbox One X- has significant growth potential, as evident from the record pre-orders. However, lack of exclusive games on the platform as compared with Sony's PS4 is a concern. At the same time, stabilizing PC shipments bodes well for the company.

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

Shares of Buy-rated Chevron have risen +7.4% in the past year, underperforming the Zacks International Integrated Oil industry's +10.5%, while larger rival ExxonMobil has gained only +0.3% over the same time period. The second-largest U.S. oil producer beat expectations in the third quarter amid the recovery in commodity prices and robust refining profits.

More importantly, Chevron was able to cover its investment and payouts with cash from operations - something investors really want right now. With crude prices firming and Chevron being one of the most oil-weighted majors, the company's profits got an expected boost. Stronger refining margins also helped increase earnings.

As it is, its current oil and gas development project pipeline is among the best in the industry, boasting large, multi-year projects. Consequently, we think Chevron offers substantial upside potential from the current price levels and view it as a preferred energy play to own now.

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

Strong Buy-rated Intel shares have gained +22.3% year to date, underperforming the broader Zacks Technology sector as well as the red-hot semiconductors space, which are up +25.3% and +38.6%, respectively. But Intel reported strong third-quarter 2017 results driven by robust performance from the Data Center Group, Internet-of-Things Group, Non-Volatile Memory Solutions and Programmable Solutions Group.  These segments form the crux of Intel’s data-centric business model.

Management revised its 2017 outlook based on double-digit growth expectation from data-centric businesses. The Zacks analyst thinks anticipated improvement in cost structure and lower spending, primarily due to improving operational efficiency will aid in expansion of margins.

The launch of Xeon Scalable, Core 8 chips, Myriad X and next-generation desktop processors are key catalysts. The new desktop processors are expected to help Intel's gaming endeavors amid stiff competition from AMD and NVIDIA. Moreover, the Core 8 launch is expected to boost PC market share.

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

Other noteworthy reports we are featuring today include Altria (MO), Biogen (BIIB) and Kinder Morgan (KMI).

Wall Street’s Next Amazon

Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.

Click for details >>

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's (MSFT) Margin to Expand on Rapidly Growing Azure

Chevron (CVX) Buoyed by Higher Refining Margins, Cash Flow

Data-Centric Growth, Lower Spending Benefits Intel (INTC)

Featured Reports

Altria (MO) to Benefit From Strength in Smokeless Products

Per the Zacks analyst, Altria is likely to continue gaining from its smokeless products segment. This unit has been gaining market share backed by improved e-vapor volumes and favorable pricing.

Bayer's (BAYRY) Animal Health Biz Doing Well Amid Challenges

The Zacks analyst is positive about Bayer's Animal Health Group doing well despite weak market. The company discontinued operations of Covestro group and will focus on Life Science businesses.

Biogen's (BIIB) Spinraza Starts Well, Diversification Bid Continues

Biogen's newest drug Spinraza has witnessed strong patient uptake in the United States and internationally. The Zacks analyst likes Biogen's efforts to diversify beyond multiple sclerosis.

Kinder Morgan (KMI) to Grow on Fee-Based Deals, Debts High

Kinder Morgan expects majority of its cash flow in 2017 to be generated from stable fee-based contracts. However, high dependence on debt financing will hurt the company.

FMS Sales Aid L3 Technologies (LLL), Interest Expense Hurt

Per the Zacks analyst, solid growth in foreign military sales (FMS) drives L3 Technologies' performance.

Coal Volume Growth Aids Norfolk (NSC), Automotive Unit Ails

The Zacks analyst likes the growth in coal and intermodal volumes. Improvement in operating ratio is also a positive.

Strong End-Market, Flash Demand Drives Western Digital (WDC)

Per the Zacks analyst, strong end-markets as well as increasing demand for flash-based storage products are the key catalysts for Western Digital.

New Upgrades

Cypress (CY) Drives On Strong Wireless Platform, Auto & IoT

The Zacks analyst believes that Cypress new design wins in the wireless connectivity platform, strength in the auto segment and expansion in the IoT market will continue to be the growth drivers.

Alexion (ALXN) Looks Solid on Soliris, Strensiq Doing Well

Per the Zacks analyst, label expansion of Alexion's blockbuster drug, Soliris, will boost sales further while Strensiq gains momentum. The restructuring program should reap also reap benefits.

Twitter's (TWTR) Cost Control & Live Efforts Look Promising

Per the Zacks analyst, Twitter's much awaited turnaround is likely to be driven by its cost containment efforts along with focus on live video streaming for more ad dollars.

New Downgrades

Higher Expenses, Weak Video Ad Sales Batter Sohu (SOHU)

Per the Zacks analyst, decline in video ad sales from large advertisers and real estate market is hurting Sohu's brand advertising business. Higher expenses also remain a drag on profitability.

Cerner (CERN) Hurt by Tough Competition in HCIT Market Space

The Zacks analyst believes that tough competition in the Healthcare & Information Technology (HCIT) market exerts considerable pressure on both pricing and margins of Cerner.

Increasing Supply of Rental Units to Hit AvalonBay's (AVB) Growth

Per the Zacks analyst, AvalonBay's growth in rental rates is likely to slow down amid increasing supply of rental units. Further, there is high concession activity.

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
 
Microsoft Corporation (MSFT) : Free Stock Analysis Report
 
Altria Group (MO) : Free Stock Analysis Report
 
Kinder Morgan, Inc. (KMI) : Free Stock Analysis Report
 
Intel Corporation (INTC) : Free Stock Analysis Report
 
Chevron Corporation (CVX) : Free Stock Analysis Report
 
Biogen Inc. (BIIB) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research