Tuesday, December 19, 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 Wells Fargo (WFC), AT&T (T) and Cisco (CSCO). 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 >>>
Wells Fargo’s shares have underperformed the Zacks Major Banks industry year to date, increasing +10.6% vs. a gain of +19.6%. However, the company has an impressive earnings surprise history. The company surpassed the Zacks Consensus Estimate for earnings in three of the trailing four quarters. Wells Fargo plans $4 billion of cost cuts by 2019.
Further, rising rates are easing margin pressure to an extent. Notably, following the recent Federal Reserve interest rate hike by 25 bps, Wells Fargo raised its prime lending rate from 4.25% to 4.50%. While the current crisis related to the revelation of illegally opening millions of illegal accounts last year at the company will take some time to alleviate, the Zacks analyst thinks consistent growth in loans and deposits and expansions will likely support its growth profile.
(You can read the full research report on Wells Fargo here >>>).
Shares of AT&T have increased +0.1% over the past three months, underperforming the Zacks Wireless National industry's gain of +0.9%. However, the company recently announced a 2% dividend hike, backed by strong cash flows and business outlook. AT&T’s 5G network trials in different cities are in sync with its plan to offer 5G services from 2018.
The company’s streaming service DIRECTV NOW reported more than 1 million subscribers, despite cord-cutting. Meanwhile, AT&T-Verizon have teamed up with Tillman to build cell towers in the United States. AT&T’s NetBond is gearing up to offer multiple cloud connections. Also, AT&T is exploring a strategic option to sell a major part of its Latin American pay-TV operations.
However, AT&T-Time Warner had to extend their proposed deal closure deadline to Apr 22, 2018 to clear-off regulatory issues. AT&T continues to struggle in the competitive U.S. wireless market. Loss in access lines, operating expenses and union issues are other headwinds.
(You can read the full research report on AT&T here >>>).
Cisco’s shares have outperformed the Zacks Networking industry on a year to date basis, gaining +27.4% vs. +26.1%. Recently, it unveiled the Cisco Security Connector, which is now available in the App Store on iOS devices. The Zacks analyst thinks the company’s expanding footprint in the rapidly growing security market presents a significant growth opportunity.
Additionally, partnerships with Telenor, Apple (NASDAQ:AAPL), IBM and Microsoft (NASDAQ:MSFT) are positive in our view. Additionally, the company’s Application Centric Infrastructure (ACI) solution is currently used by more than 4K customers. The ACI solution was recently enhanced with new features that have aided growth.
Further, the planned acquisition of Broadsoft will boost company's recurring revenue base. Moreover, the company's collaboration with Google (NASDAQ:GOOGL) Cloud to offer hybrid cloud solution is a key catalyst. However, intense competition from peers and challenges in the emerging markets remains a headwind.
(You can read the full research report on Cisco here >>>).
Other noteworthy reports we are featuring today include Oracle (ORCL), IBM (IBM) and Abbott (ABT).
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
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
BioMarin's (BMRN) Key Drugs Enjoy Strong Patient Demand
The Zacks analyst says that BioMarin's key drugs, Vimizim and Kuvan, enjoy strong patient demand trends. BioMarin has an impressive rare-disease pipeline with pegvaliase approval expected in 2018.
Software Sales to Aid BlackBerry's (BB) Q3 Amid Debt Woes
The Zacks analyst is impressed by the decision to focus exclusively on software business. Robust software sales are likely aid its Q3 results. The company's high debt levels, however, raise concerns.
NCI Building (NCS) Grows on Investments Amid Rising Costs
The Zacks analyst thinks that NCI Building's focus on investments in automation and process innovation will improve margins. However additional charges due to restructuring remain a concern.
Zumiez's (ZUMZ) Robust Comps Trend to Aid Holiday Sales
Per the Zacks analyst, Zumiez's favorable comps trend continued in November, which reflected a solid start to the holiday season. This led it to issue a robust outlook for the fourth quarter.
Progressive's (PGR) Premium Growth Impresses, Cat Loss Ails
Per the Zacks analyst, competitive market rates and a compelling multi-product portfolio will continue to fuel premium growth for Progressive.
CBRE Group (NYSE:CBG) to Ride High on Strategic Acquisitions
Per the Zacks analyst, CBRE Group will ride high on strategic buyouts that expand and reinforce service offerings and enhance geographic reach.
GEAR Up Goals Aid Comerica (NYSE:CMA), Concentration Risk a Woe
Per the Zacks analyst, Comerica's Gear Up initiatives are likely to drive operational efficiency.
New Upgrades
Rising Revenues Bolster Northern Trust's (NASDAQ:NTRS) Financials
Per Zacks analyst, Northern Trust's rising revenues on the back of rise in interest rates and focus on expanding client base reflect strong organic growth. Also, capital position remains a tailwind.
Rising Rates and Loan Growth to Aid Hancock Holding (HBHC)
Per the Zacks analyst, Hancock Holding will likely further benefit from its strategic initiatives, improvement in rate scenario and steady loan growth. A solid capital position is another positive.
Improving Trading Activity Benefits E*TRADE (ETFC)
The Zacks analyst believes E*TRADE is poised to grow through improving trading activities as DARTs continue to rise. Moreover, restructuring moves and easing margin pressure is favorable.
New Downgrades
Abbott's (ABT) Nutrition Business Faces Challenges in China
Per the Zacks analyst, Abbott is suffering from sluggish nutrition business in China which may continue dampening overall topline show. Challenging business environment in Latin America is a concern.
Higher Investments, Soft Cloud Outlook Hurt Oracle (ORCL)
Per the Zacks analyst, higher investments on PaaS and IaaS will keep Oracle's margins under pressure. Further, a tepid cloud view and intensifying competition from peers remains a headwind.
Ongoing Business Transition to Cloud & Seasonality Hurt IBM
Per the Zacks analyst, IBM is having a tough time, given the ongoing time-consuming business model transition to cloud. Also, stiff competition in most of the markets is a major concern.
Wells Fargo & Company (NYSE:WFC): Free Stock Analysis Report
AT&T Inc. (NYSE:T): Free Stock Analysis Report
Oracle Corporation (NYSE:ORCL): Free Stock Analysis Report
International Business Machines Corporation (NYSE:IBM): Free Stock Analysis Report
Cisco Systems, Inc. (NASDAQ:CSCO): Free Stock Analysis Report
Abbott Laboratories (NYSE:ABT): Free Stock Analysis Report
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