Tuesday, May 31, 2022
Zacks Research Daily presents the best research results of our analyst team. Today’s Research Daily features new research reports on 16 major stocks, including IBM (IBM), The Goldman Sachs Group, Inc. (GS) and Diageo plc (DEO). These research reports were selected from approximately 70 reports published by our analyst team today.
You see all research reports now here >>>
IBM Shares outperformed the Zacks Computer – Integrated Systems industry over the past year (+5.6% vs. -3.3%), with strong demand for hybrid cloud and AI, driving growth in Software and Consulting. The synergies from Red Hat’s acquisition strengthen its competitive position in the hybrid cloud market.
This is likely to gain from the robust adoption and broad-based presence of IBM Blockchain World Wire-a blockchain-driven global payments network aimed at speeding up and optimizing cross-border payments. The combination of a better business mix, improved operating leverage and increased investment is likely to drive future growth opportunities.
However, stiff competition in the cloud computing market from the likes of Amazon Web Services and Microsoft Azure remains an overhang. Higher debt levels amid extensive restructuring activities are a cause for concern. The high risk of integration from continued procrastination fun is another contraindication.
(You can do it read the full research report on International Business Machines here >>>)
Goldman Sachs shares fell -13.2% last year against Zacks Financial -Investment Bank’s -14.1% decline of the industry. The Zacks analyst believes that any normalization of the trading business is likely to hurt the earnings of the Global Market segment in the near future. Goldman’s continued increase in cost base will hinder the bottom line. Also, legal inconveniences and increased reliance on overseas earnings are troubling.
However, the company’s strength in wealth management and consumer banking businesses is tailwinds, As part of its inorganic moves, it will take on robo-advisor NextCapital Group. Strong client engagement, solid position in announced and completed mergers and acquisitions (M&A) worldwide and investment banking (IB) backlog are likely to continue to drive its revenues to IB.
(You can do it read the full Goldman Sachs research report here >>>)
Shares of Diageo has outperformed the Beverages – Alcohol industry over the past two years ( +36.4% vs. +25.1%). The company’s continued recovery in the on-trade channel, strong consumer demand in the off-trade and market share gains, also contributed to the company’s first-half fiscal 2022 performance. The company saw growth in sales, operating margins and revenue in the first half of fiscal 2021 driven by organic sales growth in all regions. The strong recovery in gross margin and operating cost leverage along with higher marketing investments helped the growth of organic operating margin.
Furthermore, margin growth was driven by savings in supply productivity and price increases, which more than offset higher cost inflation. It provided a decent outlook for fiscal 2022, with organic sales momentum likely to continue into the second half of fiscal 2022. However, ongoing inflationary pressures and currency headwinds are troubling.
(You can do it read the full Diageo research report here >>>)
Other notable reports we feature today include ServiceNow, Inc. (NOW), The Southern Company (SO), and The Progressive Corporation (PGR).
Sheraz Mian
Director of Research
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-known consolidated income expert. He is frequently quoted in print and electronic media and publishes weekly Revenue Trends at Revenue Preview reports. If you would like an email notification whenever Sheraz publishes a new article, please click here >>>
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