Key Takeaways Boeing's Q3 commercial deliveries rose 0.6%, while defense shipments increased 3.1% year over year.Boeing's 737-10 certification paves the way for deliveries, with 1,555 orders from more than 30 customers.EADSY is targeting aviation services market growth from $209B in 2026 to more than $420B by 2045.
The Boeing Company (BA - Free Report) and Airbus SE (EADSY - Free Report) are the leading manufacturers in the global aerospace sector, commanding the majority of the commercial aircraft market. Their aircraft form the backbone of airline fleets worldwide, positioning them to play a pivotal role in meeting the growing demand for air travel.
Beyond commercial aviation, Boeing and Airbus have established strong footholds in the defense, space and aviation services markets. Boeing supplies a broad range of military equipment and technologies to the U.S. armed forces, including combat aircraft, helicopters, satellites and autonomous systems. Airbus, meanwhile, serves governments and defense customers worldwide with military aircraft, helicopters, satellite systems and security-related solutions. Their presence across these diverse business segments provides multiple revenue streams and helps reduce reliance on commercial aircraft sales.
Looking ahead, both companies stand to benefit from increasing passenger traffic, the replacement of aging aircraft fleets, higher defense expenditures and rising demand for aviation-related services. A closer examination of their financial performance, growth prospects and valuation metrics can help identify which stock offers a more compelling investment opportunity at present.
Tailwinds for BA StockBoeing remains a leading global aircraft manufacturer, supported by its established relationships with airlines, aircraft lessors, governments and defense customers, as well as its extensive commercial aircraft portfolio. Its large installed fleet generates recurring revenues from maintenance, spare parts, training and upgrades. In the third quarter of 2026, Boeing’s commercial aircraft deliveries grew 0.6% year over year, reflecting continued recovery in production and delivery momentum. On the defense side, shipments increased 3.1% from the prior-year period’s level.
On Oct. 20, 2026, the U.S. Federal Aviation Administration (“FAA”) certified Boeing’s 737-10, the largest aircraft in its 737 MAX family, clearing the way for deliveries to begin in the coming months. The aircraft typically accommodates 185-210 passengers and offers enhanced fuel efficiency, reduced operating costs per seat and improved safety features. Boeing has received 1,555 orders from more than 30 customers for the 737-10, representing over 30% of the 737 MAX program’s outstanding order book. The certification is expected to support Boeing’s efforts to address its sizable order backlog, boost delivery revenues and strengthen cash flow as production gradually ramps up.
Tailwinds for EADSY StockOn Oct. 14, 2026, Airbus announced that its Defence and Space division had successfully integrated German and Swedish air defense systems into a unified network during NATO’s SPARTAN ARROW 26 exercise in Crete, Greece. The demonstration connected Germany’s IRIS-T SLM and Sweden’s Patriot missile defense systems to Germany’s Surface-to-Air Missile Operations Centre, while also incorporating Germany’s short-range air defense system to create a coordinated, multi-layered defense network against drones and cruise missiles. This development could benefit Airbus by strengthening its position as a provider of advanced defense integration and command-and-control technologies, creating opportunities for additional contracts as NATO members increase defense spending and modernize their air defense infrastructure.
Airbus forecasted that the global commercial aviation services market is expected to double from approximately $209 billion in 2026 to more than $420 billion by 2045, representing a compound annual growth rate (CAGR) of 3.8%. According to the company’s Global Services Forecast, growth will be driven by an expanding global aircraft fleet, rising passenger traffic, increased maintenance requirements, aircraft upgrades and greater adoption of digital connectivity solutions.
How Do Zacks Estimates Compare for BA & EADSY?The Zacks Consensus Estimate for Boeing’s 2026 earnings per share (EPS) indicates an increase of 89.85% year over year.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Airbus' 2026 EPS indicates an increase of 9.09% year over year.
Image Source: Zacks Investment Research
Valuation for BA & EADSYBoeing shares trade at a forward 12-month Price/Sales (P/S F12M) of 1.36X compared with Airbus' 1.64X.
Image Source: Zacks Investment Research
Liquidity of BA & EADSYBoeing and Airbus' current ratio is 1.14 and 1.15, respectively. A current ratio greater than one indicates that the company has enough short-term assets to liquidate to cover all short-term liabilities, if necessary.
BA & EADSY’s Price PerformanceIn the past month, shares of Boeing have risen 2.1%, while those of Airbus have lost 2.4%.
Image Source: Zacks Investment Research
BA or EADSY: Which Is a Better Choice Now?Boeing is advancing its recovery through improving aircraft deliveries and FAA certification of the 737-10, which could accelerate backlog conversion, boost cash flow and strengthen its market position. Airbus is benefiting from growing defense demand and expanding aviation services opportunities, supporting revenue diversification and long-term growth prospects.
Our choice at the moment is Boeing, given its better price performance, stronger earnings growth and better valuation than Airbus. Both stocks have a Zacks Rank #4 (Sell) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Boeing (BA) reports earnings Tuesday as the stock hovers just above 52-week lows amid key production issues. Tom White takes investors through important headlines hitting investor sentiment and highlights a path for bulls to reclaim stock momentum.
Berkshire Hathaway (BRKA +0.33%) (BRKB +0.38%) CEO Greg Abel has made several significant changes to the $299 billion portfolio since he took over in January. The biggest change so far appears to be its concentration. The portfolio has shrunk to 29 stocks from 42 at the end of 2025, while assets have grown by 9%, from $274 billion to $299 billion.
The top five holdings made up around 70% of the portfolio at the end of 2025, when Warren Buffett stepped down as CEO. After the second quarter of 2026, the top five holdings were still right around 70%, 69% to be exact, but there is one notable difference.
Currently, Apple is the largest position at 22%, followed by American Express at 17.1%, Coca-Cola at 10.9%, Alphabet (GOOG +0.01%) (GOOGL +0.09%) at 9.4%, and Bank of America at 9.2%.
At the end of 2025, Apple was at 22.6%, American Express was at 20.5%, Bank of America was at 10.4%, Coca-Cola was at 10.2%, and Chevron was at 7.2%. Google's parent, Alphabet, accounted for just 2% of the portfolio and was the 10th-largest holding.
Aside from exiting more than a dozen positions, Abel's biggest move over the first two quarters has been piling assets into Alphabet. And when the third-quarter 13F comes out, I would not be shocked to see Abel boost his position in Alphabet even further.
Here's why Alphabet is a top buy in October.
A $514 billion backlog
Hedge fund managers were increasing their holdings of Alphabet stock in September, according to the latest Data Insights Crowding Report. The trend will likely continue in October mainly due to Alphabet's cheap valuation. The stock is trading at 16 times earnings. It hasn't been this cheap in at least 14 years going back to 2012, and probably longer.
But that is a bit misleading because the P/E was skewed lower in Q2 after Alphabet had a massive earnings gain of 335% year over year to $112 billion. About $98 billion of that came primarily from equity investments in Space Exploration Technologies and Anthropic.
GOOG Alphabet$317.31+$0.03 (+0.01%)
NASDAQ · As of 11:17 AM ET 10/26/26
But thes stock's forward P/E is still fairly low at 22, and it has a booming backlog of $514 billion within its cloud business, up 50% from the previous quarter. That's more than double the $240 billion backlog that Alphabet had at the end of 2025.
On the second-quarter earnings call, Alphabet CFO Anat Ashkenazi said the company expects to recognize just over 50% of the total cloud backlog as revenue over the next 24 months.
Apple to Alphabet
Alphabet presents an opportunity that Abel will likely not pass up like his predecessor, Buffett. Some 10 years ago, in the first quarter of 2016, Buffett bought Apple stock for the first time after its valuation sank with a price-to-earnings ratio of 10 -- its lowest in years at the time. Buffett kept loading up on Apple over the next several quarters, and by the end of 2017, it was Berkshire Hathaway's largest holding.
I expect to see a similar pattern here with Abel and Alphabet. Alphabet may not become Apple's largest holding, but the trajectory is similar. It has only been a year since Berkshire first added Alphabet to its portfolio in the third quarter of 2025. Just three quarters later, it's Berkshire's fourth-largest holding, and at this valuation, look for Abel to keep adding to the position.
It's not an apples-to-apples comparison (or Apple to Alphabet, as it were) given that Alphabet's low P/E ratio is skewed. But the speed at which Abel is adding Alphabet stock is reminiscent of how rapidly Buffett grew the Apple position.
The market is concerned about Alphabet's massive capital expenditures (capex), which it raised to $195 billion to $205 billion for fiscal 2026, up from the previous estimate of $180 billion to $190 billion. The increase is mostly due to an acceleration in capacity to meet surging demand. Alphabet expects capex spending to "increase significantly in 2027." This has drained Alphabet's free cash flow, which management anticipates will remain under pressure.
But during this once-in-a-generation AI boom, this is the cost of doing business for these hyperscalers to keep up with the insatiable demand. Amazon has made similar capex commitments, and it appears to be paying off. I'd expect Alphabet is making a similarly calculated move to meet demand.
Cadence Design Systems (CDNS.O) on Monday launched a portfolio of AI models tuned to help design computer chips, deepening its partnership with Nvidia (NVDA.O) and diverging from rival Synopsys's recent deal with OpenAI.
Both companies make software used to design computing chips — a process that involves arranging billions of transistors precisely to meet cost and performance targets — and are racing to have AI "agents" use those tools on behalf of human engineers to speed up the process.
The new suite, called Cadence Maestro, introduced on Monday, was built in part on Nvidia's open-weight Nemotron model and secured with Nvidia's OpenShell safety technology, the companies said.
Cadence said customers can run the models on its own cloud or any public cloud, or keep them entirely in-house behind their own firewalls and data centers.
They can also fine-tune the models on their own chip designs, and early results show up to 30% higher quality and up to five times better cost-efficiency versus general-purpose models, it added.
The Cadence approach contrasts with that of its largest competitor, Synopsys, which on September 30 said it would develop an AI model with OpenAI and share revenue with the ChatGPT maker. That model, GPT-Synopsys, will run on OpenAI-hosted infrastructure.
Paul Cunningham, a Cadence senior vice president, framed Maestro as model-agnostic, noting "there are more (AI) model providers out there than there are (chip design software) vendors."
When asked whether Cadence might strike its own deals with proprietary AI labs, Cunningham said both open- and closed-weight approaches are being "pursued equally," and that working with commercial labs is "part of the Maestro vision," though he declined to elaborate.
The first Maestro models reach select early-access customers in the fourth quarter, Cadence said.
Nvidia (NVDA) remains my clear 'Buy' over AMD (AMD), supported by superior margins, scale, and integrated AI systems. NVDA's gross margin, profitability, and vertical integration drive a valuation advantage, despite AMD's higher forward growth rates. AMD faces margin pressure from higher component costs and significant potential dilution from warrants issued to OpenAI and Meta.
NVIDIA just posted triple-digit revenue growth and Wall Street keeps raising its price targets, yet the stock is drifting lower. One upcoming catalyst could change that trajectory in a dramatic way.
The quarter NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) just delivered would impress at a company one-tenth its size. Q2 fiscal 2027 revenue reached $96.22 billion, up 105.8% year over year. Data Center networking grew 138%, faster than compute.
Jensen Huang put it simply: “AI has reached its inflection point. It’s doing useful work. Its tokens are productive and profitable. Now, compute is revenue.”
Shares are up 18.43% year to date at $220.36, but they fell 3.57% over the past week. Even rumors of a big China chip purchase failed to lift the stock. That break leaves room for a bigger move. NVIDIA’s path to $400 by late 2027 depends on rising earnings and a market-level multiple.
Wall Street Sees 49% Upside as Estimates Keep Climbing
The average analyst target is $328.72, which implies 49% upside. Ratings lean heavily positive, led by 10 Strong Buys, 49 Buys, 2 Holds and 1 Sell.
For fiscal 2028, analysts project revenue of $692.2 billion, up from $411.7 billion this year, or 68% growth. They expect EPS to rise about 71% to $15.9146. Management guides to similar growth.
CFO Colette Kress said “customer forecasts point to our growth doubling next year,” but NVIDIA expects roughly 70% because supply is tight.
Path to $400 Requires Only a Market-Level Multiple
NVIDIA currently trades at about 14x fiscal 2028 earnings. At $400, that rises to about 25x. That is a small premium to the S&P 500’s forward multiple of roughly 21-23x, and it would buy earnings growing at 71%.
