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The Zacks Analyst Blog Highlights: Apple Inc., Exxon Mobil Corp., Tesla Inc., Advanced Micro Devices Inc. and ConocoPhillips
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For Immediate Release
Chicago, IL – February 15, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Apple Inc. (AAPL - Free Report) , Exxon Mobil Corp. (XOM - Free Report) , Tesla Inc. (TSLA - Free Report) , Advanced Micro Devices Inc. (AMD - Free Report) and ConocoPhillips (COP - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Inflation to Raise Corporate America's Profits? 5 Top Picks
Wall Street has been reeling under severe volatility since the beginning of this year after performing impressively in the last two pandemic-ridden years. Anticipation of a tougher-than-expected stand by the Fed in March to combat soaring inflation has dented investors’ confidence significantly.
However, mounting inflation may become a blessing in disguise for corporate America with the opportunity of higher profit accumulation. At this stage, it will be prudent to invest in U.S. corporate behemoths with a favorable Zacks Rank that have released strong earnings results and given a solid outlook. Five of them are — Apple Inc., Exxon Mobil Corp., Tesla Inc., Advanced Micro Devices Inc. and ConocoPhillips.
Inflation Hits Record-High Level
On Feb 10, the Department of Commerce reported that the consumer price index (CPI) — popularly known as household inflation — jumped 7.5% year over year in January, marking its highest monthly gain since February 1982. The consensus estimate was 7.2%. The core CPI (excluding volatile food and energy items) climbed 6% year over year in January, its highest since August 1982. The consensus estimate was 5.9%.
The University of Michigan reported that the preliminary data for the U.S. consumer sentiment index for February came in at 61.7, its lowest reading since October 20211. The consensus estimate was 67.4 and the final reading of January was 67.2. Expectations for inflation over the next year came in at 5% suggesting an increase from 4.9% in January and the highest level since July of 2008.
Corporate America to Profit Higher
The U.S. economy is suffering from higher inflationary pressure since mid-2021. However, profits of U.S. companies jumped in 2021, surpassing the consensus estimates. The momentum is likely to continue going forward. As of Feb 9, total earnings of the S&P 500 companies in 2022 have been estimated to increase 10.2% year over year on 8.2% higher revenues.
U.S. corporations are suffering from higher input costs owing to the coronavirus-led global breakdown of the supply-chain system. Shortage of manpower also forced businesses to raise wage rates. However, U.S. corporates have been able to fully pass higher costs of production to final customers due to massive pent-up demand.
Unprecedented fiscal and monetary support provided by the White House and the Fed to U.S. citizens to withstand pandemic-led economic devastations has resulted in incredible personal savings. Buoyed by this, the aggregate demand remained rock solid, enabling U.S. businesses to earn higher profits.
Our Top Picks
We have narrowed our search to five U.S. corporate giants (market capital > $100 billion) that have given strong guidance for 2022. These companies have seen positive earnings estimate revisions in the last 30 days. Each of our picks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Apple is benefiting from continued momentum in the Services and robust performance from iPhone, iPad, Mac, Wearables and an expanding App Store ecosystem. Although Apple’s business primarily runs around its flagship iPhone, the Services portfolio has emerged as the company’s new cash cow. AAPL currently has more than 745 million paid subscribers across its Services portfolio.
Apple is encouraging developers to use artificial intelligence and machine learning in their apps. The company’s Core ML 2 API helps developers recognize faces or animals in photos, and parse the meaning of text. AAPL’s focus on autonomous vehicles and augmented reality/virtual reality technologies presents growth opportunities in the long haul.
Apple reported first-quarter fiscal 2022 earnings of $2.10 per share that beat the Zacks Consensus Estimate by 11.1% and increased 25% year over year. Net sales increased 11.2% year over year to $123.95 billion, which beat the Zacks Consensus Estimate by 4.92%. AAPL expects to achieve solid year-over-year revenue growth despite significant supply constraints.
Apple has an expected earnings growth rate of 9.6% for the current year (ending September 2022). The Zacks Consensus Estimate for the current year has improved 5.7% over the last 30 days.
