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Top Research Reports for Qualcomm, Alibaba & HSBC

Tuesday, June 18, 2024

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 QUALCOMM Incorporated (QCOM), Alibaba Group Holding Limited (BABA) and HSBC Holdings plc (HSBC), as well a micro-cap stock PrimeEnergy Resources Corporation (PNRG).  The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.

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 >>>

Qualcomm’s shares have outperformed the Zacks Wireless Equipment industry over the past year (+86.6% vs. +24.1%). The company is increasingly focusing on the seamless transition from a wireless communications firm for the mobile industry to a connected processor company for the intelligent edge. This augurs well for the long-term growth.

Qualcomm is benefiting from healthy traction in Android handsets and automotive businesses, with the development of Snapdragon Dev Kit for Windows in collaboration with Microsoft likely boosting its commercial prospects in the AI PC market. The Snapdragon X Series Platform integrated with Qualcomm AI Hub is also witnessing significant market traction among leading global PC manufacturers.

However, inventory corrections by clients are impeding sales in the IoT business. Increasing competition in the mobile phone chipset market is likely to strain margin. Rising geopolitical instability and high debt obligation remain concerns.

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

Shares of Alibaba have underperformed the Zacks Internet - Commerce industry over the year-to-date period (-3.9% vs. +15.0%). The company’s rising expenses related to new initiatives are a concern. Macroeconomic uncertainties and unfavorable foreign exchange fluctuations remain risks.

Nevertheless, Alibaba is benefiting from strong momentum across its international commerce retail business. Solid combined order growth in AIDC’s retail businesses and strength in AliExpress’ Choice are contributing well. Growing international commerce wholesale business, thanks to strength in cross-border-related value-added services, is a tailwind.

Expanding China's wholesale commerce business remains a major positive. Robust local consumer services and Cainiao logistics services are further driving top-line growth. Strength in Lazada, AliExpress and Trendyol is expected to continue benefiting Alibaba’s international business.

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

Shares of HSBC have gained +12.1% over the past year against the Zacks Banks - Foreign industry’s gain of +24.1%. The company’s strong capital position, higher interest rates, an extensive network and business restructuring initiatives will keep aiding it.

The company has exited retail operations in the United States, Canada, France, New Zealand, Greece and Russia. Moreover, in order to focus more on Asia, HSBC completed the acquisition of Citigroup’s wealth business in China.

However, HSBC’s first-quarter 2024 results were hurt by higher expenses. While the company’s efforts to improve market share in the Asia region will support financials in the long run, this will likely lead to a rise in near-term expenses.

Because of its growth strategy and higher technology-related expenses, HSBC expects 2024 expense growth of 5%. The current tough macroeconomic backdrop is another major headwind.

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

PrimeEnergy’s shares have gained +18.4% over the past year against the Zacks Oil and Gas - Exploration and Production - United States industry’s gain of +24.1%. This microcap company with market capitalization of $184.75 million exhibits strong buy indicators, doubling production year over year in first-quarter 2024, with oil rising 123% year over year and gas growing 44%, boosted by effective drilling and new wells.

Revenues soared 88% year over year to $42.99 million, fueled by high oil prices and production increases. Strategic asset acquisitions expanded PNRG's operational footprint and diversified its revenue streams. The company plans to complete 54 horizontal wells in 2024, investing $140 million, promising growth.

However, liquidity concerns arise with cash reserves dropping to $1.8 million and increasing long-term debt sequentially. Heavy reliance on high-capital horizontal drilling and oil price vulnerability pose significant risks. Technological lags and the shift toward renewable energies may further challenge PNRG's market position.

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

Other noteworthy reports we are featuring today include Virtu Financial, Inc. (VIRT), Honeywell International Inc. (HON) and Union Pacific Corp. (UNP).

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

Qualcomm (QCOM) Rides on Solid Automotive & Android Traction

Alibaba (BABA) Gains From International Commerce Businesses

Expansion Efforts Aid HSBC Holdings (HSBC), High Costs a Woe

Featured Reports

Strength in Aerospace Unit Aids Honeywell (HON), Costs Hurt
Per the Zacks analyst, Honeywell will benefit from strength in Aerospace segment, led by strong commercial aftermarket and commercial aviation demand. However, high costs remain concerning.

Union Pacific (UNP) Rides on Dividends Amid Revenue Woes
The Zacks analyst likes the company's efforts to reward its shareholders. However, below-par revenues due to the weak freight demand scenario remain a concern.

Expansion of Mega Hubs Aids AutoZone (AZO), High Debt Ails
Per the Zacks analyst, AutoZone's focus on increasing its market penetration via the expansion of mega hubs bodes well. However, the total debt-to-capital ratio of 2.27 remains a concern.

Solid Investments Aids DTE Energy (DTE), Poor Financials Woe
Per the Zacks analyst, solid capital expenditure plan is likely to strengthen DTE Energy's infrastructure. However, its poor financial ratios are indicative of the company's weak financial position.

Solid NovaSeq Prospect Aids Illumina (ILMN), Macro Woes Stay
The Zacks Analyst is impressed with Illumina's strong growth in NovaSeq X consumables following the successful launch of the 25B flow cell. Yet, economic constraints, including in China, pose worry.

Ayvakit Sales Boosts Blueprint (BPMC), High Dependence a Woe
Per the Zacks Analyst, BPMC is witnessing increased growth in Ayvakit sales, following label expansion in the U.S. and EU markets. However, high dependency on Ayvakit for revenue generation is a woe.

PVH Corp (PVH) Gains From Brand Strength & Other Efforts
Per the Zacks analyst, PVH Corp is gaining from its brand strength and PVH+ Plan. The plan aims at accelerating growth via boosting its core strengths, and connecting its brands with the consumers.

New Upgrades

Virtu Financial (VIRT) Gains From Market Making Segment
Per the Zacks Analyst, Virtu's Market Making segment is well-poised for growth courtesy of growing retail engagement. Higher commissions have been driving results in its Execution Services segment.

Matador's (MTDR) Delaware Basin & Eagle Ford Expansion Aids
Per the Zacks analyst, Matador Resources' strategic expansions in the Delaware Basin and Eagle Ford Region are set to boost its production outlook. The company also prioritizes debt reduction.

Restructuring Efforts, Solid Balance Sheet Aid Goldman (GS)
The Zacks analyst is impressed with Goldman's refocus on its core strengths of IB and trading operations with restructuring initiative. Further, strong balance sheet is a favorable factor.

New Downgrades

Escalating US-China Trade Tensions May Hurt Emeren (SOL)
Per the Zacks analyst, the increased U.S. tariff rate on import of solar cells from China, might escalate trade tensions between the two nations. This in turn might hurt Emeren

Lower IT Spending to Hurt CrowdStrike's (CRWD) Prospects
Per the Zacks Analyst, CrowdStrike's growth prospects might be hurt by soft IT spending as organizations are pushing back their large IT investment plans amid macroeconomic headwinds.

Dismal Comps Performance Hurt Papa John's (PZZA) Prospects
Per the Zacks analyst, Papa John's comps is affected by challenging macroeconomic conditions, lower transactions and a decline in organic delivery. Also, conflict in the Middle East is a concern.

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

QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report

Honeywell International Inc. (HON) : Free Stock Analysis Report

Union Pacific Corporation (UNP) : Free Stock Analysis Report

HSBC Holdings plc (HSBC) : Free Stock Analysis Report

Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report

Virtu Financial, Inc. (VIRT) : Free Stock Analysis Report

PrimeEnergy Corporation (PNRG): Free Stock Analysis Report

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