What Could Push NVIDIA to $400?
Rising estimates: 90 days ago, analysts expected fiscal 2028 EPS of $12.7636. Today the figure is $15.9146, about 25% higher, following 7 raised estimates and zero cuts in the past 30 days.
Beat run: NVIDIA has beaten estimates for 5 consecutive quarters. In Q2 it earned $2.22 against an expected $2.09.
Vera Rubin ramp: Management expects the fastest product ramp in company history. Rubin brings in $40 billion per gigawatt, compared with $25 billion for Blackwell.
Hyperscaler spending: Capex at the top five hyperscalers is expected to reach nearly $800 billion in 2026 and $1.3 trillion in 2027.
Supply relief and China: Huang said “the unconstrained number would be a lot higher.” The outlook includes no compute revenue from Chinese data centers, so any return there adds upside.
NVIDIA Has Topped This Gain Four Times Since 2016
Reaching $400 requires a gain of about 82%. NVIDIA has gone well beyond that before: shares rose 171% in 2024, 239% in 2023, 125% in 2021 and 224% in 2016.
With a market value of $5.33 trillion, repeating those returns is harder, but the stock has a track record of doing it.
$400 Is a Stretch, but the Math Holds Up
Hurdles remain: gross margin is expected to bottom at 71% to 72% in Q4, and days sales outstanding rose to 60 days. Reddit sentiment has also changed from bullish to neutral as concerns about AI financing grow.
Still, analysts already project 49% upside, and estimates are rising. NVIDIA trades at a forward multiple below the market’s. If Rubin ramps on schedule and supply eases, a 25x multiple on fiscal 2028 earnings would take the stock to $400.
That hyperscaler capex also has to be powered, cooled, and connected by someone, and we rounded up seven suppliers riding the same wave in a free report. Returns like this are rare, and this is how NVIDIA could deliver an outsized gain by 2027.
Contact [email protected] for any questions or corrections.
Almost every Wall Street analyst is pounding the table on Nvidia, yet a growing chorus of skeptics argues the entire AI spending boom rests on a foundation that has yet to deliver a single dollar of payoff outside of tech.
There are a couple of ways to look at it, but the picture is about the same. MarketBeat shows that 54 of the 55 analysts who cover Nvidia (NASDAQ: NVDA | NVDA Price Prediction) have a bullish call (“strong buy”, “buy”). Stock Analysis has the figure at 59 of 62 analysts. That is a range of over 95% to 98%. The news is either good or bad.
So many buy ratings are exceptional, as the stock continues its climb. At least a few analysts are skeptical. The average price target across all analysts is $325. The stock trades at $211 today. So, the assumption is that it can rise 54%. If the past means anything, the forecast is not crazy. Nvidia is up 725% in the last five years, but has done no better than the S&P 500 this year.
Nvidia’s stock price rests on two pillars. The first is 100% year-over-year revenue growth each quarter. In the most recently reported quarter, revenue was up 106% to $96 billion. On paper, by 2029, it should be the largest company in the US based on revenue, jumping ahead of Amazon (NASDAQ: AMZN). It would not take much of a dent in that growth to drive off some investors.
Nvidia’s growth rests on one simple premise: Data center growth will stay on fire. Megatech companies like Microsoft (NASDAQ: MSFT) will continue to have negative cash flow after decades of being positive. And Wall St. will need to fill in what these companies cannot. Skeptics have already argued that this is not sustainable. Apollo economist Torsten Slok notes, “Despite massive investments and widespread hype around artificial intelligence, the technology has delivered zero financial payoff to corporate America outside of tech.” In other words, the forecasts based on customer demand are deeply flawed. If this continues, presumably customer demand will dry up.
A major anxiety about Nvidia is that it sells the chips at the heart of AI’s technology success and growth rate, making it the arms merchant to the entire industry. Over and over again, critics and analysts say that Nvidia funds the demand for its own products by investing in its own chip customers. Nvidia’s balance sheet, and to an extent its revenue, is built on a house of cards.
And fulfilling AI demand may not be entirely driven by profitability. Depending on who is counting, communities that do not want data centers have delayed 200 of them this year. It has become a rallying point for some politicians, and there is no reason it will go away. By itself, this could slow AI growth.
A reader may say this analysis adds nothing new. It does not. It is, however, a juxtaposition of analysts’ wild optimism set next to what may be a less-than-perfect outcome.
Contact [email protected] for any questions or corrections.
AT&T offers compelling long-term value after a 20% share price decline, with double-digit shareholder return potential. T's fiber and connectivity businesses drive robust revenue and EBITDA growth, with a 42.8% convergence rate and strong net adds. Despite a $150 billion debt load, T generates rising free cash flow, supports >5% dividend yield, and plans aggressive share repurchases.
Streaming giant Netflix (NFLX -2.57%) recently reported third-quarter earnings per share that was ahead of Wall Street consensus estimates -- while revenue came in line. However, investors came away disappointed after management said it expects full-year revenue of $51.1 billion, at the lower end of its outlook and slightly below consensus estimates.
Netflix attributed the softness to weaker ad revenue due to a slower-than-expected release of certain ad product capabilities. Still, the crux of the debate on Netflix, and likely overhang on the stock, concerns user engagement amid shifting consumer preferences.
During Netflix's third-quarter earnings call, Co-CEO Greg Peters told analysts, "We know that we can do better" when it comes to U.S. engagement. Should investors be worried?
Image source: Getty Images.
Adapting as content preferences shift
Netflix stock is now down over 47% in the past year, and a major reason for that decline is investor concerns about a shift in consumer viewing habits. Part of the shift can be attributed to short-form content on social media platforms and YouTube, while another concern is the disruption from artificial intelligence, as investors worry that the cost and barriers of creating content will come down.
During Netflix's earnings call, management was asked how engagement trends in the U.S. compare with those in other regions. Peters addressed this question, noting that overall subscriber retention remains healthy across all regions, despite price increases.
Peters also noted that engagement trends are strong in the Asia-Pacific region, Latin America, and Europe, the Middle East, and Africa (EMEA). Specifically, Peters highlighted India, where total viewed hours grew 24% year over year.
In the U.S., Netflix's largest and most mature market, Peters was slightly more reserved, but framed the U.S. as an opportunity. "Our engagement is solid, and it will allow us to continue to grow as we have for the last several years, but we know that we can do better. And that better is our upside. It's our goal to go from very good to great on the performance of that slate," he said.
NFLX Netflix$64.16-$1.70 (-2.57%)
NASDAQ · As of 11:15 AM ET 10/26/26
This may have concerned investors worried that there is little room left to grow in the U.S.
But later in the call, when Netflix Co-President Ted Sarandos was discussing Netflix's EMEA strategy, he cited Netflix's performance in the Nordic countries as evidence that the company is still succeeding in mature markets. "The content slate is killing it there. And it's proof that when we have the right focus, make the right choices and deliver creatively, we can drive outsized impact on the business around the world," he said.
Peters also said management is very excited about Netflix's slate for the fourth quarter, including shows like East of Eden, which is already out, season 4 of The Diplomat, the final season of Emily in Paris, as well as movies such as Bad Day and The Further Mis-Adventures of Cliff Booth written by Quentin Tarantino.
Netflix will also have NFL Christmas Day games.
The threat of AI and short-form content is definitely the big overhang on the stock, in my opinion. Trying to assess whether Netflix's entire business model will be disrupted by AI is just about as difficult as assessing AI's impact on every other sector. But I would bet that Netflix ends up being OK and leveraging AI to complement its business rather than being totally disrupted by it.
Billionaire investor Bill Ackman and his team at Pershing Square USA bought the dip on Netflix earlier this year. Part of their thesis is that the market's concerns on the company "understate the cost of generating long-form, high-quality video, which remains among the most compute-intensive AI tasks."
So it remains to be seen whether the barrier to making high-quality content will actually come down, and I still think there will be demand for it even if viewers continue to gravitate toward short-form content. Given the company's immense resources and industry expertise, I am sure Netflix will continue to add diverse content as consumer preferences evolve and remain one of the dominant streaming platforms in the sector.
Netflix (NFLX - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Over the past month, shares of this internet video service have returned -7.4%, compared to the Zacks S&P 500 composite's -1.2% change. During this period, the Zacks Broadcast Radio and Television industry, which Netflix falls in, has lost 4.8%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
For the current quarter, Netflix is expected to post earnings of $0.68 per share, indicating a change of +21.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -9.1% over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $3.59 points to a change of +41.9% from the prior year. Over the last 30 days, this estimate has changed -0.2%.
For the next fiscal year, the consensus earnings estimate of $3.75 indicates a change of +4.5% from what Netflix is expected to report a year ago. Over the past month, the estimate has changed -2.1%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Netflix is rated Zacks Rank #3 (Hold).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Netflix, the consensus sales estimate for the current quarter of $13.46 billion indicates a year-over-year change of +11.7%. For the current and next fiscal years, $51.15 billion and $56.7 billion estimates indicate +13.2% and +10.9% changes, respectively.
Last Reported Results and Surprise HistoryNetflix reported revenues of $12.87 billion in the last reported quarter, representing a year-over-year change of +11.8%. EPS of $0.87 for the same period compares with $0.59 a year ago.
Compared to the Zacks Consensus Estimate of $12.87 billion, the reported revenues represent a surprise of +0.05%. The EPS surprise was +6.1%.
Over the last four quarters, Netflix surpassed consensus EPS estimates three times. The company topped consensus revenue estimates three times over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Netflix is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Netflix. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
Have you evaluated the performance of Netflix's (NFLX - Free Report) international operations during the quarter that concluded in September 2026? Considering the extensive worldwide presence of this internet video service, analyzing the patterns in international revenues is crucial for understanding its financial resilience and potential for growth.
In the modern, closely-knit global economic landscape, the capacity of a business to access foreign markets is often a key determinant of its financial well-being and growth path. Investors now place great importance on grasping the extent of a company's dependence on international markets, as it sheds light on the firm's earnings stability, its skill in leveraging various economic cycles and its broad growth potential.
Presence in international markets can act as a hedge against domestic economic downturns and provide access to faster-growing economies. However, this diversification also brings complexities due to currency fluctuations, geopolitical risks and differing market dynamics.
While analyzing NFLX's performance for the last quarter, we found some intriguing trends in revenues from its overseas segments that Wall Street analysts commonly model and monitor.
The company's total revenue for the quarter amounted to $12.87 billion, showing rise of 11.9%. We will now explore the breakdown of NFLX's overseas revenue to assess the impact of its international operations.
A Dive into NFLX's International Revenue TrendsAsia-Pacific accounted for 11.9% of the company's total revenue during the quarter, translating to $1.54 billion. Revenues from this region represented a surprise of +0.15%, with Wall Street analysts collectively expecting $1.53 billion. When compared to the preceding quarter and the same quarter in the previous year, Asia-Pacific contributed $1.51 billion (12%) and $1.37 billion (11.9%) to the total revenue, respectively.
During the quarter, Latin America contributed $1.6 billion in revenue, making up 12.5% of the total revenue. When compared to the consensus estimate of $1.61 billion, this meant a surprise of -0.67%. Looking back, Latin America contributed $1.58 billion, or 12.6%, in the previous quarter, and $1.37 billion, or 11.9%, in the same quarter of the previous year.
Of the total revenue, $4.11 billion came from Europe, Middle East and Africa during the last fiscal quarter, accounting for 31.9%. This represented a surprise of -0.87% as analysts had expected the region to contribute $4.14 billion to the total revenue. In comparison, the region contributed $4.03 billion, or 32.1%, and $3.7 billion, or 32.1%, to total revenue in the previous and year-ago quarters, respectively.
Revenue Forecasts for the International MarketsThe current fiscal quarter's total revenue for Netflix, as projected by Wall Street analysts, is expected to reach $13.46 billion, reflecting an increase of 11.7% from the same quarter last year. The breakdown of this revenue by foreign region is as follows: Asia-Pacific is anticipated to contribute 12.1% or $1.63 billion, Latin America 12.2% or $1.64 billion and Europe, Middle East and Africa 32.1% or $4.32 billion.