Exxon Mobil made multiple world-class oil discoveries at the Stabroek Block, located off the coast of Guyana. XOM has raised the estimate for discovered recoverable resources from the Stabroek Block to approximately 10 billion oil-equivalent barrels.
Exxon Mobile’s bellwether status and an optimal integrated capital structure, which have historically led to industry-leading returns make it a relatively lower-risk energy sector play. The integrated oil behemoth expects to reduce greenhouse gas emissions by 30% in its upstream business. By the same time, XOM expects to reduce flaring and methane emissions by 40%.
ExxonMobil’s third-quarter 2021 adjusted earnings per share of $1.58 beat the Zacks Consensus Estimate by a penny and turned around from the year-ago loss of 18 cents. Total revenues of $73,786 million beat the Zacks Consensus Estimate of $73,299 million. XOM announced launching up to a $10-billion share repurchase program next year.
ExxonMobil has an expected earnings growth rate of 27.3% for the current year. The Zacks Consensus Estimate for current-year earnings improved 11.2% over the last 30 days.
Tesla has acquired a substantial market share within the electric car segment. Increasing Model 3 delivery, which forms a significant chunk of TSLA’s overall deliveries, is aiding its top line. Along with Model 3, Model Y is contributing to its revenues.
In addition to increasing automotive revenues, Tesla’s energy generation and storage revenues should boost its earnings prospects. TSLA said that its overall deliveries surged 20% in the third quarter from its previous record in the second quarter, marking the sixth consecutive quarter-on-quarter gain.
Tesla reported fourth-quarter 2021 earnings of $2.54, which surpassed the Zacks Consensus Estimate of $2.11. Total revenues came in at $17,719 million, beating the consensus mark of $16,070 million. TSLA reported an automotive gross margin of 30.6% and overall gross margin of 27.4% for the quarter. Operating margin came in at 14.7%.
Tesla has an expected earnings growth rate of 37.6% for the current year. The Zacks Consensus Estimate for current-year earnings improved 12.3% over the last 7 days.
Advanced Micro Devices is riding on robust performance from the Computing and Graphics, and Enterprise Embedded and Semi-Custom segments. AMD is benefiting from the strong sales of its Ryzen and EPYC server processors, owing to the increasing proliferation of AI and Machine Learning in industries like cloud, gaming and supercomputing.
The growing clout of 7 nanometer products in the data center vertical, driven by work-from-home and online learning trends, is a key catalyst of Advanced Micro Devices. AMD has raised its 2021 guidance for revenues on the back of strong growth across all businesses.
Advanced Micro Devices reported fourth-quarter 2021 adjusted earnings of $.92 per share, which surpassed the Zacks Consensus Estimate by 22.67%. Revenues of $4.83 billion outpaced the Zacks Consensus Estimate by 6.69%. For 2022, AMD expects revenues to increase 31% year over year to $21.5 billion.
Advanced Micro Devices has an expected earnings growth rate of 43.4% for the current year. The Zacks Consensus Estimate for current-year earnings improved 20.8% over the last 30 days.
ConocoPhillips holds a bulk of acres in the three big unconventional plays, namely Eagle Ford shale, Delaware basin and Bakken shale, which are rich in oil. COP also has a foothold in Canada’s oil sand resources and exposure to developments related to liquefied natural gas.
ConocoPhillips announced an agreement to purchase all of Royal Dutch Shell’s assets in the prolific Permian. The deal reflects COP’s aim of broadening its Permian presence. The transaction is highly accretive and involves the acquisition of roughly 225,000 net acres in the heart of the core Delaware basin.
ConocoPhillips reported fourth-quarter adjusted earnings per share of $2.27, beating the Zacks Consensus Estimate of $2.20. Revenues of $15,963 million beat the Zacks Consensus Estimate of $13,415 million. COP projected its 2022 production at 1.8 million barrels of oil equivalent per day.
ConocoPhillips has an expected earnings growth rate of 62.1% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.3% over the last 7 days.
Just Released: Zacks Top 10 Stocks for 2022
In addition to the investment ideas discussed above, would you like to know about our 10 top buy-and-hold tickers for the entirety of 2022?
