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Top Research Reports for Toyota Motor, AMD & Qualcomm

Friday, February 23, 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 Toyota Motor Corp. (TM), Advanced Micro Devices, Inc. (AMD) and Qualcomm Inc. (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 >>>

Toyota Motor’s shares have outperformed the Zacks Automotive - Foreign industry over the past six months (+44.0% vs. +26.6%). The company’s robust lineup of trucks and sport utility vehicles are set to fuel Toyota’s sales volumes. Its electric vehicle (EV) push is a major tailwind.

The Japanese auto giant aims to generate 40% of its global sales from EVs by 2025 and 70% by 2030. It aims to expand global sales of BEVs to 1.5 million units in 2026. Upbeat projections for profit and revenues for fiscal 2024 spark optimism.

However, labor cost inflation is expected to continue to weigh on the company’s margins. High capex and R&D expenses for the development of electric and high-tech vehicles are likely to dent its near-term margins and cash flows. TM expects sales in Japan to decrease amid the suspension of shipments of Daihatsu. The stock warrants a cautious stance for now.

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

Shares of AMD have outperformed the Zacks Electronics - Semiconductors industry over the past six months (+78.6% vs. +61.0%). The company is benefiting from portfolio strength and an expanding partner base. In cloud, server CPU revenues increased year over year and sequentially as North American hyperscalers expanded fourth Gen EPYC Processor deployments to power their internal workloads and public instances.

Amazon, Alibaba, Google, Microsoft and Oracle brought more than 55 AMD-powered AI, HPC and general-purpose cloud instances into preview or general availability in the reported quarter. Exiting 2023, AMD had more than 800 EPYC CPU-based public cloud instances available.

AMD is benefiting from the strong adoption of EPYC CPUs for inferencing workloads for smaller models like Llama 7B, as well as the power head nodes in large training and inference clusters. AMD expects gross margin to expand in 2024. However, weakness in the Gaming and the Embedded businesses is a headwind.

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

Qualcomm’s shares have outperformed the Zacks Wireless Equipment industry over the past six months (+44.5% vs. +28.1%). The company reported relatively healthy first-quarter fiscal 2024 results, with the bottom and top lines beating the respective Zacks Consensus Estimate.

Qualcomm is likely to benefit from the multi-year Apple deal for 5G modems for iPhones and the launch of Snapdragon 7 Gen 3 chipsets with advanced AI features for mid-range smartphones. A solid momentum in IoT, healthy 5G traction and a diversified revenue stream are tailwinds. It is focusing on the seamless transition from a wireless communications firm for the mobile industry to a connected processor firm for the intelligent edge.

However, soft market conditions in China have resulted in lower-than-expected demand and elevated inventory levels. Weakness in the smartphone industry and cautious client approach are weighing on margins. Rising geopolitical conflicts and high debt burden are other headwinds.

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

Other noteworthy reports we are featuring today include Analog Devices, Inc. (ADI), Synopsys, Inc. (SNPS) and CME Group Inc. (CME).

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

Solid Product Portfolio to Buoy Toyota (TM) Amid Debt Woes


Robust Product Portfolio & Partnerships Aid AMD's Prospects

Qualcomm (QCOM) Rides on 5G Traction, Portfolio Strength

Featured Reports

Weakness in Communications Market Ails Analog Devices (ADI)
Per the Zacks analyst, Analog Devices is suffering from sluggishness in communications end market due to borad-based inventory corrections.

Synopsys (SNPS) Banks on Strong Product Menu, Contract Wins
Per the Zacks analyst, Synopsys' focus on strengthening its product portfolio is helping it cater to the growing demand in the EDA market. Deal wins at leading semiconductor companies is a tailwind.

Improving Clearing and Transaction Fees Aid CME Group (CME)
Per the Zacks analyst, CME is set to grow on higher clearing and transaction fees as market position, diverse derivative product lines and global reach drive volumes. However, escalating expense ails.

Investment & Expanding Operation Aid American Water (AWK)
Per the Zacks analyst American Water's planned long-term investment to strengthen infrastructure and expanding operation through acquisition and organic means are going to drive its performance.

Buyouts Aid Fifth Third's (FITB) Top Line, High Costs Ail
Per the Zacks analyst, strategic acquisitions diversify Fifth Third's revenue sources, thereby supporting its top-line growth. However, an elevated expense base will likely affect its bottom line.

Bruker (BRKR) Rides on Innovative Products, FX Woes Worry
The Zacks Analyst is impressed with Bruker achieving robust organic growth through innovative, high-value solutions and ongoing portfolio transformation. Yet, adverse FX Impacts pose a concern.

Effective Innovations Aid Sally Beauty (SBH), High Costs Ail
Per the Zacks analyst, Sally Beauty is set to keep benefiting from focus on customer-centric innovations. However, rising selling, marketing and administrative expenses is a concern for the company.

New Upgrades

Digital Enhancement Moves Aid Builders FirstSource (BLDR)
Per the Zacks analyst, Builders FirstSource is benefiting from digital enhancements, a strong value-added product portfolio along with cost synergies and strategic acquisitions.

Copa Holdings (CPA) Thrives on Upbeat Air Travel Demand
Strong air travel demand is driving Copa Holdings' top line. The Zacks analyst also finds the company's fleet modernization initiatives encouraging.

Iridium's (IRDM) Performance Gains from Higher Subscribers
Per the Zacks analyst, Iridium's performance is gaining from increasing subscribers. The company expects engineering and support revenue to benefit owing to the space development agency contract

New Downgrades

Overdependence on Exparel Hurt Pacira's (PCRX) Prospects
Per the Zacks Analyst, Pacira is heavily dependent on Exparel sales for revenue as Zilretta is yet to gain traction in the market. A decline in Exparel sales will hurt the stock severely.

W&T Offshore (WTI) Weighed Down by High Debt Burden
A consistently high debt burden can be a concern for W&T Offshore as it indicates a higher financial risk, thinks the Zacks analyst.

Project Overruns, Oil Exposure to Weigh on Suncor (SU)
The Zacks analyst believes that project overruns, like those experienced at Terra Nova, could indicate operational risks. The vulnerability of Suncor's results to oil prices is also a negative.

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

Analog Devices, Inc. (ADI) : Free Stock Analysis Report

QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report

Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report

CME Group Inc. (CME) : Free Stock Analysis Report

Toyota Motor Corporation (TM) : Free Stock Analysis Report

Synopsys, Inc. (SNPS) : Free Stock Analysis Report

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Zacks Investment Research