Earnings Season Scorecard and Fresh Analyst Research Reports for Chevron, Adobe & AMD

Tuesday, July 19, 2022
 
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features a real-time update on the Q2 earnings season and new research reports on 16 major stocks, including Chevron Corporation (CVX), Adobe Inc. (ADBE) 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 >>>
 

Q2 Earnings Season Scorecard

Including all of this morning's results, we now have Q2 earnings reports from 48 S&P 500 members. Total earnings for these companies are down -13% from the same period last year on +5.9% higher revenues, with 72.9% beating EPS estimates and 62.5% beating revenue estimates.

The one standout feature at this admittedly early stage in the Q2 reporting cycle is companies' inability to consensus estimates. The 72.9% EPS beats percentage is the lowest since the first quarter of 2020 for this group of 48 index members and the third lowest in the preceding 20 quarters. The revenue beats percentage is also on the lower side.

A big driver of the -13% year-over-year decline in earnings for the 48 index members that have reported at this stage is the tough comparisons for the Finance sector whose Q2 earbnings are down -28% from the year-earlier level.

Excluding the Finance sector drag, Q2 earnings for the rest of index companies that have reported are actually up +12.1% from the same period last year.

For more details about the Q2 earnings season, please check out our weekly Earnings Preview report >>>>>Breaking Down JPMorgan, Citi & Big Bank Earnings 

Today's Featured Analyst Reports

Chevron shares have outperformed the Zacks Oil and Gas - Integrated - International industry over the past year (+53.2% vs. +41.7%). Driving Chevron's recent outperformance, which the Zacks analyst sees as sustainable going forward is the company's greater oil-price leverage relative to the other super majors and favorable production growth profile. 

America’s No. 2 energy company’s existing project pipeline is among the best in the industry, thanks to its premier position in the lucrative Permian Basin. However, Chevron was not immune to the commodity price crash of 2020, forcing it to cut spending substantially. The company’s high oil price sensitivity is a concern too.

Moreover, the supermajor’s 10-year reserve replacement ratio of 100% is indicative of its inability to replace the amount of oil and gas produced. Finally, Chevron has been a laggard to jump into the net-zero bandwagon.

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

Adobe shares have declined -33.2% over the year-to-date basis against the Zacks Computer - Software industry’s decline of -26.6%. The company’s lower end-market demand and high acquisition expenses remain major overhangs. Nevertheless, Adobe’s Creative Cloud, Document Cloud, and Adobe Experience Cloud products are helping it drive top-line growth.

Additionally, rising subscription revenues and solid momentum across mobile apps remain major positives. Further, growth in emerging markets, robust online video creation demand, strong Acrobat adoption, and improving average revenue per user remain tailwinds.

The Zacks Analyst remains optimistic about Adobe’s market position, compelling product lines, persistent innovation, and solid adoption of Creative Cloud and Adobe marketing cloud. Further, the company’s strong balance sheet remains another positive.

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

AMD shares have declined -4.8% over the past year against the Zacks Electronics - Semiconductors industry’s decline of -4.5%. The company is facing stiff competition from NVIDIA and Intel is a concern. However, AMD is benefiting from 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 nanometers (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

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

Other noteworthy reports we are featuring today include ServiceNow, Inc. (NOW), Becton, Dickinson and Company (BDX), and Dominion Energy, Inc. (D).

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

Chevron (CVX) to Gain from Massive Permian Acreage

Adobe (ADBE) Rides on Growing Adoption of Cloud Applications

Robust Product Portfolio & Partnerships Aid AMD's Prospects

Featured Reports

Growing Customer Base & Partnerships Aid ServiceNow (NOW)
Per the Zacks analyst, ServiceNow benefits from rising adoption of its workflows from companies undergoing digital transformation. Also, strategic alliances with the likes of Microsoft are a tailwind.

BD (BDX) Rides on Slew of Product Launches Amid Forex Woes
The Zacks analyst is upbeat about series of product launches by BD over the past few months. Yet, uncertainties from forex fluctuations raise apprehension.

Investment on Infrastructure & Clean Assets Aid Dominion (D)
Per the Zacks analyst, Dominion's investment of $37 billion through 2026 to enhance clean electricity generation and strengthen its infrastructure will boost its profitability.

Segmental Performances Aid Cintas (CTAS) Amid Cost Woes
Per the Zacks analyst, strong performances of the Uniform Rental and Facility Services; and First Aid and Safety Services segments are fueling Cintas' growth despite high labor and purchasing costs.

Strategic Buyouts Aid Raymond James (RJF), High Costs Ails
Per the Zacks analyst, Raymond James' efforts to expand through strategic acquisitions and global diversification will aid financials. However, weak capital markets and high costs are major concerns.

Strong Portfolio & Acquisitions to Drive PTC's Performance
Per the Zacks analyst, PTC's performance is being driven by robust demand for products like Creo and Windchill. Strategic acquisitions have played a pivotal part in boosting the company's business.

United Therapeutics' (UTHR) PAH Portfolio Drives Growth
The Zacks Analyst believes that demand for United Therapeutics' treprostinil medicines is strong. Its newly launched expanded indications for Orenitram and Tyvaso and pipeline have the potential.

New Upgrades

Eni (E) Banks on Renewable Energy, Oil & Gas Discoveries
The Zacks analyst appreciates Eni as the firm is banking on rising energy production from renewable sources. Oil & gas discovery in Algeria has brightened the firm's production outlook.

RPC (RES) to Benefit From Increased Oilfield Activities
Per the Zacks analyst, RPC is poised to benefit from increasing oilfield activities in its industry, as the favorable commodity price scenario has driven upstream investments.

Diverse Market & Investor-Friendly Steps Boost Gartner (IT)
The Zacks analyst is appreciative about Gartner's efforts to reward its shareholders in the form of share repurchases. Also, its large and diverse addressable market mitigates operating risks.

New Downgrades

Technology & Product Investment Costs Hurt Insperity (NSP)
Per the Zacks analyst, Insperity's investments toward technology, product and service offerings is likely to keep the bottom line under pressure.

High Freight Costs Mar Abercrombie & Fitch's (ANF) Performance
Per the Zacks analyst, Abercrombie & Fitch is reeling under higher freight and operating costs as well as the absence of government support. It reduced fiscal 2022 sales and operating income view.

Increasing Expenses and High Debt Hurt HCA Healthcare (HCA)
Per the Zacks analyst, HCA Healthcare's rising expenses will keep eroding its profit levels. Also, its high leverage can affect financial flexibility.

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Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
 
Chevron Corporation (CVX) : Free Stock Analysis Report
 
Becton, Dickinson and Company (BDX) : Free Stock Analysis Report
 
Dominion Energy Inc. (D) : Free Stock Analysis Report
 
Adobe Inc. (ADBE) : Free Stock Analysis Report
 
ServiceNow, Inc. (NOW) : Free Stock Analysis Report
 
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