Last year's 2021Zacks Top 10 Stocks portfolio returned gains as high as +147.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Apple Inc., Exxon Mobil Corp., Tesla Inc., Advanced Micro Devices Inc. and ConocoPhillips
For Immediate Release
Chicago, IL – February 15, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Apple Inc. (AAPL - Free Report) , Exxon Mobil Corp. (XOM - Free Report) , Tesla Inc. (TSLA - Free Report) , Advanced Micro Devices Inc. (AMD - Free Report) and ConocoPhillips (COP - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Inflation to Raise Corporate America's Profits? 5 Top Picks
Wall Street has been reeling under severe volatility since the beginning of this year after performing impressively in the last two pandemic-ridden years. Anticipation of a tougher-than-expected stand by the Fed in March to combat soaring inflation has dented investors’ confidence significantly.
However, mounting inflation may become a blessing in disguise for corporate America with the opportunity of higher profit accumulation. At this stage, it will be prudent to invest in U.S. corporate behemoths with a favorable Zacks Rank that have released strong earnings results and given a solid outlook. Five of them are — Apple Inc., Exxon Mobil Corp., Tesla Inc., Advanced Micro Devices Inc. and ConocoPhillips.
Inflation Hits Record-High Level
On Feb 10, the Department of Commerce reported that the consumer price index (CPI) — popularly known as household inflation — jumped 7.5% year over year in January, marking its highest monthly gain since February 1982. The consensus estimate was 7.2%. The core CPI (excluding volatile food and energy items) climbed 6% year over year in January, its highest since August 1982. The consensus estimate was 5.9%.
The University of Michigan reported that the preliminary data for the U.S. consumer sentiment index for February came in at 61.7, its lowest reading since October 20211. The consensus estimate was 67.4 and the final reading of January was 67.2. Expectations for inflation over the next year came in at 5% suggesting an increase from 4.9% in January and the highest level since July of 2008.
Corporate America to Profit Higher
The U.S. economy is suffering from higher inflationary pressure since mid-2021. However, profits of U.S. companies jumped in 2021, surpassing the consensus estimates. The momentum is likely to continue going forward. As of Feb 9, total earnings of the S&P 500 companies in 2022 have been estimated to increase 10.2% year over year on 8.2% higher revenues.
U.S. corporations are suffering from higher input costs owing to the coronavirus-led global breakdown of the supply-chain system. Shortage of manpower also forced businesses to raise wage rates. However, U.S. corporates have been able to fully pass higher costs of production to final customers due to massive pent-up demand.
Unprecedented fiscal and monetary support provided by the White House and the Fed to U.S. citizens to withstand pandemic-led economic devastations has resulted in incredible personal savings. Buoyed by this, the aggregate demand remained rock solid, enabling U.S. businesses to earn higher profits.
Our Top Picks
We have narrowed our search to five U.S. corporate giants (market capital > $100 billion) that have given strong guidance for 2022. These companies have seen positive earnings estimate revisions in the last 30 days. Each of our picks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Apple is benefiting from continued momentum in the Services and robust performance from iPhone, iPad, Mac, Wearables and an expanding App Store ecosystem. Although Apple’s business primarily runs around its flagship iPhone, the Services portfolio has emerged as the company’s new cash cow. AAPL currently has more than 745 million paid subscribers across its Services portfolio.
Apple is encouraging developers to use artificial intelligence and machine learning in their apps. The company’s Core ML 2 API helps developers recognize faces or animals in photos, and parse the meaning of text. AAPL’s focus on autonomous vehicles and augmented reality/virtual reality technologies presents growth opportunities in the long haul.
Apple reported first-quarter fiscal 2022 earnings of $2.10 per share that beat the Zacks Consensus Estimate by 11.1% and increased 25% year over year. Net sales increased 11.2% year over year to $123.95 billion, which beat the Zacks Consensus Estimate by 4.92%. AAPL expects to achieve solid year-over-year revenue growth despite significant supply constraints.
Apple has an expected earnings growth rate of 9.6% for the current year (ending September 2022). The Zacks Consensus Estimate for the current year has improved 5.7% over the last 30 days.
Exxon Mobil made multiple world-class oil discoveries at the Stabroek Block, located off the coast of Guyana. XOM has raised the estimate for discovered recoverable resources from the Stabroek Block to approximately 10 billion oil-equivalent barrels.
