Earnings Season Dashboard and New Analyst Research Reports for Chevron, Adobe and AMD – July 19, 2022

Tuesday, July 19, 2022

Zacks Research Daily features the best research results from our team of analysts. Today’s Research Daily features a real-time update on the second quarter 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 handpicked from the approximately 70 reports published today by our team of analysts.

You can see all research reports from today here >>>

Q2 earnings season dashboard

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

The one notable feature at this, albeit early, stage of the second quarter reporting cycle is the companies’ inability to come to consensus estimates. The EPS beat percentage of 72.9% is the lowest since the first quarter of 2020 for this group of 48 index members and the third lowest in the previous 20 quarters. The revenue beat percentage is also lower.

Difficult comparisons for the finance sector, whose Q2 revenue is down -28% from the prior year level, is a major driver of the -13% year-on-year decline on the other of the incomes of the 48 index members who have declared at this stage.

Excluding the drag from the financials sector, Q2 earnings for the rest of the index companies reporting are actually up +12.1% from the same period l last year.

For more details on the second quarter earnings season, please see our Weekly Earnings Overview Report >>>>> JPMorgan, Citi and Big Bank Earnings Breakdown

Today’s Featured Analyst Reports

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

The second-largest US energy company’s portfolio of existing projects is among the best in the industry, thanks to its prominent position in the lucrative Permian Basin. However, Chevron has not been immune to the 2020 commodity price crash, forcing it to cut spending significantly. The company’s high sensitivity to the price of oil is also a concern.

Moreover, the supermajor’s 10-year reserve replacement rate of 100% is indicative of its inability to replace the amount of oil and gas produced. Finally, Chevron was a latecomer to jump on the net zero bandwagon.

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

Adobe shares are down -33.2% year-to-date against the -26.6% drop in the industry Zacks Computer – Software. Weaker end-market demand and the company’s high acquisition costs remain major overhangs. Still, Adobe’s Creative Cloud, Document Cloud, and Adobe Experience Cloud products are helping it drive revenue growth.

Additionally, rising subscription revenue and strong mobile app momentum remain major positives. Additionally, growth in emerging markets, strong demand for online video creation, strong adoption of Acrobat, and improving average revenue per user remain supportive.

The Zacks analyst remains optimistic about Adobe’s market position, compelling product lines, persistent innovation, and strong adoption of Creative Cloud and Adobe Marketing Cloud. In addition, the company’s strong balance sheet remains another bright spot.

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

AMD shares are down -4.8% over the past year against Zacks Electronics – Semiconductors industry decline of -4.5%. The company faces fierce competition from NVIDIA and Intel is a concern. However, AMD is benefiting from strong demand for its Ryzen and EPYC server processors, due to the growing proliferation of artificial intelligence (AI) and machine learning (ML) in industries like cloud, gaming and data centers.

The growing weight of 7 nanometer (nm) products in the data center vertical market, driven by work-from-home and e-learning trends, is a key enabler. AMD provided strong revenue guidance for 2022, supported by robust growth across all businesses.

Increasing revenue from servers and client processors will likely lead to a sequential increase. The acquisition of Xilinx and Pensando will boost AMD’s data center business. Alliances with Amazon, Microsoft, Baidu and JD.com increase business prospects

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

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

Sheraz Mian

Director of Research

Note: Sheraz Mian leads the equity research department at Zacks and is a well-known expert on overall earnings. He is frequently quoted in the written and electronic press and publishes the weekly Earnings Trends and Revenue overview reports. If you would like to receive an email notification whenever Sheraz publishes a new article, please click here>>>