Monday June 5 2017
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 17 major stocks, including ExxonMobil (XOM), JPMorgan (NYSE:JPM) (JPM), Intel (INTC) and MasterCard (MA).These research reports have been hand-picked from the roughly 70 reports published by our analyst team today. You can see all of today’s research reports here >>>
ExxonMobil’s shares tracked the S&P 500 index through year-end 2016, but have lagged the broader index as well as the peer super majors group in the year-to-date period, likely reflecting the company's perceived defensiveness that disadvantages it relative to its 'oilier' peers. Exxon's resilient integrated business model has long been the industry gold standard, which makes it an attractive and relatively low-risk Energy sector option for many investors. A fortress balance sheet, an attractive and totally safe dividend and a history of returning excess cash to shareholders are some of the other positives in the Exxon story.
The company has been investing heavily in its chemical and refining businesses, which will likely help it counter downturns in upstream businesses owing to volatile commodity prices. However, the integrated player’s oil and gas output is well below the production levels 10 years ago. The Zacks analyst discusses the pros and cons of investing in Exxon shares in the updated research report issued today. (You can read the full research report on ExxonMobil here >>>).
Shares of JPMorgan have lost -1.0% over the past six months vs. a -0.8% decline for the Major Banks industry. The Zacks analyst likes the company’s steady capital deployment activities (dividend hike and share buyback), which reflects its strong balance sheet position.
The company remains well positioned to benefit from the improved rate scenario and rising loan demand. Synergies from retail banking performance and cost-containment efforts will help improving its profitability, going forward. However, a persistent fee income growth challenge remains a major headwind. Also, litigation hassles remain a concern. (You can read the full research report on JPMorgan here >>>).
Intel’s shares have gained only +4.9% since election results were announced on Nov 8, lagging the broader Tech sector (up +18.1%) as well as the red-hot semiconductors space (up +28.4%). Top-PC makers like HP, Lenovo, and Asus are set to launch PCs based on Qualcomm’s ARM-based Snapdragon processor, which intensifies competition for Intel. Additionally, increasing competition from AMD is also a headwind. Moreover, PC shipments are expected to remain sluggish due to increasing DRAM and NAND prices, which will hurt Intel’s top-line growth going ahead in 2017.
Nevertheless, the Zacks analyst thinks IBM’s upcoming launch of Skylake will drive data center results in the second half. Moreover, the company revised its 2017 revenue and EPS outlook upward based on improving average selling price (ASP). Further, anticipated improvement in cost structure and lower spending, primarily due to improving operational efficiency will aid in expansion of margins going forward. Additionally, aggressive share buyback will boost the bottom line in 2017. (You can read the full research report on Intel here >>>).
Shares of MasterCard have outperformed the Zacks Financial Services Transaction sector over the last one year (up +29.8% vs. +18.4%) and is also ahead of rival Visa (up +19.5%) The company remains well positioned for growth on the back of its solid market position, ongoing expansion and digital initiatives and significant opportunities from the secular shift towards electronic payments.
The acquisition of VocaLink and NuData Security complement the company’s efforts to participate in new payment flows and enhance its safety and security offerings. However, escalating costs, a challenging forex environment and legal issues remain concerns. (You can read the full research report on MasterCard here >>>).
Other noteworthy reports we are featuring today include Broadcom (NASDAQ:AVGO) (AVGO), Starbucks (SBUX) and CVS Health (NYSE:CVS) (CVS).
Free Access: All Zacks Research Reports
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Mark Vickery
Senior Editor
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today's Must Read
Featured Reports
CVS Health (CVS) Rides on Strong PBM Growth amid Retail Woes
The Zacks analyst is positive on CVS' solid 2017 PBM selling season and is optimistic about 2018 selling season too which is already off to a strong start.
Hewlett Packard's (HPE) High Margin Business to Fuel Growth
The covering analyst thinks Hewlett Packard's restructuring initiatives, which include focusing on high margin businesses such as IoT, server, storage and Big Data will drive growth in the long run.
Broadcom (AVGO) Gains from Top-line Growth, Acquisitions
The Zacks analyst thinks Broadcom benefits from strong top-line growth driven by robust demand for broadband access and set-top box products.
Rockwell Automation (NYSE:ROK) Gains on End-Markets Growth
The covering analyst thinks heavy industries will be a growth driver for Rockwell Automation in this year apart from continued growth in the consumer and transportation verticals.
American Tower's (AMT) Tower Buyouts, Leases Driving Revenues
The Zacks analyst believes that American Tower's tower buyouts in emerging markets and long-term tower leases with major wireless carriers have driven its top line and lend it a competitive edge over
Starbucks' (SBUX) Loyalty Programs, Digital Offerings Remain Strong
Starbucks's successful innovations, best-in-class loyalty program and digital offerings remain strong amid tepid sales growth, per the covering analyst.
Buyouts, Store Openings Boosting Lowe's (LOW) Top-Line
The Zacks analyst thinks strategic efforts such as buyouts, merchandising initiatives and store openings bode well for Lowe's.
New Upgrades
Eaton (ETN) Benefits from Organic Growth & Restructuring
The Zacks analyst believes Eaton's restructuring efforts will boost its margin. Eaton's wide market reach will help to multiply its gain as end market conditions are showing signs of improvement.
United Tech (UTX) Business Mix Offers Steady Earnings Growth
Per the covering analyst, the business mix and diversification allows United Technologies (NYSE:UTX) to remain profitable even during tough economic times, delivering consistent earnings and dividend growth.
Lincoln National (NYSE:LNC) Grows on Product & Business Mix Change
According to the Zacks analyst, the company's disciplined expense & capital management, changes to product & business mix, divestitures have helped the company to perform strongly.
New Downgrades
Decline of TEGNA's (TGNA) Digital Business a Major Concern
The Zacks analyst believes that TEGNA's consistent losses in digital business might hurt its long-term operations while soft advertising market is a near-term headwind for the company.
Lead Price Volatility Weighs Down on EnerSys' (ENS) Profits
Per the covering analyst, rise in commodity prices, particularly lead, will continue to erode EnerSys' profitability, as the company is facing delays in passing off the higher cost to its consumers.
Reinsurance Group's (RGA) Weak Australian Business Remains Drag
The Zacks analyst thinks Reinsurance Group's performance has been weighed on by weak Australian business. Also, currency exchange volatility and evolving capital requirements remain headwinds.
Exxon Mobil Corporation (NYSE:XOM
Starbucks Corporation (NASDAQ:SBUX
Mastercard Incorporated (NYSE:MA
J P Morgan Chase & Co (JPM): Free Stock Analysis Report
Intel Corporation (NASDAQ:INTC
CVS Health Corporation (CVS): Free Stock Analysis Report
Broadcom Limited (AVGO): Free Stock Analysis Report
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Zacks Investment Research