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Friday July 7 2017
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 Procter & Gamble (PG), Verizon (VZ), and Citigroup (C). 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 >>>
Procter & Gamble’s shares have outperformed the Zacks Consumer Staples sector in the past year (+1.9% vs. -1.4%). However, P&G shares have underperformed the S&P 500 index in the year-to-date period (up +3.9% vs. +7.8%). The company has been struggling to boost market growth for the last few quarters. Also, significant negative forex impact has been hurting sales. But the Zacks analyst likes the fact that P&G is speeding up innovations and investments to counter softening industry growth. Its productivity improvements and aggressive cost-saving efforts are also consistently helping to boost profit levels.
(You can read the full research report on Procter & Gamble here >>>).
Shares of Verizon shares have been laggards over the past year -- the stock is down -22.1% over the past 12 months vs. AT&T (NYSE:T)'s -12.7% decline and the +13% gain for the S&P 500 index. Verizon's underperformance reflects the market's concerns about the company's muddled strategy in the digital media domain and rising competitive pressures in its core U.S. wireless business.
The Yahoo (NASDAQ:AABA) purchase, as well as other previously acquired digital properties like AOL, Huffington Post will boost its digital media suite. The long-term expectation is that these assets will give it a sizable enough platform to capture digital marketing dollars. The jury is still out on the long-term viability of these efforts, but the company is also trying to be a player in the online TV streaming space and defend its leadership position in the wireless market through 5G wireless network trials.
The company's dividend appears safe (currently yields more than 5%), but the inherent capital intensity of its core business and the need for purchases on the digital side ends up eating up more than it generates in its operations. In the updated research report issued today, the Zacks analyst discusses the pros and cons of investing in Verizon shares at present.
(You can read the full research report on Verizon here >>>).
Citigroup’s shares have outperformed the Zacks categorized Major Regional Banks industry over the last six months, gaining +13.1% vs +6.8%. The Zacks analyst likes the company’s restructuring and streamlining efforts, strategic investments in core business and expense management. The recent Fed approval of the company's 2017 capital plan is also encouraging. Moreover, the passage of the Financial Choice Act will act as a tailwind for the company in coming quarters. However, several issues including litigation burden provide cause for concern. Margins remain under pressure despite rising rates.
(You can read the full research report on Citigroup here >>>).
Other noteworthy reports we are featuring today include Albemarle (ALB), Kimberly-Clark (KMB) and Becton, Dickinson (BDX).
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple (NASDAQ:AAPL)'s 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade, which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
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>>>
Seattle Genetics (SGEN) Expands Adcetris Lablel to Face Competition
Per the Zacks analyst, lymphoma drug Adcetris has done well since launch. Label expansion studies on the drug are ongoing. However, competition is increasing in the lymphoma market.
ReneSola's (SOL) Customer Growth Impress, Panel Prices Hurt
Per the covering analyst, ReneSola is witnessing steady growth in its customer count that will help to expand its business.
High Rig Demand Aids Nabors (NBR), Labor Costs A Woe
While the growing drilling demand and rig counts in the Permian and Bakken Shale plays in the Lower 48 region drive Nabors, the Zacks analyst is worried about the rising labor and reactivation costs.
Growing Product Line, Global Reach Aid Harley-Davidson (HOG)
Per the covering analyst, the company will gain from its sustained efforts to amplify its product portfolio.
Cintas (NASDAQ:CTAS) Buoyed by G&K Services, Demand Frailty Persists
Per the Zacks analyst, G&K Services' extended product portfolio and additional processing capacity will fuel Cintas' growth momentum, although raw material volatility remain potential headwinds.
Hewlett Packard (HPE) Prospects Hurt by Lower Server Sales
Though the restructuring at Hewlett Packard is a positive, lower demand for servers at enterprise and SMB segments due to the presence of virtualization and cloud options bothers the Zacks analyst.
Becton (BDX) to Benefit from Impending C.R. Bard Acquisition
The Zacks analyst is bullish on the announced acquisition of C.R. Bard on expected synergies from complementary businesses and geographical expansion.
Lease Business Growth, Strong Customer Base Buoy Ryder (R)
The Zacks analyst is impressed by the growth in Ryder's lease fleet. The company's strong customer base is also a positive. Efforts to reward shareholders also raise optimism in the stock.
Lithium Expansion, Rockwood Buyout to Drive Albemarle (ALB)
The Zacks analyst thinks that Albemarle is well placed to gain from expansion actions in its lithium unit, strong growth in the battery-grade lithium market and synergies of Rockwood Holdings buyout.
AXIS Capital (AXS) Ramps Up Lloyds (LON:LLOY) Presence With Novae Buy
Per the Zacks analyst, AXIS Capital is eyeing opportunities at Lloyds platform to accelerate growth rate. Addition of Novae Group plc places the acquirer into the top ten insurers' bracket at Lloyd.
Kimberly-Clark (KMB) to Hurt from Pressurized Diaper Segment
Per the Zacks analyst, Kimberly-Clark has been witnessing increased competition in its diapers segment. Slower organic sales growth in the emerging markets due to lower volumes also remain its woes.
Decelerating Comps & Soft View May Hurt Foot Locker (NYSE:FL)
Per the Zacks analyst, Foot Locker's total sales and comps grew marginally in first-quarter fiscal 2017, a sharp contrast to fiscal 2016 performance. Further, soft second-quarter view raises concern.
Teradyne (TER) Hit by Sluggish Hard-disk Drive Business
The Zacks analyst believes that Teradyne's hard-disk drive (HDD) business will remain sluggish due to the weakness in the computing market, which is the primary consumer of HDDs.
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