Top Research Reports for Meta Platforms, Broadcom & Verizon
Tuesday, January 9, 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 Meta Platforms, Inc. (META), Broadcom Inc. (AVGO) and Verizon Communications Inc. (VZ). 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 >>>
Meta Platform shares have outperformed the Zacks Internet - Software industry over the past six months (+19.7% vs. +9.7%). The company is benefiting from steady user growth across all regions, particularly Asia Pacific. Increased engagement for its offerings like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver.
Meta Platform is leveraging AI to recommend Reels content, which is driving traffic on Instagram and Facebook. Its innovative portfolio, which includes Threads, Reels and Llama 2, is likely to aid prospects. Advertising revenues are expected to witness a CAGR of 13% per our model estimate.
However, challenging macroeconomic conditions remain a headwind for Meta’s advertising revenues, along with targeting and measurement headwinds due to Apple’s iOS changes. Slow monetization of Reels, along with mounting operating losses at Reality Labs, are concerns.
(You can read the full research report on Meta Platforms here >>>)
Shares of Broadcom have outperformed the Zacks Electronics - Semiconductors industry over the past year (+86.1% vs. +77.2%). The company is benefiting from the strong deployment of generative AI which it expects to contribute more than 25% of semiconductor revenues in fiscal 2024. VMware is expected to contribute $12 billion to revenues.
Infrastructure software revenues are expected to be $20 billion while semiconductor solutions revenues are expected to increase in the mid to high-single-digit percentage range on a year-over-year basis in fiscal 2024. Broadcom expects networking revenues to grow nearly 30% year over year in fiscal 2024 driven by accelerating deployment of networking connectivity and expansion of AI accelerators in hyperscalers.
Wireless revenues are expected to remain stable on a year-over-year basis. However, server storage, broadband, and industrial revenues are expected to decline in fiscal 2024.
(You can read the full research report on Broadcom here >>>)
Verizon shares have outperformed the Zacks Wireless National industry over the past year (+2.7% vs. +2.1%). The company is witnessing significant 5G adoption and fixed wireless broadband momentum. It is offering various mix and match pricing in both wireless and home broadband plans which has led to solid client additions.
Initiative to change its revenue mix toward emerging growth services like cloud, security and professional services will likely reap long-term benefits. Its mmWave footprint delivers game-changing experiences for the densest parts of the network and offers highly predictable signal waves leading to greater efficiency and less interference for customers.
However, lower wireline and wireless equipment revenues are major concerns. In the third quarter of 2023, Verizon registered 78,000 Fios Video net losses, reflecting the ongoing shift from traditional linear video to over-the-top offerings. Macroeconomic challenges are impeding the top line.
(You can read the full research report on Verizon here >>>)
Other noteworthy reports we are featuring today include Sanofi (SNY), Starbucks Corporation (SBUX) and MercadoLibre, Inc. (MELI).
Director of Research
Sheraz Mian
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
User Growth, Instagram Strength Aids Meta Platforms (META)
Strong Demand for Networking Products Aids Broadcom (AVGO)
Verizon (VZ) Will Likely Benefit from Rapid 5G Deployment
Featured Reports
Dupixent to Remain Sanofi's (SNY) Key Top-Line Driver
The Zacks analyst believes Dupixent is a key top-line driver for Sanofi due to its outstanding growth trajectory. Dupixent enjoys strong demand trends across all approved indications and geographies.
Solid Comps Growth Aids Starbucks (SBUX), High Costs Ail
Per the Zacks analyst, Starbucks is likely to benefit from robust North America and International sales and sales leverage initiatives and new store growth. However, high costs are a concern.
Solid Data Center Demand Aids Equinix (EQIX) Amid High Rates
Per the Zacks analyst, the solid demand for data centers amid growth in digital infrastructure and cloud adoption will benefit Equinix. Yet, a competitive landscape and high interest rates might ail.
Robust Product Sales Aids West Pharmaceuticals' (WST) Prospects
Per the Zacks analyst, continued strength in West Pharmaceuticals' proprietary products segment will drive prospects amid uncertainty in global economy which includes recession or slow economic growth
Willis Towers (WTW) Poised to Gain from Segmental Strength
Per the Zacks analyst, Willis Towers is set to gain from solid customer retention levels, growing new business and geographic diversification across segments. Yet, high costs weighing on margin ails.
Investments to Benefit CMS Energy (CMS) Amid Rising Costs
Per the Zacks analyst, investments will boost CMS Energy's grid upgrades. Yet rising costs for closure of solid waste disposal facilities for coal ash may hurt the stock.
GATX Rides on Dividends & Buybacks Amid Escalated Costs
The Zacks analyst is impressed by the company's efforts to reward shareholders through dividends and buybacks. However, high expenses are hurting the bottom line.
New Upgrades
MercadoLibre (MELI) Gains From Total Payment Volume Growth
Per the Zacks analyst, MercadoLibre benefits from solid total payment volume growth which is driven by strong momentum across Mercado Pago and mobile-point-of-sale business.
Favorable Loan Mix, High Rates Drives Synovus' (SNV) NII
Per the Zacks analyst, Synovus' top line should continue to benefit from higher rates along with rising loans and deposits. Decent liquidity will support Synovus' capital deployment activities.
Cirrus Logic (CRUS) Benefits From Strong Product Portfolio
Per the Zacks analyst, Cirrus Logic's performance benefitted from solid demand for its camera controller. Also, continued investment across next generation technology like AR/VR are tailwinds.
New Downgrades
EQT Corp (EQT) to Suffer From Limited Geographic Diversity
Per the Zacks analyst, EQT Corp's focus on the Appalachia production raises concerns due to limited geographical diversity, exposing it to the risk of region-specific delays.
Fall in Metal Prices, Lower Mining Ail Franco-Nevada (FNV)
Per the Zacks analyst, the recent fall in gold and silver prices will impact Franco-Nevada's results. Lower mining activities at the Antamina mine will also dent margins.
System transition to Hurt Grocery Outlet's (GO) Margins
System transition resulted in ordering and inventory disruptions in the third quarter. Management expects it to hurt fourth-quarter comparable sales by 300 bps and gross margin by 150 bps.
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Sanofi (SNY) : Free Stock Analysis Report
Verizon Communications Inc. (VZ) : Free Stock Analysis Report
Starbucks Corporation (SBUX) : Free Stock Analysis Report
Broadcom Inc. (AVGO) : Free Stock Analysis Report
MercadoLibre, Inc. (MELI) : Free Stock Analysis Report
Meta Platforms, Inc. (META) : Free Stock Analysis Report