Exxon Mobile’s bellwether status and an optimal integrated capital structure, which have historically led to industry-leading returns make it a relatively lower-risk energy sector play. The integrated oil behemoth expects to reduce greenhouse gas emissions by 30% in its upstream business. By the same time, XOM expects to reduce flaring and methane emissions by 40%.
ExxonMobil’s third-quarter 2021 adjusted earnings per share of $1.58 beat the Zacks Consensus Estimate by a penny and turned around from the year-ago loss of 18 cents. Total revenues of $73,786 million beat the Zacks Consensus Estimate of $73,299 million. XOM announced launching up to a $10-billion share repurchase program next year.
ExxonMobil has an expected earnings growth rate of 27.3% for the current year. The Zacks Consensus Estimate for current-year earnings improved 11.2% over the last 30 days.
Tesla has acquired a substantial market share within the electric car segment. Increasing Model 3 delivery, which forms a significant chunk of TSLA’s overall deliveries, is aiding its top line. Along with Model 3, Model Y is contributing to its revenues.
In addition to increasing automotive revenues, Tesla’s energy generation and storage revenues should boost its earnings prospects. TSLA said that its overall deliveries surged 20% in the third quarter from its previous record in the second quarter, marking the sixth consecutive quarter-on-quarter gain.
Tesla reported fourth-quarter 2021 earnings of $2.54, which surpassed the Zacks Consensus Estimate of $2.11. Total revenues came in at $17,719 million, beating the consensus mark of $16,070 million. TSLA reported an automotive gross margin of 30.6% and overall gross margin of 27.4% for the quarter. Operating margin came in at 14.7%.
Tesla has an expected earnings growth rate of 37.6% for the current year. The Zacks Consensus Estimate for current-year earnings improved 12.3% over the last 7 days.
Advanced Micro Devices is riding on robust performance from the Computing and Graphics, and Enterprise Embedded and Semi-Custom segments. AMD is benefiting from the strong sales of its Ryzen and EPYC server processors, owing to the increasing proliferation of AI and Machine Learning in industries like cloud, gaming and supercomputing.
The growing clout of 7 nanometer products in the data center vertical, driven by work-from-home and online learning trends, is a key catalyst of Advanced Micro Devices. AMD has raised its 2021 guidance for revenues on the back of strong growth across all businesses.
Advanced Micro Devices reported fourth-quarter 2021 adjusted earnings of $.92 per share, which surpassed the Zacks Consensus Estimate by 22.67%. Revenues of $4.83 billion outpaced the Zacks Consensus Estimate by 6.69%. For 2022, AMD expects revenues to increase 31% year over year to $21.5 billion.
Advanced Micro Devices has an expected earnings growth rate of 43.4% for the current year. The Zacks Consensus Estimate for current-year earnings improved 20.8% over the last 30 days.
ConocoPhillips holds a bulk of acres in the three big unconventional plays, namely Eagle Ford shale, Delaware basin and Bakken shale, which are rich in oil. COP also has a foothold in Canada’s oil sand resources and exposure to developments related to liquefied natural gas.
ConocoPhillips announced an agreement to purchase all of Royal Dutch Shell’s assets in the prolific Permian. The deal reflects COP’s aim of broadening its Permian presence. The transaction is highly accretive and involves the acquisition of roughly 225,000 net acres in the heart of the core Delaware basin.
ConocoPhillips reported fourth-quarter adjusted earnings per share of $2.27, beating the Zacks Consensus Estimate of $2.20. Revenues of $15,963 million beat the Zacks Consensus Estimate of $13,415 million. COP projected its 2022 production at 1.8 million barrels of oil equivalent per day.
ConocoPhillips has an expected earnings growth rate of 62.1% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.3% over the last 7 days.
Just Released: Zacks Top 10 Stocks for 2022
In addition to the investment ideas discussed above, would you like to know about our 10 top buy-and-hold tickers for the entirety of 2022?
Last year's 2021Zacks Top 10 Stocks portfolio returned gains as high as +147.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys
Access Zacks Top 10 Stocks for 2022 today >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.