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Top Stock Reports for Alibaba, McDonald's & Advanced Micro Devices

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·6-min read
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Wednesday, May 18, 2022

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 Alibaba Group Holding Limited (BABA), McDonald's Corporation (MCD), and Advanced Micro Devices, Inc. (AMD). 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 >>>

Alibaba shares have declined -27.3% in the year-to-date period, inline with the Zacks Tech sector's performance and better than Amazon's -33.5% decline. The uncertain outlook for Alibaba's home market given China's zero-Covid policy is exacerbating sentiment shift in the market against growth stocks in a rising interest rate environment. While these are reasonable worries and they could very well weigh on the stock some more, the company's competitive position in the Chinese market has never been stronger. 

Further, its robust New Retail strategy which is gaining strong traction in the market remains a major positive. This is aiding growth in Tmall Import, Freshippo and Intime Department Stores. Furthermore, well-performing Cainiao logistics services are contributing well. Additionally, the company’s strengthening cloud business on the back of its expanding customer base continues to drive its performance.

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

Shares of McDonald's have outperformed the Zacks Retail - Restaurants industry over the past year (+4.4% vs. -16.8%) on the back of robust comps growth. The Zacks analyst believes that the strong drive-thru presence and its investments in delivery and digitization over the past few years have aided McDonald’s in countering the pandemic. Robust digitalization will help the company in driving long-term growth and capturing market share.

The company is focusing on store expansion efforts. It is planning to open more than 1,800 restaurants globally in 2022. However, coronavirus-related woes persist. In first-quarter 2022, comps in the China market were hurt by pandemic.

(You can read the full research report on McDonald’s here >>>)

Shares of Advanced Micro Devices have outperformed the Zacks Electronics - Semiconductors industry over the past year (+34.5% vs. +25.2%). The Zacks analyst believes that the company is benefiting from the strong demand of its Ryzen and EPYC server processors, owing to the increasing proliferation of Artificial Intelligence (AI) and Machine Learning (ML) in industries like cloud, gaming and data center. The growing clout of 7 nanometer (nm) products in the data center vertical, driven by work-from-home and online learning trends, is a key catalyst.

AMD provided strong 2022 guidance for revenues backed by robust growth across all businesses. Higher server and client processor revenues are likely to lead to a sequential increase. The Xilinx and Pensando acquisition will boost AMD's data center business. Alliances with Amazon, Microsoft, Baidu and JD.com augment business prospects. However, stiff competition from NVIDIA and Intel is a concern.

(You can read the full research report on Advanced Micro Devices here >>>)

Other noteworthy reports we are featuring today include Abbott Laboratories (ABT), Medtronic plc (MDT), and Vertex Pharmaceuticals Incorporated (VRTX).

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

Retail & Cloud Businesses Momentum Benefits Alibaba (BABA)

Loyalty Program Aid McDonald's (MCD), China Comps Woes Stay

Robust Product Portfolio & Partnerships Aid AMD's Prospects

Featured Reports

Abbott's (ABT) Diagnostics Arm Grows Amid Forex Headwinds
The Zacks analyst is upbeat about the strong revenue growth within Abbott's (ABT) Diagnostics segment. However, unfavorable foreign exchange movements continued to impact sales performance.

Diabetes Arm View Bright for Medtronic (MDT) Amid Forex Woes
The Zacks analyst is optimistic about Medtronic's growth opportunities within diabetes arm banking on strong adoption of Insulin pumps. Yet, foreign exchange woes remain a concern.

Vertex (VRTX) Cystic Fibrosis Sales Up, Non-CF Pipeline Solid
Vertex's cystic franchise (CF) sales are rising driven by Trikafta. The Zacks analyst is encouraged by the rapid progress of its non-CF pipeline with data from multiple programs presented in 2022.

Solid Medicaid Business Drives Humana (HUM) Amid High Costs
Per the Zacks Analyst, robust Medicaid business backed by several contract wins has helped the company to drive top-line growth. However, escalating expenses continue to weigh on margins.

Amid Competition, Multi Basin Assets Aids Devon Energy (DVN)
Per the Zacks analyst Devon Energy (DVN) high-margin multi basin assets provides support to its performance amid the highly competitive oil and gas industry.

Solid Investments Aid DTE Energy (DTE), Weak Solvency Woes
Per the Zacks analyst, DTE Energy's investment in infrastructure and expansion projects tend to boost its long-term growth prospects. However, its weak solvency position remains a bottleneck.

Gartner (IT) Benefits From CEB Acquisition, Advisory Strength
Per the Zacks analyst, the blend of its analyst-driven advisory services with CEBs best practice and talent management insights helps Gartner provide differentiated suite of services portfolio.

New Upgrades

Service Corporation (SCI) Gains on Strong Funeral Segment
Per the Zacks analyst, Service Corporation is gaining on solid Funeral unit sales, as the percentage of families choosing funeral services is increasing. Funeral revenues rose 4.8% in first quarter.

Higher Prices, Big River Investment Drive U.S. Steel (X)
Per the Zacks analyst, the Big River investment has strengthened U.S. Steel's position in high-margin steel-end markets. Higher steel prices should also drive its profitability.

Sunoco (SUN) to Gain From Rising Motor Fuel Sale Volume
Per the Zacks analyst, Sunoco is cashing in on higher motor fuel sale volume, which is being distributed to convenient stores. This will get translated to increased distributable cash flows.

New Downgrades

High Commodity Costs to Take a Toll on Toyota's (TM) Margins
A sharp rise in raw material costs is likely to slash Toyota's fiscal 2023 profits by 20%. The Zacks analyst is also worried of high R&D expenses and capex, which may limit cash flows.

Supply Chain Troubles & Higher Costs to Hurt Ubiquiti (UI)
Per the Zacks analyst, pandemic induced global supply chain troubles and component shortages is a major concern for Ubiquiti. Higher operating costs is another headwind.

Supply Chain Disruptions to Hit Grocery Outlet's (GO) Margin
Per the Zacks analyst, supply chain bottlenecks, increased labor and transportation expenses, and higher commodity costs may hit Grocery Outlet's margin. Gross margin shrunk 60 bps in first quarter.


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
 
Abbott Laboratories (ABT) : Free Stock Analysis Report
 
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
 
Medtronic PLC (MDT) : Free Stock Analysis Report
 
McDonald's Corporation (MCD) : Free Stock Analysis Report
 
Vertex Pharmaceuticals Incorporated (VRTX) : Free Stock Analysis Report
 
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
 
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