For the entire year, the company's total revenue is forecasted to be $51.15 billion, which is an improvement of 13.2% from the previous year. The revenue contributions from different regions are expected as follows: Asia-Pacific will contribute 12% ($6.15 billion), Latin America 12.4% ($6.34 billion) and Europe, Middle East and Africa 32.2% ($16.49 billion) to the total revenue.
Final ThoughtsThe dependency of Netflix on global markets for its revenues presents a mix of potential gains and hazards. Thus, monitoring the trends in its overseas revenues can be a key indicator for predicting the firm's future performance.
In an environment where global interconnections and geopolitical skirmishes are intensifying, Wall Street analysts keep a keen eye on these trends, particularly for firms with overseas operations, to adjust their earnings predictions. Moreover, a range of other aspects, including how a company fares in its home country, significantly affects these projections.
At Zacks, a company's changing earnings outlook is given considerable attention due to its proven, strong influence on a stock's price performance in the near term. The connection here is straightforward and positive: when earnings estimates are revised upward, the stock price generally follows suit, increasing as well.
Boasting a remarkable track record that's been externally verified, the Zacks Rank, our unique stock rating system, leverages changes in earnings projections to function as a reliable gauge for predicting short-term stock price movements.
At the moment, Netflix has a Zacks Rank #3 (Hold), signifying that its performance may align with the overall market trend in the upcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
Netflix's Recent Stock Market PerformanceOver the past month, the stock has seen a decline of 7.4% in its value, whereas the Zacks S&P 500 composite has posted a decrease of 1.2%. The Zacks Consumer Discretionary sector, Netflix's industry group, has ascended 4.8% over the identical span. In the past three months, there's been a decline of 8.2% in the company's stock price, against a rise of 2.5% in the S&P 500 index. The broader sector has increased by 2.8% during this interval.
Netflix has been pumping out original content for so long and at such an immense scale that it recently released its second original movie entitled War Machine.
Although the Brad Pitt-starring first iteration sank like a stone in 2017, the unrelated new War Machine, led by Reacher’s Alan Ritchson, was reportedly a ratings smash, hitting 10th on Netflix’s all-time most-watched movies list, with 140 million views. So far, it’s the platform’s biggest movie this year.
If the dearth of online chatter around it is any indication, though, it’s gotten all too easy to have zero interest in or opinions about Netflix’s biggest projects.
Presumably, very few people got yelled at on social media for sharing War Machine spoilers, or felt slighted by a significant other for watching it without them. By all accounts, it’s a pretty good movie, but far from what could be considered an “event,” despite a sheen of event-ness being a reasonable expectation for any studio’s biggest film of the year.
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Instead, it feels more like a movie designed with the goal of capturing a Super Bowl number of eyeballs. That’s the main problem with 2020s Netflix: It gets eyeballs watching far more than it gets tongues wagging.
If a Super Bowl-size event takes place and nobody talks about it, does it even matter?
To be clear, Netflix is still an apex predator in the streaming wars (although it may be dwarfed by the world’s true streaming leader, YouTube). At the end of last year, Netflix topped 325 million subscribers, and in the first half of 2026, it logged 97.7 billion hours watched, landing 11 titles on Nielsen’s top 20 original series.
Analysts on Wall Street project that MasterCard (MA - Free Report) will announce quarterly earnings of $5.14 per share in its forthcoming report, representing an increase of 17.4% year over year. Revenues are projected to reach $9.63 billion, increasing 12% from the same quarter last year.
The current level reflects an upward revision of 0.1% in the consensus EPS estimate for the quarter over the past 30 days. This demonstrates how the analysts covering the stock have collectively reappraised their initial projections over this period.
Prior to a company's earnings release, it is of utmost importance to factor in any revisions made to the earnings projections. These revisions serve as a critical gauge for predicting potential investor behaviors with respect to the stock. Empirical studies consistently reveal a strong link between trends in earnings estimate revisions and the short-term price performance of a stock.
While investors typically rely on consensus earnings and revenue estimates to gauge how the business may have fared during the quarter, examining analysts' projections for some of the company's key metrics often helps gain a deeper insight.
In light of this perspective, let's dive into the average estimates of certain MasterCard metrics that are commonly tracked and forecasted by Wall Street analysts.
Analysts expect 'Net revenue by category- Payment network' to come in at $5.61 billion. The estimate indicates a year-over-year change of +8.2%.
According to the collective judgment of analysts, 'Net revenue by category- Value-added services and solutions' should come in at $4.04 billion. The estimate points to a change of +18.1% from the year-ago quarter.
It is projected by analysts that the 'Revenue- Transaction processing assessments' will reach $4.64 billion. The estimate points to a change of +10.6% from the year-ago quarter.
Based on the collective assessment of analysts, 'Revenue- Domestic assessments' should arrive at $3.15 billion. The estimate points to a change of +12.3% from the year-ago quarter.
Analysts predict that the 'Switched transactions' will reach 49.84 billion. The estimate compares to the year-ago value of 45.37 billion.
The combined assessment of analysts suggests that 'Purchase volume - All MasterCard Credit, Charge and Debit Programs - Worldwide' will likely reach $2492.87 billion. The estimate is in contrast to the year-ago figure of $2280.00 billion.
The consensus among analysts is that 'Purchase volume - All MasterCard Credit, Charge and Debit Programs - APMEA' will reach $531.71 billion. Compared to the present estimate, the company reported $484.00 billion in the same quarter last year.
Analysts forecast 'Purchase volume - All MasterCard Credit, Charge and Debit Programs - Canada' to reach $73.74 billion. Compared to the current estimate, the company reported $69.00 billion in the same quarter of the previous year.
The consensus estimate for 'Purchase volume - All MasterCard Credit, Charge and Debit Programs - Latin America' stands at $200.84 billion. Compared to the present estimate, the company reported $169.00 billion in the same quarter last year.
Analysts' assessment points toward 'Purchase volume - All MasterCard Credit, Charge and Debit Programs - Europe' reaching $881.81 billion. The estimate compares to the year-ago value of $806.00 billion.
The collective assessment of analysts points to an estimated 'Purchase volume - All MasterCard Credit, Charge and Debit Programs - United States' of $794.22 billion. The estimate compares to the year-ago value of $752.00 billion.
The average prediction of analysts places 'Gross dollar volume - All Mastercard Credit, Charge and Debit Programs - Worldwide' at $3011.99 billion. Compared to the current estimate, the company reported $2747.00 billion in the same quarter of the previous year.
View all Key Company Metrics for MasterCard here>>>
Shares of MasterCard have experienced a change of +9.9% in the past month compared to the -1.2% move of the Zacks S&P 500 composite. With a Zacks Rank #2 (Buy), MA is expected to outperform the overall market in the near future. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
Key Takeaways Visa is poised for a fiscal Q4 earnings beat, with EPS projected to rise 15.1% and revenues to grow 12.7%.Higher payment volumes, cross-border demand and digital transactions could fuel Visa's Q4 revenue growth.Visa's 16.3% YTD stock gain and premium valuation favor holding shares over buying ahead of earnings.
Visa Inc. (V - Free Report) is set to report its fourth-quarter fiscal 2026 results on Oct. 27, 2026, after market close. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $3.43 per shareon revenues of $12.08 billion.
The estimate for fiscal fourth-quarter earnings has remained stable over the past 60 days. The bottom-line projection indicates a year-over-year increase of 15.1%. The Zacks Consensus Estimate for quarterly revenues suggests year-over-year growth of 12.7%.
Image Source: Zacks Investment Research
For fiscal 2026, the Zacks Consensus Estimate for Visa’s revenues is pegged at $45.84 billion, implying a rise of 14.6% year over year. The consensus mark for EPS is pegged at $13.22, suggesting a jump of about 15.3% year over year.
The payments juggernaut has a robust history of surpassing earnings estimates. It beat estimates in each of the last four quarters, with the average being 2.8%. This is depicted in the graph below:
Q4 Earnings Whispers for VisaOur proven model predicts a likely earnings beat for the company this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is precisely the case here.
Visa has an Earnings ESP of +0.66% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Shaping Visa’s Q4 ResultsVisa appears well positioned to deliver solid year-over-year growth in fiscal fourth-quarter results, supported by higher consumer spending, rising digital payment adoption and continued growth in cross-border transactions. The Zacks Consensus Estimate calls for a 7.5% increase in total Gross Dollar Volume from the year-ago quarter, while our model projects 7.7% growth.
As the company draws revenues as a set percentage of total transaction value every time a customer makes payments with a debit/credit card, higher spending means more revenue in the form of transaction processing fees. The Zacks Consensus Estimate for total processed transactions points to 9.6% year-over-year growth, slightly above our model's projection of 9.4%.
The consensus mark for total payment volumes indicates a 9.1% year-over-year increase. We expect the metric for U.S. operations alone to jump nearly 8% year over year. Similarly, our model predicts 15.6% year-over-year growth in Latin America and 11.2% in CEMEA.
The Zacks Consensus Estimate for data processing revenues indicates 15% growth in the fiscal fourth quarter from the year-ago level of $5.39 billion. Similarly, the consensus mark for service revenues suggests 12.6% year-over-year growth, whereas we expect the metric to grow 13.3% from $4.6 billion.
Furthermore, the consensus estimate for international transaction revenues indicates 8.9% growth from a year ago. Continuous growth in cross-border volumes is expected to have supported the metric. The factors stated above are expected to have positioned Visa for an earnings beat. However, rising expenses and client incentives (a contra-revenue item) are likely to have partially offset the positive impact of higher volumes.
We expect adjusted total operating expenses for the quarter under review to increase 11.6% year over year due to increased Personnel, Professional Fees, Marketing, and Network and Processing expenses. Meanwhile, the Zacks Consensus Estimate for client incentives is pegged at $4.98 billion for the to-be-reported quarter.
Visa Price Performance & ValuationVisa's stock has gained 16.3% in the year-to-date period. It has outperformed the industry’s 4.2% fall andthe S&P 500’s increase of 10.6%. In comparison, its peers like Mastercard Incorporated (MA - Free Report) and American Express Company (AXP - Free Report) have increased 9.2% and declined 15.3%, respectively, during this time.
YTD Price Performance – V, MA, AXP, Industry & S&P 500 Image Source: Zacks Investment Research
Now, let’s look at the value Visa offers investors at current levels.
The company’s valuation looks somewhat stretched compared with the industry average. Currently, Visa is trading at 26.97X forward 12-month earnings, above the industry’s average of 18.76X, and remains above its five-year median of 25.59X.
Image Source: Zacks Investment Research
In comparison, Mastercard is trading at 27.84X forward 12-month earnings. American Express, on the other hand, is trading at 15.86X now.
How Should You Play Visa Ahead of Q4 Earnings?Visa enters its fiscal fourth-quarter earnings report with plenty working in its favor. Steady consumer spending, higher transaction volumes and cross-border demand should support revenue and earnings growth. Its record of topping estimates adds to that case.
The longer-term story is also taking shape. Visa is expanding stablecoin-linked payments and settlement, building tools for AI-driven shopping and growing its Value-Added Services business. These efforts offer new ways to earn revenue beyond traditional card transactions, without straying far from the network that underpins its business.
Still, expectations are not low. After outperforming the industry and broader market this year, Visa trades above both its industry average and its own five-year median valuation. Higher operating expenses and client incentives could limit how much stronger payment activity flows through to earnings. Competition from alternative payment networks and regulatory scrutiny also remain concerns.
For existing shareholders, the company's strong core business and newer growth opportunities support staying invested through the report. New investors, however, may want to avoid chasing the stock ahead of earnings, particularly with its valuation leaving little room for disappointment.
Key Takeaways Walmart is expanding AI shopping through Agent Profiles and Agent Gateway to improve convenience.Walmart's global e-commerce sales rose 23% in Q2 fiscal 2027, while Marketplace sales surged 52%. Walmart's AI assistant Sparky saw usage jump 70%, with users spending 40% more per order than nonusers. Walmart Inc. (WMT - Free Report) continues to strengthen its digital retail business through investments in artificial intelligence (AI), automation and omnichannel capabilities. The retailer is increasingly using technology to simplify shopping, improve convenience and strengthen customer engagement. Its expanding AI capabilities could also help Walmart capitalize on evolving shopping preferences while creating additional opportunities for e-commerce growth.
