Friday, September 1, 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 Bank of America (BAC), American Express (AXP) and Pepsi (PEP). 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 >>>
Bank of America shares have outperformed the Zacks Major Regional Banks industry over the last one year, gaining +50.9% vs. +29.6%. This price performance is backed by impressive earnings surprise history. The company has surpassed expectations for earnings in all the trailing four quarters.
Further, rising interest rates, increase in loan and deposit balances, efforts to streamline and simplify operations, and potential lesser regulations are expected to continue supporting the company's profitability going forward. However, fee income growth concerns remain a key concern. Specifically, fall in mortgage banking income owing to lower volumes and decline in refinancing along with uncertainty related to performance of capital markets are major concerns for the Zacks analyst.
(You can read the full research report on Bank of America here >>>).
Shares of Buy rated Pepsi have modestly lagged the broader market over the last year (+10.1% for PEP vs. +15.7% for the S&P 500), but they outperformed the Zacks Soft Drinks Beverages industry as well as Coke (KO was +8.3%). Despite global macro challenges, Pepsi has been doing well since 2014 on the back of significant innovation, ongoing revenue management strategies, improved productivity and better market execution.
The company has been facing challenges amid the shift in consumers’ preferences. Given this backdrop, it is gradually reshuffling its portfolio toward healthier “Everyday Nutrition Products” in order to adapt to the changing customer needs of healthier lifestyles. However, apart from sluggish CSD volumes, rising volatility in global markets and increasing currency headwinds may limit top line growth.
(You can read the full research report on Pepsi here >>>).
Buy rated American Express shares have gained +34.9% over the last year, higher than the broader finance sector’s gain of +19.1%. The Zacks analyst likes its solid market position, strength in card business and significant opportunities from the secular shift toward electronic payments. Strategic initiatives focusing on the platinum card portfolio and OptBlue program will drive business volume.
Cost reduction and return of significant capital to shareholders through dividend and share buyback are other positives. The stock has witnessed an upward revision in earnings estimate over the past 60 days.
(You can read the full research report on American Express here >>>).
Other noteworthy reports we are featuring today include Incyte (INCY), Eaton (ETN) and Autodesk (NASDAQ:ADSK) (ADSK).
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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
Incyte's (INCY) Jakafi To Drive Growth As Demand Increases
Per the Zacks analyst, growth in demand for Jakafi should boost Incyte's sales. Additionally, news that NDA for baricitnib has been resubmitted faster than previously expected is another positive.
Orbital ATK (OA) Shines on New Contracts and Rising Backlog
Orbital ATK's rising backlog of nearly $15.4 billion (up 4% year over year) and new orders are boosting the performance of the company
Eaton (ETN) Gains from End Market Improvement, Restructuring
The Zacks analyst believes Eaton's restructuring initiatives and the ongoing improvement in end market conditions are going to boost its performance.
Autodesk's (ADSK) Subscription Model Delivers, Guides Up '18
Per the Zacks analyst, the improvement in average revenue per subscriptions (ARPS) reflects growing subscriber base.
POSCO (PKX) to Benefit from Diversified Business Structure
POSCO's focus on steel business will prove advantageous in the quarters ahead. Energy, materials, infrastructure and trading businesses will add to growth.
Church & Dwight's (CHD) Buyout Gains to Offset Higher Costs
Church & Dwight is witnessing margin pressure due to rising costs and competition, per Zacks analyst. The company is focusing on acquisitions and productivity initiatives to offset these headwinds.
Owens-Illinois (NYSE:OI) Gains on Efforts to Cut Structural Costs
Per the Zacks analyst, focus on reducing structural costs, simplifying the organization, expanding customer relationships & strategic initiatives will drive growth.
New Upgrades
Royal Caribbean (RCL) Rides on Bookings, Technological Tools
Solid booking trends will boost sales at Royal Caribbean in 2017, per the Zacks analyst. Digital tools for marketing, product development and enhancing guest experience should improve occupancy.
Improving Trading Activity Benefits TD Ameritrade (AMTD)
The Zacks analyst believes TD Ameritrade is poised to grow through improving trading activities as DARTs continue to rise. Moreover, increase in revenue and easing margin pressure is favorable.
Investor-friendly Approach Aids Kansas City Southern (NYSE:KSU)
The Zacks analyst likes the company's efforts to reward shareholders through dividends and buybacks. Improvement in coal volumes is aiding the top line.
New Downgrades
China Weakness, Higher R&D Expense Hurts Qorvo (QRVO)
According to the Zacks analyst, weak near-term demand in China and increasing higher research & development expenses related to custom product development for largest customers hurts Qorvo.
High Fuel Costs, Soft International Traffic Hurt GOL (GOL)
The Zacks analyst is concerned about the high fuel costs, which is limiting bottom-line growth at GOL Linhas. Lackluster international traffic is hurting its top line.
Elevated Restructuring Costs May Dent Itron's (ITRI) Margins
Per the Zacks analyst, Itron's margins in the near term will bear the brunt of higher costs in product development and general & administrative expenses while it executes its restructuring plans.
Pepsico, Inc. (NYSE:PEP
Incyte Corporation (INCY): Free Stock Analysis Report
Eaton Corporation, PLC (ETN): Free Stock Analysis Report
Bank of America Corporation (NYSE:
American Express Company (NYSE:AXP
Autodesk, Inc. (ADSK): Free Stock Analysis Report
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Zacks Investment Research