Monday, September 18, 2023
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 NVIDIA Corporation (NVDA), Advanced Micro Devices, Inc. (AMD) and Stryker Corporation (SYK). 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 >>>
NVIDIA shares have lost some ground lately, but their performance this year is in a league of its own for company of this size. The stock is up +200% this year, which compares to the Zacks Tech sector's +36.9% gain and the S&P 500 index's +17.1%. Driving this outperformance is strong growth of artificial intelligence (AI), high-performance computing and accelerated computing, which is boosting its Compute & Networking revenues.
The datacenter end-market business is likely to benefit from the growing demand for generative AI and large language models using GPUs based on NVIDIA Hopper and Ampere architectures. A surge in Hyperscale demand and a solid uptake of AI-based smart cockpit infotainment solutions are acting as tailwinds.
Collaboration with Mercedes-Benz and Audi is likely to advance its presence in autonomous vehicles and other automotive electronics space. However, NVDA’s near-term prospects likely to hurt by weakening demand for chips used in the professional visualization end market.
(You can read the full research report on NVIDIA here >>>)
Shares of AMD have outperformed the Zacks Electronics - Semiconductors industry over the year-to-date period (+57.1% vs. +40.9%). The company is benefiting from the growing adoption of fourth-generation EPYC. Genoa adoption has been strong in the second quarter of 2023, with deployments from the likes of Microsoft, AWS, Alibaba and Oracle.
Availability of Bergamo is crucial as a number of server providers like Dell, HPE, Lenovo and Supermicro are set to launch their new Bergamo-based platforms in the third quarter. AMD continues to benefit from acquisitions, including Xilinx and Pensando, which has diversified its business.
However, weakness in the Gaming and Embedded segment revenues are expected to hurt top-line growth. For 2023, the Zacks analyst estimates the Gaming segment to be pegged at $6.55 billion, indicating a decline of 3.8% year over year.
(You can read the full research report on AMD here >>>)
Stryker shares have outperformed the Zacks Medical - Products industry over the year-to-date period (+19.3% vs. -2.8%). The company witnessed strong performance across its segments in the United States. Strong International sales also buoy optimism. The momentum is expected to continue into the second half of 2023 on the back of ongoing procedural recovery and a strong order book for capital equipment.
Stryker’s prospects in 2023 seem promising on the back of strong customer demand for its existing products as well as new launches. The company’s guidance for earnings and revenues appears encouraging. A solid solvency position is a plus.
However, inflationary pressure and supply-chain challenges continue to plague Stryker. Stiff competition in the MedTech space remains a woe. Contraction in both gross and operating margin is a woe.
(You can read the full research report on Stryker here >>>)
Other noteworthy reports we are featuring today include Canadian National Railway Company (CNI), Target Corporation (TGT) and Amphenol Corporation (APH).
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
NVIDIA (NVDA) Rides on Strong Adoption of GPUs, Partnerships
Robust Product Portfolio & Partnerships Aid AMD's Prospects
Diversified Product Portfolio Drives Stryker's (SYK) Prospects
Canadian National's (CNI) Dividends Aid Amid Freight Woes
The Zacks analyst is encouraged by the company's efforts to boost shareholder value. However, lackluster freight revenues are worrisome.
Soft Comps Performance to Hurt Target's (TGT) Sales
Per the Zacks analyst, soft comparable sales performance may hurt Target's sales. Management envisions third-quarter fiscal 2023 comparable sales to decline in the mid-single digits.
End-Market Strength & Diversification Aids Amphenol (APH)
Per the Zacks analyst, Amphenol benefits from commercial air, military, industrial and automotive end-market demand. Diversified business model also lowers volatility of individual geographies.
Acquisitions & Digital Efforts to Aid Copart (CPRT)
Per the Zacks analyst, the buyout of AVK and Vincent Auto Solutions is driving CPRT's top-line growth. The launch of Copart Max & its partnership with CHAMP titles are poised to step up digital game.
Corning (GLW) Rides on Solid Demand Trends, Cost Optimization
Per the Zacks analyst, solid demand trends in the Display Technologies vertical, the ongoing productivity enhancement and cost optimization initiatives will likely boost Corning's margins.
Clean Assets, North America Focus Aid Clearway Energy (CWEN)
Per the Zacks analyst, Clearway Energy is expected to gain from its expanding modern clean renewable projects and focus on North America, saves it from currency fluctuation and sovereign risks.
KB Home (KBH) Benefits from Returns-Focused Growth Plan
The Zacks Analyst stresses that, Returns-Focused growth plan, built-to-order model and robust land acquisition strategies assist KB Home to reduce debt and, boost gross margin and returns.
WestRock (WRK) Benefits from Solid Demand & Strong Backlog
Per the Zacks analyst, WestRock is gaining from strong packaging demand for food, beverage, household cleaning and e-commerce. Recent strategic actions will also drive growth.
Kirby (KEX) Benefits From Segmental & Solid Cash Flow Growth
The Zacks analyst believes that solid segmental performances are boosting Kirby's top-line performance. Kirby's strong cash flow generating ability is evident from its raised guidance for 2023.
Decent Comps Run to Fuel Ollie's Bargain's (OLLI) Top Line
Per the Zacks analyst, Ollie's Bargain's business model, cost control efforts and healthy comps run reinforce its position. Management expects fiscal 2023 comps to increase in the band 4-4.5%.
Nabors Industries (NBR) Wrecked by Massive Debt Burden
The Zacks analyst believes that Nabors Industries' high debt-to-capitalization of 80.9% is a concern, as it restricts the company's financial freedom to tap into growth opportunities.
An Elevated Expense Level Hurts Margins at Euronet (EEFT)
Per the Zacks analyst, the company's high operating costs can put margins under pressure. Rising debts remain a concern as it leads to escalated interest expenses.
Dull Mineral Nutrition Arm, Macro Woes Hurt Phibro (PAHC)
The Zacks analyst is concerned about the lower-than-expected demand for Phibro's Mineral Nutrition products dampening the core segment's performance. Potential macro impacts remain an added concern.
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Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report
Target Corporation (TGT): Free Stock Analysis Report
Canadian National Railway Company (CNI): Free Stock Analysis Report
Amphenol Corporation (APH): Free Stock Analysis Report
Stryker Corporation (SYK): Free Stock Analysis Report
NVIDIA Corporation (NVDA): Free Stock Analysis Report