Building on this strategy, Walmart recently announced Agent Profiles, Walmart Agent Gateway and dedicated operating rules for AI shopping agents. These initiatives are designed to enable customers to shop through third-party AI assistants while retaining control over purchases. Agent Profiles, expected to launch in November, will allow customers to set spending limits, authorize transactions and monitor purchases made by individual agents.
Meanwhile, Walmart Agent Gateway aims to streamline interactions between AI assistants and its shopping platform. The technology is being developed to help agents identify customers' preferred products without requiring access to their broader purchase histories. By simplifying routine purchases, these capabilities could encourage shopping frequency, improve convenience and strengthen customer loyalty.
Walmart's digital momentum provides a solid foundation for these initiatives. In second-quarter fiscal 2027, global e-commerce sales increased 23%, including 24% growth at Walmart U.S. Marketplace sales surged 52%, while global advertising revenues advanced 38%. Meanwhile, usage of its AI shopping assistant, Sparky, rose 70% year over year, with users spending 40% more per order than nonusers.
Walmart's growing AI ecosystem could further strengthen its competitive position by making product discovery and repeat purchases more convenient. Combined with its broad assortment, competitive pricing and fulfillment network, these capabilities may support sustained digital engagement and sales growth. However, the extent of the benefits will depend on customer adoption, effective execution and Walmart's ability to convert AI-driven shopping activity into profitable transactions.
What Do the Latest Metrics Say About Walmart?Walmart, which competes with Costco Wholesale Corporation (COST - Free Report) and Target Corporation (TGT - Free Report) , has seen its shares gain 14.8% over the past year compared with the industry’s growth of 13.5%. Costco shares have climbed 7.9%, while Target has surged 56.2% in the aforementioned period.
Image Source: Zacks Investment Research
From a valuation standpoint, Walmart's forward 12-month price-to-earnings ratio stands at 38.29, higher than the industry’s 35.1. The company is trading at a premium to Target (with a forward 12-month P/E ratio of 15.75) while trading at a discount to Costco (43.55).
Walmart's stock is closing in on a $1 trillion market cap, and the company just dropped a three-event holiday sales calendar to get there. But a strategy built on aggressive price cuts carries a profit risk that could make or…
Walmart (NASDAQ:WMT | WMT Price Prediction) announced three holiday shopping events on Oct. 26, with its stock close to a $1 trillion market value. As of 10:25 a.m. ET, shares traded at $121.59. That was up 1.42% on the day, 10.01% over the past month and 9.83% year to date, for a market value of about $966.67 billion.
Investors may be counting on a strong holiday season to carry Walmart past $1 trillion. Available sources link the rally to other factors. TIKR attributes the move to investors paying a higher valuation multiple, and TipRanks linked the Oct. 22 gain to comments from an Oppenheimer analyst. That puts a lot of weight on the holidays, because a richer valuation needs profit growth to back it up.
Three Holiday Sales Built Around Lower Prices
Walmart’s holiday calendar, per its press release:
Early Black Friday Deals: Nov. 12 to 15
Black Friday: Nov. 23 to 29. Both Black Friday sales open online at 12:01 a.m. ET and in stores at 6 a.m. local time.
Cyber Monday: Nov. 30 to Dec. 2, online only
Walmart said Walmart+ members get early access to hot deal drops for the first 24 hours of each Black Friday sale. Walmart’s own research found that 60% of shoppers say gift prices affect how they feel about the season, and Walmart said 70% say lower prices would make holiday shopping easier. Walmart is also promoting its new Walmart+ and Sam’s Club Plus bundle at $120 a year. Walmart’s Top Toys list includes 25 toys priced under $25.
Julie Barber, chief merchandising officer for Walmart U.S., summed up the pitch: “It’s all about helping our customers save more, discover more and make more room for what matters.”
A Higher Multiple Drove the Rally
TIKR data shows Walmart closed at $119.89 on Oct. 23, up 15.4% from $103.92 on Sept. 30. Over that period, TIKR shows analysts’ next-12-months earnings estimate stayed at $3.00 a share. The forward price-to-earnings ratio, which measures what investors pay for each dollar of profit expected over the next year, rose from about 35 times to about 40 times, per TIKR. In other words, investors paid more for the same expected earnings. TIKR puts the Street’s mean price target at $127.48, about 6% above the Oct. 23 close.
Why Price Cuts Can Squeeze Profit
Walmart has been putting its gains back into prices. Management said Walmart qualified for about $2.9 billion in tariff refunds and is using much of that money to fund more than 11,000 rollbacks. CEO John Furner said, “We’re investing heavily in price because customers need us to and because we believe it drives market share gains over time.”
TIKR names the main risk: if Walmart keeps reinvesting in lower prices, earnings could fall short. Oppenheimer’s Rupesh Parikh rates the stock Perform. According to TIKR, citing TipRanks, he said the bundle strengthens Walmart’s value proposition but noted a near-term profit headwind.
Higher-margin businesses help cover that cost. In the second quarter of fiscal 2027, global advertising rose 38% and membership fee revenue grew 17%. Adjusted EPS came in at $0.81, beating the $0.74 estimate, according to Walmart’s earnings release filed with the SEC. Even so, the stock fell 9.15% on the day of that report.
Nov. 19 Falls Between the Two Black Friday Sales
Walmart’s next report is expected on Nov. 19, though the company has not made that date official. That falls between its two Black Friday sales. The report covers the fall quarter, and holiday-quarter results won’t come until early next year, so Nov. 19 will give investors their first look at Walmart’s holiday outlook.
Walmart forecast to adjusted EPS of $0.62 to $0.64 for the quarter, and TIKR puts the year-earlier figure at $0.62 and the consensus estimate at $0.64. TIKR says results at or above consensus, along with Walmart’s full-year range of $2.80 to $2.87 held or raised, would support the higher multiple. A result at the low end of guidance would mean a stock TIKR values near 40 times forward earnings had reported flat quarterly earnings.
What to Watch Before the Holidays
The Nov. 19 report, and any update to Walmart’s holiday outlook and full-year guidance
How deep Walmart’s holiday discounts go, and whether management says they are weighing on margins
Whether Walmart’s $120 bundle brings in new members, since membership fees help offset lower prices
Contact [email protected] for any questions or corrections.
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Focus List MethodologyWhen stocks are picked for the Focus List, it reflects our enduring reliance on the power of earnings estimate revisions.
Earnings estimates are expectations of growth and profitability, and are determined by brokerage analysts. Together with company management, these analysts examine every aspect that may affect future earnings, like interest rates, the economy, and sector and industry optimism.
What a company will earn down the road also needs to be taken into consideration, and this is why earnings estimate revisions are so important.
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The Focus List is comprised of stocks hand-picked from a long list of #1 (Strong Buy) or #2 (Buy) ranked companies, meaning that each new addition boasts a bullish earnings consensus among analysts.
It can be very profitable to buy stocks with rising earnings estimates, as stock prices respond to revisions. By adding Focus List stocks, there's a great chance you'll be getting into companies whose future earnings estimates will be raised, which can lead to price momentum.
Focus List Spotlight: Walt Disney (DIS - Free Report) Burbank, CA-based The Walt Disney Company has assets that span movies, television shows and theme parks. Revenues were $94.4 billion in fiscal 2025.
On March 23, 2020, DIS was added to the Focus List at $85.98 per share. Shares have increased 30.87% to $112.52 since then, and the company is a #3 (Hold) on the Zacks Rank.
For fiscal 2026, three analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.04 to $6.92. DIS boasts an average earnings surprise of 6.6%.
Additionally, DIS's earnings are expected to grow 16.7% for the current fiscal year.
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The upcoming report from Altria (MO - Free Report) is expected to reveal quarterly earnings of $1.51 per share, indicating an increase of 4.1% compared to the year-ago period. Analysts forecast revenues of $5.3 billion, representing an increase of 1% year over year.
The consensus EPS estimate for the quarter has undergone a downward revision of 0.3% in the past 30 days, bringing it to its present level. This represents how the covering analysts, as a whole, have reassessed their initial estimates during this timeframe.
Prior to a company's earnings announcement, it is crucial to consider revisions to earnings estimates. This serves as a significant indicator for predicting potential investor actions regarding the stock. Empirical research has consistently demonstrated a robust correlation between trends in earnings estimate revision and the short-term price performance of a stock.
While investors typically use consensus earnings and revenue estimates as indicators of quarterly business performance, exploring analysts' projections for specific key metrics can offer valuable insights.
In light of this perspective, let's dive into the average estimates of certain Altria metrics that are commonly tracked and forecasted by Wall Street analysts.
Analysts predict that the 'Revenues net of excise taxes- Oral Tobacco Products' will reach $694.43 million. The estimate suggests a change of +4.4% year over year.
Analysts forecast 'Revenues net of excise taxes- Smokeable Products' to reach $4.62 billion. The estimate indicates a year-over-year change of +0.6%.
The combined assessment of analysts suggests that 'Operating Companies Income- Reported OCI- Oral Tobacco Products' will likely reach $467.09 million. Compared to the current estimate, the company reported $459.00 million in the same quarter of the previous year.
Analysts' assessment points toward 'Operating Companies Income- Adjusted OCI- Smokeable Products' reaching $3.02 billion. Compared to the current estimate, the company reported $2.96 billion in the same quarter of the previous year.
View all Key Company Metrics for Altria here>>>
Shares of Altria have demonstrated returns of +8% over the past month compared to the Zacks S&P 500 composite's -1.2% change. With a Zacks Rank #2 (Buy), MO is expected to beat the overall market performance in the near future. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
Key Takeaways TGT's Roundel gross billings surged nearly 20% in second-quarter fiscal 2026, boosting advertising revenues.Roundel helped drive 20.1% non-merchandise sales growth, supporting Target's gross margins and revenue mix.Target shares gained 8.9% in three months, outpacing the industry's 1% rise, while trading at a lower P/E.
Target Corporation's (TGT - Free Report) Roundel advertising business is gaining importance as the retailer continues to expand its higher-margin revenue streams. The platform's recent performance underscores the financial value of retail media, which provides an additional revenue opportunity alongside the company's core merchandise operations.
During the second quarter of fiscal 2026, Roundel's gross billings increased nearly 20% year over year, reflecting continued strength in Target's advertising operations. Reported advertising revenues, primarily associated with Roundel, reached $279 million, up from $217 million in the year-ago quarter. For the first six months of 2026, advertising revenues reached $525 million compared with $379 million in the prior-year period.
The momentum is particularly noteworthy because advertising represents a higher-margin revenue opportunity. Target indicated that continued growth in advertising and other non-merchandise sales supported its underlying gross margin performance during the quarter. This suggests that Roundel's expansion is contributing not only to revenue diversification but also to a more favorable business mix. Target reported 20.1% growth in non-merchandise sales during the quarter, citing Roundel advertising as one of the contributors.
Target is also investing in technology capabilities to strengthen its retail media business. These efforts reflect management's emphasis on developing advertising as an integral part of its broader retail operations. Roundel's continued expansion could make advertising an increasingly important component of Target's revenue mix.
How WMT & DG Are Scaling Retail Media Compared With TargetWalmart Inc. (WMT - Free Report) is scaling its retail media business rapidly, with global advertising growing 38% in second-quarter fiscal 2027 and Walmart U.S. advertising also up 38%. Walmart Connect, excluding VIZIO, advanced 43%, while advertising helped improve business mix and e-commerce economics. Walmart also strengthened the platform through its Vibe acquisition, aimed at expanding self-service tools and helping advertisers measure results against actual shopping behavior.
Dollar General Corporation (DG - Free Report) is similarly developing DG Media Network as a profit lever. Dollar General said the network reached $170 million in annual volume at the end of last year and is expected to grow meaningfully. Dollar General is expanding advertiser opportunities across stores, its app and website while increasing digital engagement. Dollar General also identifies DG Media Network growth among the initiatives expected to support gross margin expansion.
How Does Target Stack Up Against Its Industry?Target has seen its shares rally 8.9% over the past three months compared with the industry’s rise of 1%.
Image Source: Zacks Investment Research
What Does Target’s Current Valuation Suggest?From a valuation standpoint, Target's forward 12-month price-to-earnings ratio stands at 15.75, lower than the industry’s 28.91. However, the stock is trading above its 12-month median level of 15.01.
Image Source: Zacks Investment Research
What Do Earnings Estimates Signal for Target?The Zacks Consensus Estimate for Target’s current fiscal-year sales and earnings per share implies year-over-year growth of 5.1% and 37.8%, respectively. For the next fiscal year, the consensus estimate indicates a 3.1% rise in sales but a decline of 9.5% in earnings per share.
