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Tuesday, September 26, 2017
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including Facebook (NASDAQ:FB) (FB), FedEx (FDX) and Intel (INTC). 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 >>>
Buy-rated Facebook’s shares have outperformed the S&P 500 index over the last year, gaining +26.6% vs. +17.6%. The Zacks analyst likes Facebook’s mobile and live video efforts which continue to pay off big time. Instagram has also emerged as an important revenue stream.
Apart from mobile and video, the monetization opportunities of the company’s other subsidiaries – Messenger, WhatsApp and Oculus – and a huge user base/higher engagement levels are expected to drive growth going ahead.
Facebook is also dabbling in AR/VR and AI technologies, which bodes well for long-term growth. However, rising costs and stiffening competition for ad dollars is concerning. Amid all this and tremendous investor pressure, Facebook has scrapped plans to create Class C shares that would have helped CEO Mark Zuckerberg retain his control over the company.
(You can read the full research report on Facebook here >>>).
Shares of FedEx have underperformed the Zacks Air Freight And Cargo industry it belongs to as well as rival United Parcel Service (NYSE:UPS) in the last three months. While the stock has gained 2.5%, the industry has advanced 6.7%. Shares of rival United Parcel Service (UPS) have gained 8.6% in the same period.
Adding to its woes, FedEx performed disappointingly in the first quarter of fiscal 2018, reporting lower-than-expected revenues and earnings per share. Results were hurt by a cyberattack in June. Harvey and costs related to the integration process of TNT Express also dented results.
However, the Zacks analyst is also impressed by the company's decision to reward shareholders through dividend payments and share buybacks. The growth in e-commerce is also a positive.
(You can read the full research report on FedEx here >>>).
Intel’s shares have gained +4.7% year to date, underperforming the broader Technology sector as well as the red-hot semiconductors space, which are up +18.6% and +23.5%, respectively. But Intel’s growing focus on the data-centric part of the business is positive.
The launch of Xeon Scalable, Core 8 chips, Myriad X and next-generation desktop processors are key catalysts. The new desktop processors are expected to help Intel's gaming endeavors amid stiff competition from AMD and NVIDIA (NASDAQ:NVDA). Moreover, the Core 8 launch is expected to boost PC market share.
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. However, declining PC-shipments remain a concern.
(You can read the full research report on Intel here >>>).
Other noteworthy reports we are featuring today include TE Connectivity (TEL), State Street (STT) and Viacom (VIAB).
New Report: An Investor’s Guide to Cybersecurity
Cyberattacks have become more frequent and destructive than ever. In fact, they’re expected to cause $6 trillion per year in damage by 2020.
The cybersecurity industry is expanding quickly in response to these threats. In fact, a projected $170 billion per year will be spent to protect consumer and corporate assets. Zacks has just released Cybersecurity: An Investor’s Guide to Locking Down Profits which reveals 4 promising investment candidates.
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>>>
Viacom's (VIAB) Turnaround Efforts Impress, High Debt a Woe
The Zacks analyst is impressed by the company's efforts to revive its fortunes.
Xerox's (NYSE:XRX) Restructuring Efforts Aim to Boost Sales
Per the Zacks analyst, Xerox is reprioritizing investments and restructuring efforts to improve revenue and margins as it grapples with decreased demand for paper-related systems and products.
TE Connectivity (TEL) Hurt by Communications Business
Per the Zacks analyst, lacklustre performance of TE Connectivity's communications business due to poor sales in Appliances and Data & Devices business lines is weighing on the company's bottom line.
Red Hat (RHT) Banks on Strong Deal Win, Recurring Revenues
According to the Zacks analyst, Red Hat is benefiting from strong deal win, improving recurring revenues and cross-selling of cloud-based technology.
Improving Margin Aids State Street (STT), Higher Costs A Woe
Per the Zacks analyst, easing margin pressure with the rise in rates is likely to continue to aid State Street's top-line.
Debt Cuts, Action 2020 Initiatives Aid ArcelorMittal (MT)
The Zacks analyst is impressed with the company's actions to cut debt as well as reduce costs and expand high value products line under its Action 2020 initiative, which should boost its performance.
Unum (UNM) Grows on Higher Sales, Increased Premiums
Per the Zacks analyst, Unum's premiums will continue to increase, driven by solid persistency levels in core business lines and sturdy volume of sales, along with solid benefits experience.
Capacity Overexpansion & High Costs Hurt JetBlue (JBLU)
The Zacks analyst is concerned about capacity expansion outpacing traffic growth at JetBlue. High labor and fuel costs are also likely to limit bottom-line growth.
Waning Print Media Trends Likely to Hurt Meredith (MDP)
Per the Zacks analyst, soft print media trends due to shift from traditional advertising might hurt Meredith's performance. Shift to online is likely to put enormous pressure on its magazine portfolio.
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