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The Zacks Analyst Blog Highlights: McDonald's, Enterprise Products Partners, Charles Schwab, BB&T And Humana

Published 04/11/2019, 10:32 PM
Updated 07/09/2023, 06:31 AM
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For Immediate Release

Chicago, IL – April 12, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: McDonald’s (NYSE:MCD) , Enterprise Products Partners (NYSE:EPD) , Charles Schwab (NYSE:SCHW) , BB&T Corp (NYSE:BBT) and Humana (NYSE:HUM) .

Here are highlights from Thursday’s Analyst Blog:

Top Research Reports for McDonald’s, Enterprise Products & Charles Schwab

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including McDonald’s, Enterprise Products Partners and Charles Schwab. These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

McDonald's shares have gained +17.1% in the past year, underperforming the Zacks Restaurants industry which has gained +19.4% over the same period. The Zacks analyst thinks high labor costs and currency headwinds remain major concerns.

Moreover, revenues have been under pressure for quite some time due to strategic refranchising initiatives. Even its heightened focus on refranchising might cut the capital requirements and facilitate EPS growth. McDonald’s margins have been under pressure from worldwide wage increases.

However, McDonald’s impressive earnings surprise history, various sales and digital initiatives, as well as positive comparable sales, bode well. In fact, global comps at McDonald’s have been positive over the trailing 14 quarters.

Furthermore, increased focus on delivery and accelerated deployment of Experience of the Future restaurants in the United States should boost its performance. These apart, efforts to drive growth in International Lead & High Growth Markets bode well.

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Shares of Buy-ranked Enterprise Products have gained +6.9% over the past three months, outperforming the Zacks Oil Production Pipeline MLP industry's increase of +5.4%. The Zacks analyst likes Enterprise Products’ extensive network of pipelines that is spread across nearly 50,000 miles.

Importantly, the pipeline network, which is connected to every major U.S. shale play, provides services to producers and users of commodities by transporting gas, liquids, and refined products. At present, Enterprise’s $5.1-billion pipeline of fee-oriented midstream projects positions it to enjoy above-average growth in distributable cash flow over the next two years, in turn expanding its distribution coverage ratio.

Most importantly, its ethane export facilities in the Gulf Coast, which link domestic producers to the overseas market, should drive further growth as the use of ethane is rapidly increasing to manufacture plastic instead of naphtha. As such, the partnership holds tremendous upside potential.

Schwabshares have outperformed the Zacks Investment Brokers industry over the past year, declining -14.5% vs. -19.4%. The Zacks analyst likes Schwab’s impressive earnings surprise history, having surpassed expectations in each of the trailing four quarters. Estimates have been stable lately ahead of the company's first quarter 2019 earnings release.

The company remains well positioned to gain from the higher interest rates and its initiatives to strengthen trading income. Also, the company’s efforts to improve operating efficiency will go a long way to support profitability. Its efficient capital deployment activities reflect a strong balance sheet position.

However, continuously rising operating expenses are likely to hurt bottom-line growth to an extent. Moreover, the company’s significant dependence on fee-based revenues remains a major concern as it might hamper financials.

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Other noteworthy reports we are featuring today include BB&T Corp and Humana.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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BB&T Corporation (BBT): Free Stock Analysis Report

Enterprise Products Partners L.P. (EPD): Free Stock Analysis Report

The Charles Schwab Corporation (SCHW): Free Stock Analysis Report

Humana Inc. (HUM): Free Stock Analysis Report

McDonald's Corporation (MCD): Free Stock Analysis Report

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