Image Source: Zacks Investment Research
Target’s Investment CaseTarget’s improving sales momentum, growing digital capabilities and expanding higher-margin businesses, including Roundel, strengthen its investment appeal. Continued investments in merchandising, technology and customer experience support sustainable growth and profitability. The stock’s attractive valuation relative to the industry, coupled with encouraging earnings expectations and improving business fundamentals, presents a compelling opportunity for investors seeking long-term growth. Target currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.82% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
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Stock to Watch: Exxon Mobil Holdings (XOM - Free Report) Over the past decade, ExxonMobil Holdings Corporation has undergone a significant transformation, reshaping its business to adapt to evolving energy demands, financial discipline and environmental considerations. Traditionally reliant on oil and gas, the company has streamlined operations and focused capital on high-return, low-cost projects. ExxonMobil has achieved nearly $16.3 billion in structural cost savings since 2019, strategically enhancing its earnings power and improving cost efficiency.
XOM is a #1 (Strong Buy) on the Zacks Rank, with a VGM Score of A.
It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 13.44; value investors should take notice.
Four analysts revised their earnings estimate higher in the last 60 days for fiscal 2026, while the Zacks Consensus Estimate has increased $1.45 to $13.63 per share. XOM also boasts an average earnings surprise of +2.4%.
With a solid Zacks Rank and top-tier Value and VGM Style Scores, XOM should be on investors' short list.
Ford F is slated to release third-quarter 2026 results on Oct. 28, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter's EPS and automotive revenues is pegged at 39 cents and $45.67 billion, respectively.
Verizon Communications (VZ - Free Report) came out with quarterly earnings of $1.31 per share, beating the Zacks Consensus Estimate of $1.27 per share. This compares to earnings of $1.21 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +3.15%. A quarter ago, it was expected that this largest U.S. cellphone carrier would post earnings of $1.27 per share when it actually produced earnings of $1.3, delivering a surprise of +2.36%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Verizon, which belongs to the Zacks Wireless National industry, posted revenues of $34.31 billion for the quarter ended September 2026, missing the Zacks Consensus Estimate by 1.43%. This compares to year-ago revenues of $33.82 billion. The company has topped consensus revenue estimates just once over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Verizon shares have added about 9.7% since the beginning of the year versus the S&P 500's gain of 11.4%.
What's Next for Verizon?While Verizon has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Verizon was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.15 on $37.27 billion in revenues for the coming quarter and $5.03 on $140.96 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Wireless National is currently in the top 42% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Another stock from the same industry, ATN International (ATNI - Free Report) , has yet to report results for the quarter ended September 2026. The results are expected to be released on November 4.
This provider of telecommunications services is expected to post quarterly earnings of $0.19 per share in its upcoming report, which represents a year-over-year change of +5.6%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
ATN International's revenues are expected to be $184.9 million, up 1% from the year-ago quarter.
For the quarter ended September 2026, Verizon Communications (VZ - Free Report) reported revenue of $34.31 billion, up 1.5% over the same period last year. EPS came in at $1.31, compared to $1.21 in the year-ago quarter.
The reported revenue represents a surprise of -1.43% over the Zacks Consensus Estimate of $34.81 billion. With the consensus EPS estimate being $1.27, the EPS surprise was +3.15%.
While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.
Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.
Here is how Verizon performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Wireless retail postpaid ARPA: $168.08 compared to the $168.77 average estimate based on three analysts.Wireless - Retail Core Prepaid Connections: 19.34 million compared to the 19.4 million average estimate based on three analysts.Churn rate - Wireless retail postpaid phone: 0.9% versus the three-analyst average estimate of 0.9%.Wireless - Retail Postpaid Connections: 126.83 million compared to the 126.85 million average estimate based on three analysts.Operating Revenues- Wireless equipment revenues: $5.12 billion compared to the $5.45 billion average estimate based on five analysts. The reported number represents a change of -9% year over year.Operating Revenues- Service revenues and other: $29.2 billion versus $29.29 billion estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +3.5% change.Operating Revenues- Business: $7.02 billion versus the four-analyst average estimate of $7.19 billion. The reported number represents a year-over-year change of -1.7%.Operating Revenues- Consumer: $26.43 billion compared to the $26.9 billion average estimate based on four analysts. The reported number represents a change of +1.3% year over year.Operating Revenues- Business- Other: $2.47 billion compared to the $2.6 billion average estimate based on three analysts.Operating Revenues- Business- Wireless equipment: $839 million compared to the $831.97 million average estimate based on three analysts.Operating Revenues- Business- Mobility and broadband service: $3.71 billion compared to the $3.78 billion average estimate based on three analysts.Operating Revenues- Consumer- Other: $2.38 billion versus the three-analyst average estimate of $2.4 billion. The reported number represents a year-over-year change of +137.6%.View all Key Company Metrics for Verizon here>>>
Shares of Verizon have returned -5.1% over the past month versus the Zacks S&P 500 composite's -1.2% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.
Key Takeaways VZ's Q3 earnings rose 8.3% to $1.31 per share, beating estimates, while revenues missed expectations.VZ added 406,000 postpaid phone subscribers as adjusted EBITDA rose 8% to a record $13.80 billion.Verizon raised its 2026 EPS outlook to $5.04-$5.06 and postpaid phone additions forecast to 1.1M-1.2M. Verizon Communications Inc. (VZ - Free Report) reported adjusted earnings of $1.31 per share in the third quarter of 2026, up 8.3% year over year and ahead of the Zacks Consensus Estimate of $1.27 by 3.15%.
Total operating revenues increased 1.5% year over year to $34.31 billion but missed the consensus mark of $34.81 billion by 1.43%. Strong service revenue growth, improved operating efficiency and robust subscriber additions supported profitability. Verizon delivered 406,000 postpaid phone net additions, its strongest third-quarter performance in five years.
Service Revenues Grow Despite Equipment WeaknessService revenues and other increased 3.5% year over year to $29.20 billion, supported by improving mobility and broadband trends. Wireless equipment revenues declined 9% to $5.12 billion, reflecting reduced upgrade activity and disciplined promotional spending.
Mobility and broadband service revenues reached $23.5 billion, increasing 2.9% year over year compared with 2.8% growth in the preceding quarter. Management attributed lower equipment sales to customers retaining devices longer and its strategy of reducing handset subsidies.
Consumer Segment Benefits From Service GrowthConsumer operating revenues increased 1.3% year over year to $26.43 billion. Mobility and broadband service revenues rose 3.6% to $19.78 billion, while wireless equipment revenues declined 10.3% to $4.28 billion. Other revenues grew 6% to $2.38 billion.
Consumer operating income improved 5.6% to $8.09 billion, with the operating margin expanding to 30.6% from 29.4%. Segment EBITDA increased 6.5% to $11.97 billion, while the corresponding margin improved 230 basis points to 45.3%.
Business Segment Records Higher ProfitabilityBusiness operating revenues rose 2.6% year over year to $7.02 billion. Mobility and broadband service revenues declined 0.8% to $3.71 billion, while wireless equipment revenues fell 1.6% to $839 million. Other revenues increased 10% to $2.47 billion.
Business operating income climbed 19.4% to $855 million, supported by lower selling, general and administrative expenses. Segment EBITDA advanced 13% to $1.94 billion, with the corresponding margin expanding to 27.6% from 25.1%.
Margins Expand Through Cost DisciplineTotal operating expenses declined 0.2% year over year to $25.66 billion. Selling, general and administrative expenses decreased 3.5% to $7.48 billion, while wireless equipment costs fell 10.2%. However, depreciation and amortization expenses increased 10.3% to $5.10 billion.
Operating income rose 6.7% to $8.65 billion. Consolidated net income increased 5.2% to $5.32 billion, while net income attributable to Verizon improved 5% to $5.20 billion. Adjusted EBITDA increased 8% to a record $13.80 billion, with the adjusted EBITDA margin expanding 240 basis points to 40.2%. Interest expenses increased 17.2% to $1.95 billion.
Wireless Gains Offset Slower Broadband AdditionsVerizon added 137,000 postpaid accounts, its best quarterly performance in more than a decade. Retail postpaid phone churn improved four basis points year over year to 0.94%, while Consumer postpaid phone churn declined to 0.87%.
Broadband net additions totaled 314,000, down from 322,000 a year earlier. Fiber broadband additions reached 155,000, while fixed wireless access contributed 159,000. Total broadband connections reached 17.4 million. The company also announced an agreement valued at more than $2 billion with Amazon Web Services to support AI infrastructure.
Cash Flow Strengthens Shareholder ReturnsThird-quarter operating cash flow increased 2.2% year over year to $11.52 billion, while free cash flow improved 12.1% to $7.80 billion. Capital expenditures totaled $3.72 billion, compared with $4.31 billion a year earlier.
For the first nine months, free cash flow increased 14.3% to $18.01 billion. Verizon returned $12.8 billion to shareholders through dividends and repurchases. Net unsecured debt stood at $123.72 billion, down from $128.68 billion in the preceding quarter. Net unsecured debt to adjusted EBITDA improved sequentially to 2.3 times.
VZ Raises 2026 Earnings and Subscriber OutlookVerizon raised its 2026 adjusted earnings guidance to $5.04-$5.06 per share, implying 7%-7.5% year-over-year growth, compared with its previous projection of 6%-7%.
The company increased its postpaid phone net additions forecast to 1.1 million-1.2 million. Mobility and broadband service revenue growth is expected in the upper half of the 2.5%-3% range, while free cash flow growth is projected to approach 12%. Capital expenditure guidance remains unchanged at $16-$16.5 billion.
Zacks RankVerizon currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming ReleasesArista Networks Inc. (ANET - Free Report) is scheduled to release third-quarter 2026 earnings on Nov. 3. The Zacks Consensus Estimate for earnings is pegged at $1.08 per share, suggesting growth of 44% from the year-ago reported figure.
Arista has a long-term earnings growth expectation of 22.8%. Arista delivered an average earnings surprise of 8.9% in the last four reported quarters.
Akamai Technologies, Inc. (AKAM - Free Report) is slated to release third-quarter 2026 earnings on Nov. 5. The Zacks Consensus Estimate for earnings is pegged at $1.67 per share, indicating a 10.2% decline from the year-ago reported figure.
Akamai has a long-term earnings growth expectation of 5.9%. Akamai delivered an average earnings surprise of 4.8% in the last four reported quarters.
GLOBALFOUNDRIES Inc. (GFS - Free Report) is set to release third-quarter 2026 earnings on Nov. 4. The Zacks Consensus Estimate for earnings is pegged at 51 cents per share, implying a rise of 24.4% from the year-ago reported figure.
GLOBALFOUNDRIES has a long-term earnings growth expectation of 21.2%. GFS delivered an average earnings surprise of 10.9% in the last four reported quarters.
Trhy sice zahajují týden relativně klidně, pod povrchem však narůstá řada rizik. Investoři budou sledovat, zda Fed a další centrální banky potvrdí jestřábí postoj vůči inflaci, zatímco technologický sektor čeká další test v podobě výsledků největších cloudových hráčů.
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Pražská burza zahájila nový týden růstem, když za podpory pozitivního sentimentu na globálních akciových trzích posílila měřeno indexem PX o 0,56 % na 2 598 bodů. Dařilo se akciím Erste Bank, které stouply o 2,31% na 2 568 Kč. Komerční banka si polepšila o 0,96 % na 1 003 Kč. Významný růst zaznamenala také zbrojovka CSG, jejíž akcie posílily o 3,10 % na 345 Kč, zatímco Colt CZ přidal 0,48 % na 833 Kč. ČEZ stagnoval na páteční úrovni 1 368 Kč a beze změny zakončila rovněž pojišťovna VIG na 1 680 Kč. Naopak Moneta Money Bank oslabila o 1,07% s oceněním nad 184 Kč.
Key Takeaways GS benefits from stronger deal activity, equity trading, wealth assets and alternative fundraising.C's improving net interest income, streamlined operations and private-market expansion support growth.GS and C trade below industry valuation multiples, with average price targets implying 21.6% and 23.4% upside. The third-quarter 2026 earnings season is in full swing now. Most of the major investment banks have reported their quarterly financial numbers. Here, we recommend two giant investment banks to buy for various reasons.
These are: The Goldman Sachs Group Inc. (GS - Free Report) and Citigroup Inc. (C - Free Report) . Both investment banks have reported solid third-quarter 2026 earnings results. Year to date, these stocks have significantly lagged the benchmark S&P 500 Index.
As a result, both stocks are currently available at attractive valuations along with impressive price upside potential in the short-term. Finally, each of our picks currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The chart below shows the price performance of our two picks year to date.
Image Source: Zacks Investment Research
The Goldman Sachs Group Inc.Goldman Sachs benefited from strong revenue growth in the Global Banking & Markets and Asset & Wealth Management businesses. Improving deal activity and robust equity trading of GS should support fee-income growth.
Growing wealth assets, alternative fundraising and targeted acquisitions should expand GS’ recurring revenues. Its strong capital and liquidity position should support long-term growth and shareholder return. GS has a current dividend yield of 2.28%.
Strong Estimate RevisionsGoldman Sachs has an expected revenue and earnings growth rate of 28% and 10.9%, respectively, for fourth-quarter 2026. The Zacks Consensus Estimate for the current quarter’s earnings has improved 0.8% in the past seven days.
GS has an expected revenue and earnings growth rate of 1% and 4.3%, respectively, for the next year. The Zacks Consensus Estimate for the next year’s earnings has improved 0.5% in the past seven days.
Image Source: Zacks Investment Research
Attractive ValuationsThe stock has a forward P/E of 12.35X compared with the industry’s P/E of 12.80X and the S&P 500’s P/E of 18.63X. It has a P/S of 1.81X compared with the industry’s P/S of 1.88X and the S&P 500’s P/S of 3.10X. GS has a P/B of 2.04X compared with the industry’s P/B of 2.46X and the S&P 500’s P/B of 3.64X.
Impressive Price UpsideThe short-term average price target of brokerage firms represents an increase of 21.6% from the last closing price of $875.68. The brokerage target price is currently in the range of $875-$1,280. This indicates a maximum upside of 46.2% and no downside.
Image Source: Zacks Investment Research
Citigroup Inc.Citigroup benefited from higher net interest income (NII). Despite the Fed rate hike, improving loan demand is likely to aid NII in the future. C’s simplified operating structure is improving efficiency and directing capital toward higher-return businesses, while expanding Citi Token Services in Japan and the UAE to support transaction banking growth.
Expanding private-market capabilities may boost C’s fee income, while strong liquidity and improving efficiency support capital returns. Citigroup is broadening its private-credit and private-market capabilities through partnerships and product innovation. C has a current dividend yield of 2.22%.
Strong Estimate RevisionsCitigroup has an expected revenue and earnings growth rate of 15.9% and 32%, respectively, for fourth-quarter 2026. The Zacks Consensus Estimate for the current quarter’s earnings has improved 0.3% in the past seven days.
C has an expected revenue and earnings growth rate of 4.8% and 14.5%, respectively, for the next year. The Zacks Consensus Estimate for the next year’s earnings has improved 0.1% in the past seven days.
Image Source: Zacks Investment Research
Attractive ValuationsThe stock has a forward P/E of 10.55X compared with the industry’s P/E of 12.80X and the S&P 500’s P/E of 18.63X. It has a P/S of 1.17X compared with the industry’s P/S of 1.88X and the S&P 500’s P/S of 3.10X. C has a P/B of 1.06X compared with the industry’s P/B of 2.46X and the S&P 500’s P/B of 3.64X.
Impressive Price UpsideThe short-term average price target of brokerage firms represents an increase of 23.4% from the last closing price of $120.62. The brokerage target price is currently in the range of $110-$170. This indicates a maximum upside of 40.9% and no downside.
McDonald's and Starbucks have gone in opposite directions this year, and each stock tells a very different story about dividend safety, valuation, and who actually belongs in a retirement portfolio right now.
Between McDonald’s (NYSE:MCD | MCD Price Prediction) and Starbucks (NASDAQ:SBUX), which restaurant dividend holds up better for an investor focused on income right now? The two stocks have gone in opposite directions this year. McDonald’s shares are down 16.68% year-to-date. Starbucks is up 23.26% as its turnaround gains traction. An income investor should care less about the stock charts and more about the cash flow statements, which tell a clearer story.
Valuation: McDonald’s Delivers More Cash Per Dollar
McDonald’s trades at a P/E of 21 and 24 times free cash flow. Starbucks trades at a P/E of 62 and 47 times free cash flow. Even on forward earnings, Starbucks still trades at a 31x multiple, so the market has already priced in much of the recovery. Free cash flow yield is 4.09% at McDonald’s against 2.13% at Starbucks.
Winner: McDonald’s.
Dividend Safety: McDonald’s Covers Its Payout With Room to Spare
In 2025, McDonald’s produced $7.186 billion in free cash flow and paid out $5.115 billion in dividends. Roughly 71% of free cash flow went to dividends, and the ratio stayed near 71% in the first half of 2026. The company still found room to buy back $2.056 billion of stock last year. A 46.1% operating margin and a franchise model that generates about 90% of restaurant margin dollars from royalties make that cash stream particularly predictable.
Starbucks had a rockier fiscal 2025. Free cash flow came to $2.442 billion, while dividends reached $2.771 billion, roughly 113% of free cash flow. Coverage has since improved to about 78% over the first three quarters of fiscal 2026. The company also used China joint venture proceeds to repay about $1.8 billion of debt, which brought leverage down to 2.9x. CFO Cathy Smith said the stronger balance sheet lets Starbucks “maintain our competitive dividend.” Still, a 9.6% operating margin leaves far less buffer if the recovery stalls.
Recent raises point the same way. McDonald’s lifted its quarterly payout to $1.93 from $1.86, a 3.8% increase, and its record shows a higher quarterly amount every year since 2009. Starbucks rose from $ 0.62 to $ 0.63, a 1.6% increase. McDonald’s also yields more, at 2.91% compared with 2.41%.
Winner: McDonald’s.
Growth Trajectory: Starbucks Owns the Momentum
Starbucks posted global comparable sales growth of 7.9% in fiscal Q3, with transactions up 4.2%. EPS came in at $0.85, well ahead of the $0.65 estimate, and management raised full-year EPS guidance to $2.55-$2.65.
McDonald’s is losing speed. Global comps grew only 1.3% in Q2, U.S. comps rose 0.8%, and July U.S. comps were “slightly negative.” Management also pushed its 50,000-restaurant goal back to 2028. CEO Chris Kempczinski put the blame on execution: “We don’t have a strategy problem. We didn’t execute at the level we needed to in the second quarter.”
Winner: Starbucks.
Verdict: McDonald’s Offers the Sturdier Retirement Dividend
For an income-focused investor, McDonald’s wins. It pays a higher yield, comfortably covers that payout, trades at a lower multiple, and keeps a steady record of annual raises. Its weak spot right now is sales growth, but slow growth doesn’t put the dividend at risk. As Jim Cramer put it on Mad Money, “McDonald’s has come through difficult stretches before. It’s in their DNA.”
Starbucks suits a different reader: a younger investor focused on total return who is comfortable paying a premium for a turnaround and can live with dividend coverage that only recently got back under 100%. The momentum is real. The dividend has less margin for error.
Next, keep an eye on McDonald’s upcoming earnings report to see whether U.S. comps recover after the July decline, and on Starbucks’ fiscal Q4 to see whether U.S. comps hit the guided 6.5% or better.
Contact [email protected] for any questions or corrections.
Wall Street analysts expect Starbucks (SBUX - Free Report) to post quarterly earnings of $0.73 per share in its upcoming report, which indicates a year-over-year increase of 40.4%. Revenues are expected to be $9.27 billion, down 3.1% from the year-ago quarter.
Over the last 30 days, there has been a downward revision of 0.5% in the consensus EPS estimate for the quarter, leading to its current level. This signifies the covering analysts' collective reconsideration of their initial forecasts over the course of this timeframe.
Before a company reveals its earnings, it is vital to take into account any changes in earnings projections. These revisions play a pivotal role in predicting the possible reactions of investors toward the stock. Multiple empirical studies have consistently shown a strong association between trends in earnings estimates and the short-term price movements of a stock.
While it's common for investors to rely on consensus earnings and revenue estimates for assessing how the business may have performed during the quarter, exploring analysts' forecasts for key metrics can yield valuable insights.
With that in mind, let's delve into the average projections of some Starbucks metrics that are commonly tracked and projected by analysts on Wall Street.
According to the collective judgment of analysts, 'Net Revenues- Company-operated stores' should come in at $7.42 billion. The estimate indicates a change of -5.7% from the prior-year quarter.
Analysts' assessment points toward 'Net Revenues- Licensed stores' reaching $1.21 billion. The estimate indicates a change of +10.9% from the prior-year quarter.
Analysts predict that the 'Net Revenues- Other' will reach $639.62 million. The estimate indicates a year-over-year change of +4.2%.
The consensus estimate for 'Net Revenues- Channel Development' stands at $571.02 million. The estimate indicates a year-over-year change of +5.2%.
Analysts expect 'Net Revenues- North America' to come in at $7.34 billion. The estimate indicates a change of +6.3% from the prior-year quarter.
Based on the collective assessment of analysts, 'Net Revenues- Company-operated stores- International' should arrive at $813.60 million. The estimate suggests a change of -48.6% year over year.
It is projected by analysts that the 'Net Revenues- Licensed stores- International' will reach $593.65 million. The estimate indicates a year-over-year change of +26%.
The consensus among analysts is that 'Net Revenues- Licensed stores- North America' will reach $626.23 million. The estimate suggests a change of +0.7% year over year.
The collective assessment of analysts points to an estimated 'Total Stores' of 41,477 . The estimate is in contrast to the year-ago figure of 40,990 .
Analysts forecast 'Comparable Store Sales - International - Sales Growth' to reach 3.2%. Compared to the current estimate, the company reported 3.0% in the same quarter of the previous year.
The combined assessment of analysts suggests that 'Total Stores - International' will likely reach 23,157 . Compared to the present estimate, the company reported 22,679 in the same quarter last year.
The average prediction of analysts places 'Total Stores - North America' at 18,331 . The estimate is in contrast to the year-ago figure of 18,311 .
View all Key Company Metrics for Starbucks here>>>
Over the past month, Starbucks shares have recorded returns of +6.3% versus the Zacks S&P 500 composite's -1.2% change. Based on its Zacks Rank #2 (Buy), SBUX will likely outperform the overall market in the upcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
Colgate-Palmolive heads into earnings with a 21% rally behind it, a demanding valuation, and a North American business that has shrunk for four straight quarters. Something has to give, and Friday's report may reveal whether the safe-haven story still holds.
Colgate-Palmolive (NYSE:CL | CL Price Prediction) reports third-quarter results on Friday, Oct. 30. The stock has rose 21.87% year to date. That rally puts a premium price on a business that is still struggling to grow in the U.S.
Strong Beats, a Weak Home Market and a Rich Multiple
Last quarter, Colgate posted Base Business EPS of $0.99, beating the $0.95 consensus, on revenue of $5.36B (+4.9% YoY). Gross margin expanded 140 bps to 61.5% even as advertising rose 15% to $777M. Management raised its Base Business EPS growth outlook to mid-single digits and lifted gross margin guidance to roughly flat.
North America was the problem. Net sales fell 3.0%, the fourth straight quarterly decline, with volume down 3.9%. Shares slid 1.56% the day after the report despite the beat.
Momentum has since returned. CL gained 10.05% over the past month and trades around 24x the full-year 2026 EPS consensus. That is a demanding multiple for a company guiding to 1% to 4% organic growth.
Wall Street Expects Modest Q3 Growth
Metric
Consensus
Year-Ago Actual
Implied YoY Growth
Q3 2026 EPS
$0.9253
$0.91
1.7%
Q3 2026 Revenue
$5.33B
$5.13B
4.0%
FY 2026 EPS
$3.8668
$3.69
4.8%
FY 2026 Revenue
$21.40B
$20.38B
5.0%
Colgate has beaten EPS estimates six straight quarters.
U.S. Recovery and Oil Costs Will Test the Premium
North America is my first focus. On the Q2 call, management said consumption was about flat while shipments fell 3% as retailers cut inventory and Colgate lost some share. Management promised “surgical actions by category and channel”, more advertising and fixes to select price spreads, but warned it “won’t be a linear improvement.”
Margins are the hidden risk. Management called Q3 largely locked in but expected cost of goods and tariffs to peak in the back half, highlighting Q4 risk with oil “more in the $90 range.” WTI crude hit $107.89 per barrel on Oct. 20. You should listen closely for any change to the fourth-quarter gross margin outlook.
Mix matters too. Management expects a more volume-driven second half after pricing carried the first half, and it does not expect the same Latin American FX benefit. Hill’s faces a about flat U.S. pet category plus a 200 basis point volume drag from private label exits.
Analysts are already reducing. The FY2026 EPS consensus saw three downward revisions and zero upward revisions over the past 30 days.
A Defensive Premium Now Requires U.S. Proof
Colgate’s 63 consecutive years of dividend increases and its 41.3% global toothpaste share explain why investors treat it as a safe haven. At about 24x earnings, the stock prices in steady execution. If the U.S. shows sequential improvement and margin guidance holds against higher oil, the premium looks earned. If costs rose while North America keeps contracting, this earnings report could expose how much of the rally rests on reputation.
Contact [email protected] for any questions or corrections.
The upcoming report from Norwegian Cruise Line (NCLH - Free Report) is expected to reveal quarterly earnings of $0.91 per share, indicating a decline of 24.2% compared to the year-ago period. Analysts forecast revenues of $2.87 billion, representing a decline of 2.2% year over year.
Over the last 30 days, there has been a downward revision of 7% in the consensus EPS estimate for the quarter, leading to its current level. This signifies the covering analysts' collective reconsideration of their initial forecasts over the course of this timeframe.
Before a company reveals its earnings, it is vital to take into account any changes in earnings projections. These revisions play a pivotal role in predicting the possible reactions of investors toward the stock. Multiple empirical studies have consistently shown a strong association between trends in earnings estimates and the short-term price movements of a stock.
While investors usually depend on consensus earnings and revenue estimates to assess the business performance for the quarter, delving into analysts' forecasts for certain key metrics often provides a more comprehensive understanding.
With that in mind, let's delve into the average projections of some Norwegian Cruise Line metrics that are commonly tracked and projected by analysts on Wall Street.
Analysts expect 'Revenue- Onboard and other' to come in at $884.41 million. The estimate points to a change of -0.4% from the year-ago quarter.
Analysts predict that the 'Revenue- Passenger ticket' will reach $1.98 billion. The estimate indicates a year-over-year change of -3.6%.
Based on the collective assessment of analysts, 'Passenger Cruise Days' should arrive at 7062 thousands of days. Compared to the current estimate, the company reported 6828 thousands of days in the same quarter of the previous year.
It is projected by analysts that the 'Capacity Days' will reach 6796 thousands of days. The estimate is in contrast to the year-ago figure of 6418 thousands of days.
Analysts forecast 'Net Yield' to reach $313.17 . The estimate is in contrast to the year-ago figure of $341.89 .
The consensus among analysts is that 'Occupancy percentage' will reach 103.9%. Compared to the present estimate, the company reported 106.4% in the same quarter last year.
According to the collective judgment of analysts, 'Fuel price per metric ton, net of hedges' should come in at $791.47 . The estimate is in contrast to the year-ago figure of $744.00 .
Analysts' assessment points toward 'Net Cruise Cost per Capacity Day' reaching $185.86 . The estimate compares to the year-ago value of $186.03 .
The average prediction of analysts places 'Gross Cruise Cost per Capacity Day' at $295.04 . The estimate is in contrast to the year-ago figure of $301.95 .
The combined assessment of analysts suggests that 'Net Cruise Cost Excluding Fuel' will likely reach $1062.98 . The estimate compares to the year-ago value of $1017.97 .
The consensus estimate for 'Total Passengers carried' stands at 915,799 . Compared to the current estimate, the company reported 803,268 in the same quarter of the previous year.
The collective assessment of analysts points to an estimated 'Adjusted Net Cruise Cost Excluding Fuel' of $1.04 billion. Compared to the present estimate, the company reported $998.99 million in the same quarter last year.
View all Key Company Metrics for Norwegian Cruise Line here>>>
Shares of Norwegian Cruise Line have experienced a change of +3.4% in the past month compared to the -1.2% move of the Zacks S&P 500 composite. With a Zacks Rank #3 (Hold), NCLH is expected to mirror the overall market performance in the near future. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.
Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.
Zacks Premium also includes the Zacks Style Scores.
What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.
Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.
VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.82% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.
Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.
Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Paypal (PYPL - Free Report) PayPal Holdings, Inc., a San Jose, CA-based company, has emerged as one of the largest online payment solutions providers on the back of its product portfolio and two-sided platform that enables it to offer a smooth and secure transaction facility to both customers and merchants.
PYPL is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
Momentum investors should take note of this Business Services stock. PYPL has a Momentum Style Score of B, and shares are up 3.6% over the past four weeks.
One analyst revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $0.01 to $5.39 per share. PYPL boasts an average earnings surprise of +5.3%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, PYPL should be on investors' short list.
WASHINGTON--(BUSINESS WIRE)--Ditto, the data platform for unstoppable operations, today announced that Qualcomm Technologies, Inc., through its Qualcomm Government Technologies (QGOV) division, used Ditto Propagate and the Ditto Edge Sync applications as the Software Defined Network and Assured Data Layer in its tactical-edge demonstration at AUSA 2026, held October 12-14 at the Walter E. Washington Convention Center. In the demonstration, Propagate bridged disparate waveforms and fielded tacti.
Qualcomm (QCOM - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Over the past month, shares of this chipmaker have returned -12.9%, compared to the Zacks S&P 500 composite's -1.2% change. During this period, the Zacks Electronics - Semiconductors industry, which Qualcomm falls in, has lost 21.7%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Qualcomm is expected to post earnings of $2.16 per share for the current quarter, representing a year-over-year change of -28%. Over the last 30 days, the Zacks Consensus Estimate has changed -2%.
The consensus earnings estimate of $10.52 for the current fiscal year indicates a year-over-year change of -12.6%. This estimate has remained unchanged over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $10.02 indicates a change of -4.8% from what Qualcomm is expected to report a year ago. Over the past month, the estimate has changed -0.2%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Qualcomm is rated Zacks Rank #4 (Sell).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Qualcomm, the consensus sales estimate for the current quarter of $10.15 billion indicates a year-over-year change of -10%. For the current and next fiscal years, $42.9 billion and $44.49 billion estimates indicate -2.8% and +3.7% changes, respectively.
Last Reported Results and Surprise HistoryQualcomm reported revenues of $9.95 billion in the last reported quarter, representing a year-over-year change of -4%. EPS of $2.21 for the same period compares with $2.77 a year ago.
Compared to the Zacks Consensus Estimate of $9.71 billion, the reported revenues represent a surprise of +2.43%. The EPS surprise was -0.45%.
Over the last four quarters, Qualcomm surpassed consensus EPS estimates three times. The company topped consensus revenue estimates two times over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Qualcomm is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Qualcomm. However, its Zacks Rank #4 does suggest that it may underperform the broader market in the near term.
Moderna Inc. (NASDAQ:MRNA) investors spent months treating the company's cancer vaccine as a potential cure. Last week, leaked trial data delivered a reality check.
Intel (NASDAQ: INTC) could have another catalyst to reclaim the $100 level as rising demand for artificial intelligence (AI) infrastructure supports its server processor business, according to RBC Capital.
The investment bank reiterated its ‘Sector Perform’ rating on the semiconductor giant, maintaining a $100 price target.
As of press time, Intel shares were trading at $86.96, leaving the price target approximately 15% above that level.
INTC one-week stock price chart. Source: Finbold
RBC expects Intel to deliver another earnings beat and raise its outlook, supported by robust demand for agentic AI, which refers to AI systems capable of carrying out tasks with limited human intervention.
Impact on Intel revenue
The firm anticipates that this demand will support at least a 5% revenue beat and a 3% to 5% increase in guidance. Double-digit growth in server CPU volumes is also expected to continue into 2027, with a favorable product mix and average selling prices potentially providing additional support.
The server CPU opportunity is particularly important as AI infrastructure spending expands beyond graphics processing units (GPUs). CPUs remain essential for coordinating workloads, managing data and supporting the broader computing infrastructure used to operate AI systems.
Despite the positive outlook for server processors, supply availability remains a key uncertainty. RBC also highlighted weak PC demand as an overhang, reflecting the risk that softness in Intel’s traditional computing business could offset gains elsewhere.
Improved Panther Lake CPU availability could boost yields on Intel’s 18A process, while advances in foundry operations and packaging could strengthen its competitive position. RBC expects EMIB-T advanced packaging to generate $3 billion to $5 billion in 2028.
Wall Street is mainly bullish on INTC stock
Meanwhile, broader analyst sentiment toward INTC shares is more positive. According to TradingView forecasts, the average one-year price target stands at $119.85, implying approximately 37.82% upside from the stock’s current price.
The forecast range extends from $80 to $200, highlighting the substantial uncertainty surrounding Intel’s longer-term prospects.
The analyst-rating distribution leans toward a ‘Buy’ consensus, with 14 ‘Strong Buy’ ratings, five ‘Buy’ ratings, 32 ‘Hold’ ratings, and one’ Strong Sell’ rating among 52 analysts.
Intel is scheduled to report third-quarter results on October 29, with investors watching for stronger AI-driven revenue and easing supply constraints.
The company reported second-quarter revenue of $16.1 billion, up 25% year over year, while Data Center and AI revenue surged 59% to $6.3 billion, supporting RBC’s growth outlook.
However, Intel raised its 2026 capital expenditure forecast to $20 billion from $18 billion to meet AI demand, increasing investment costs. Its foundry business also faces challenges, with just $293 million of its $5.8 billion in second-quarter revenue coming from external customers.
SummaryIntel Corporation maintains a Buy rating, with conviction rising as the stock trades near $87 ahead of Q3 earnings.Recent INTC stock volatility was driven by sector sentiment and competitive headlines, not by changes in Intel’s fundamentals or earnings outlook.Server segment strength—48% ASP growth and 61% revenue gain—offsets PC weakness; volume growth is the next key lever.14A process milestone and customer traction are critical forward catalysts, while PC market softness poses near-term risk for INTC shareholders. JHVEPhoto/iStock Editorial via Getty Images
Intel Corporation (INTC) shares have been on quite a ride over the past month, even though the company has been pretty quiet. When I last wrote about Intel on Sept. 10, the stock was
5.19K Followers
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Analysts on Wall Street project that Intel (INTC - Free Report) will announce quarterly earnings of $0.39 per share in its forthcoming report, representing an increase of 69.6% year over year. Revenues are projected to reach $16.44 billion, increasing 20.4% from the same quarter last year.
Over the past 30 days, the consensus EPS estimate for the quarter has been adjusted upward by 1.4% to its current level. This demonstrates the covering analysts' collective reassessment of their initial projections during this period.
Before a company announces its earnings, it is essential to take into account any changes made to earnings estimates. This is a valuable factor in predicting the potential reactions of investors toward the stock. Empirical research has consistently shown a strong correlation between trends in earnings estimate revisions and the short-term price performance of a stock.
While it's common for investors to rely on consensus earnings and revenue estimates for assessing how the business may have performed during the quarter, exploring analysts' forecasts for key metrics can yield valuable insights.
With that in mind, let's delve into the average projections of some Intel metrics that are commonly tracked and projected by analysts on Wall Street.
The combined assessment of analysts suggests that 'Net Revenues- Total Intel Products Group' will likely reach $15.39 billion. The estimate points to a change of +21.6% from the year-ago quarter.
Analysts forecast 'Net Revenues- Total Intel Products Group- Data Center and AI' to reach $6.46 billion. The estimate suggests a change of +56.9% year over year.
It is projected by analysts that the 'Net Revenues- Total Intel Products Group- Client Computing and Physical AI Group' will reach $8.93 billion. The estimate indicates a change of +4.6% from the prior-year quarter.
Analysts' assessment points toward 'Net Revenues- All other- Total' reaching $681.67 million. The estimate suggests a change of -31.4% year over year.
According to the collective judgment of analysts, 'Net Revenues- Intel Foundry Services' should come in at $6.05 billion. The estimate indicates a year-over-year change of +42.8%.
View all Key Company Metrics for Intel here>>>
Over the past month, Intel shares have recorded returns of -29.3% versus the Zacks S&P 500 composite's -1.2% change. Based on its Zacks Rank #2 (Buy), INTC will likely outperform the overall market in the upcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
Intel heads into Q3 earnings with rising estimates, strong AI initiatives and a 119.9% stock rally, but margin pressures and fierce competition pose risks.
The cloud software landscape offers two very different paths for investors: established profitability or high-octane growth. Choosing between Adobe (ADBE -1.67%) and Datadog (DDOG +3.81%) requires weighing mature cash flow against future scalability.
Adobe dominates digital content creation through its ubiquitous suite of design and document tools. Datadog provides critical monitoring and security infrastructure for companies running complex cloud applications. While both operate in the software-as-a-service market, their financial profiles and valuation multiples reflect distinct stages of business maturity and market expectations.
The case for AdobeAdobe provides digital solutions through its key integrated offerings, including Creative Cloud, Adobe Experience Platform, and Document Cloud. The company serves a diverse range of customers, including creative professionals, students, marketing professionals, and global enterprises. It has recently focused on comprehensive content supply chain solutions, such as Adobe GenStudio, that leverage both internal Firefly models and partner artificial intelligence systems to support enterprise-scale content production.
In FY 2025, revenue reached nearly $23.8 billion, representing approximately 10.5% growth over the prior year. This expansion helped the company generate net income of roughly $7.1 billion, resulting in a net margin of 30%. The consistent demand for its subscription-based creative and document tools provides a predictable revenue stream that helps support its long-term financial health and ongoing product development.
As of its November 2025 balance sheet, the debt-to-equity ratio was roughly 0.6x, which compares total debt to shareholder equity. The current ratio, measuring the ability to cover short-term obligations with short-term assets, was approximately 1.0x. During the same period, Adobe generated free cash flow of nearly $9.9 billion, representing the cash remaining after paying for operations and capital expenditures.
The case for DatadogDatadog provides unified, real-time observability and security for cloud-native and hybrid environments. It serves approximately 32,700 customers across over 160 countries, ranging from small businesses to large enterprises. The platform uses a land-and-expand model where users typically begin with infrastructure monitoring before adopting additional modules like Log Management or Bits AI, a strategy common among tech stocks.
In FY 2025, revenue reached nearly $3.4 billion, representing a significant 27.7% increase over the previous fiscal period. While the company is prioritizing growth and market share, it has also achieved a net income of roughly $107.7 million during the same time frame. This resulted in a net margin of close to 3.1%, as the business continues to reinvest heavily in research and sales to expand its platform capabilities.
As of its December 2025 balance sheet, Datadog maintained a healthy debt-to-equity ratio of approximately 0.4x and a current ratio of roughly 3.4x. Free cash flow for the period, calculated as operating cash flow minus capital expenditures, was close to $1.0 billion, indicating the business is already cash-flow positive. Note that stock-based compensation accounted for roughly 71.5% of operating cash flow, inflating reported cash generation, since SBC is a non-cash expense added back to cash flow.
Risk profile comparisonAdobe faces intense competition from large global software companies and specialized start-ups that are moving quickly in the generative artificial intelligence space. The company must also navigate complex legal and regulatory risks, including evolving frameworks such as the EU AI Act and litigation over its consumer subscription practices. Reliance on third-party cloud infrastructure also exposes it to potential service interruptions or security breaches. Microsoft (MSFT +0.75%) remains a significant competitor across several of its document and enterprise segments.
Datadog depends on continuous innovation to keep pace with diversified technology giants and native cloud providers that offer their own monitoring tools. The company must manage significant cybersecurity risks, as any unauthorized access to customer data could severely damage its reputation and lead to legal liability. Furthermore, execution risks related to the integration of acquisitions and potential revenue volatility as the market matures could impact its trajectory. It competes with major providers like Amazon (AMZN +0.85%), as well as specialized firms such as Dynatrace (DT +2.10%) and Elastic (ESTC +3.37%).
Valuation comparisonAdobe trades at a much lower Forward P/E, which compares its share price to future earnings estimates, than Datadog. Additionally, the P/S ratio, measuring market cap against sales over the past twelve months, shows a wide gap between the two companies.
MetricAdobeDatadogForward P/E11.1x101.7xP/S ratio4.1x23.3xValuation metrics include those sourced from Financial Modeling Prep (FMP) and may differ from those of other data providers.
When comparing Adobe and Datadog, investors should consider a few key factors. Let's have a look at them and see what that tells us about each stock.
To start, there's growth. In this category, Datadog has a clear lead. The company has averaged nearly 39% year-over-year revenue growth for the last five years. Meanwhile, Adobe's revenue growth has averaged around 11%.
Another factor to consider is each company's profitability. Here, Adobe shines. It has delivered consistent profits for years, with its operating margin averaging 35.6% over the last five years. Datadog, on the other hand, has an average five-year operating margin of -1%.
Last, there's valuation. Given Datadog's lack of consistent profitability, it's best to compare each stock's price-to-sales (P/S) ratio. In doing so, it becomes clear that Adobe stock is more affordable. Its P/S ratio stands at 4.1x, while Datadog's is around 23.3x.
In summary, these two stocks may appeal to different types of investors. Those focused strictly on growth may prefer Datadog, given its rapidly expanding revenue base. However, those investors who value profits and view price as an essential factor may select Adobe, given its significant lead in both profitability and valuation.
Wall Street fears AI will destroy Adobe, and that panic has sliced nearly 25% off the stock this year. But the company's own financials tell a completely different story about who actually profits when AI goes mainstream.
Adobe (NASDAQ:ADBE | ADBE Price Prediction) keeps slipping, and every new leg down broadens the gap between its share price and its fundamentals. The stock has fallen 24.62% year to date to $263.82. The loudest Reddit post on the name carries the title “ADOBE is cooked.” The crowd thinks AI will commoditize Adobe. I think Adobe is the company getting paid for AI, and I think the margins prove it.
AI Already Pays Adobe’s Bills
Adobe’s AI-first ending ARR topped $650 million, growing more than 150% year over year. Monthly active users passed 1 billion, up more than 20%. Creative freemium users crossed 100 million, up more than 70%, and Firefly ARR grew 40% quarter over quarter. Adobe keeps adding users, then routes them toward paid credits and premium levels. Total ARR reached $27.5 billion, up 11.2%.
Margins Expanding Faster Than Revenue
Third-quarter revenue rose 12.89% to $6.76B, and free cash flow grew 14.68% to $2.438B on just $85M of capex. Management targets a full-year non-GAAP operating margin of approximately 45%. In fiscal 2025, operating income grew 29.15% on 10.53% revenue growth. Non-GAAP EPS of $6.13 topped the $6.09 estimate for a fifth consecutive beat, and Adobe raised fiscal 2026 non-GAAP EPS guidance to $24.45 to $24.50.
Buybacks Do My Compounding
Adobe pays no dividend, so for a retirement portfolio the buyback serves as my income engine. The company retired roughly 8.1M, 8.5M and 9.5M shares across the first three quarters, with $24.55 billion still authorized. Every share I hold claims a bigger slice each quarter. At today’s price, Adobe trades near 11 times the fiscal 2026 consensus EPS of $24.476 and about 10 times the fiscal 2027 estimate.
How Adobe Stacks Up Against Microsoft and Autodesk
The obvious AI story belongs to Microsoft (NASDAQ:MSFT), and it spent $115.95 billion on capex in its latest fiscal year to fund it. Its fourth-quarter free cash flow fell 23.19%, and the stock trades at about 29 times earnings. Adobe’s light-capex model converts AI demand more directly into cash.
Autodesk (NASDAQ:ADSK) grows faster, with revenue up 16.05% last quarter. It guides to a non-GAAP operating margin of ~39%, though, below Adobe’s target. Adobe offers the wider margin.
Real Risk I Track Every Quarter
Adobe deliberately drives users into its freemium model before monetizing them, and RPO grew only 8%. Leadership also changes: Anil Chakravarthy becomes CEO on December 1, ending Shantanu Narayen’s 29 years at the helm. A conversion miss under a new chief would hurt. The risk looks contained. The internal successor knows the business, guidance rose about $50 million at the midpoint, and analysts posted 27 upward fiscal 2026 EPS revisions against 3 downward over 30 days.
Catalysts Investors Should Track Next
Adobe MAX arrives in November, and the Topaz Labs deal should close in Q4. The consensus calls for fiscal 2027 EPS of $27.5076. A business with 45% margins, a billion users and a shrinking share count keeps getting cheaper while it gets better, and investors should watch whether that trend holds.
Contact [email protected] for any questions or corrections.
Adobe remains attractively valued, trading at just 10x forward earnings despite uncertainty in long-term growth. AI disruption risk persists, but ADBE's core enterprise relevance and robust AI product adoption support ongoing demand. Management guides Q4 revenue to $6.8–$6.85 billion, with continued share repurchases and margin expansion as key upside catalysts.
Cisco Systems (CSCO - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Over the past month, shares of this seller of routers, switches, software and services have returned -0.2%, compared to the Zacks S&P 500 composite's -1.2% change. During this period, the Zacks Computer - Networking industry, which Cisco falls in, has lost 1.6%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Cisco is expected to post earnings of $1.33 per share for the current quarter, representing a year-over-year change of +33%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.8%.
The consensus earnings estimate of $5.11 for the current fiscal year indicates a year-over-year change of +18%. This estimate has changed +0.1% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $5.59 indicates a change of +9.4% from what Cisco is expected to report a year ago. Over the past month, the estimate has remained unchanged.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Cisco is rated Zacks Rank #2 (Buy).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Cisco, the consensus sales estimate of $18.09 billion for the current quarter points to a year-over-year change of +21.5%. The $73.03 billion and $77.87 billion estimates for the current and next fiscal years indicate changes of +15.3% and +6.6%, respectively.
Last Reported Results and Surprise HistoryCisco reported revenues of $17.25 billion in the last reported quarter, representing a year-over-year change of +17.6%. EPS of $1.22 for the same period compares with $0.99 a year ago.
Compared to the Zacks Consensus Estimate of $16.85 billion, the reported revenues represent a surprise of +2.36%. The EPS surprise was +4.27%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Cisco is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Cisco. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Cisco Systems (CSCO - Free Report) .
Cisco currently has an average brokerage recommendation (ABR) of 1.80, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 28 brokerage firms. An ABR of 1.80 approximates between Strong Buy and Buy.
Of the 28 recommendations that derive the current ABR, 16 are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 57.1% and 3.6% of all recommendations.
Brokerage Recommendation Trends for CSCO
Check price target & stock forecast for Cisco here>>>
While the ABR calls for buying Cisco, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.
Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.
On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Is CSCO Worth Investing In?Looking at the earnings estimate revisions for Cisco, the Zacks Consensus Estimate for the current year has increased 0% over the past month to $5.11.
Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for Cisco. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for Cisco may serve as a useful guide for investors.
IBM (IBM - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Over the past month, shares of this technology and consulting company have returned +12.4%, compared to the Zacks S&P 500 composite's -1.2% change. During this period, the Zacks Computer - Integrated Systems industry, which IBM falls in, has lost 18.5%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
IBM is expected to post earnings of $4.63 per share for the current quarter, representing a year-over-year change of +2.4%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.7%.
The consensus earnings estimate of $12.41 for the current fiscal year indicates a year-over-year change of +7.1%. This estimate has changed +0.7% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $13.24 indicates a change of +6.7% from what IBM is expected to report a year ago. Over the past month, the estimate has changed +0.1%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for IBM.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For IBM, the consensus sales estimate for the current quarter of $20.38 billion indicates a year-over-year change of +3.5%. For the current and next fiscal years, $70.51 billion and $73.31 billion estimates indicate +4.4% and +4% changes, respectively.
Last Reported Results and Surprise HistoryIBM reported revenues of $17.1 billion in the last reported quarter, representing a year-over-year change of +4.7%. EPS of $2.95 for the same period compares with $2.65 a year ago.
Compared to the Zacks Consensus Estimate of $16.87 billion, the reported revenues represent a surprise of +1.37%. The EPS surprise was +2.43%.
Over the last four quarters, IBM surpassed consensus EPS estimates three times. The company topped consensus revenue estimates three times over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
IBM is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about IBM. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
