Wednesday, January 29, 2020
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 Fomento Economico Mexicano (FMX), Southern Company (NYSE:SO) (SO) and DISH Network (DISH). 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 >>>
Fomento Economico’s shares have underperformed the Zacks Soft Drinks Beverages industry over the past year (+2.6% vs. +16.3%). The Zacks analyst believes that the company’s growth via acquisition strategy is reaping benefits. Its sound fundamentals and growth efforts position it for growth ahead.
The recent acquisition of minority stake in Jetro Restaurant Depot, AGV and 40% stake in Grupo Socofar, as well as joint venture with Raízen reveal its commitment to invest in the expansion of core businesses. Furthermore, its third-quarter 2019 results reflect significant strength across all businesses.
However, the company witnessed soft operating results across some divisions in the past few quarters. Operating margins at FEMSA Comercio’s Health and Proximity Divisions in third-quarter 2019 were hurt by operating expense deleverage in these units. Tariff-related and higher input costs are headwinds hurting its bottling unit.
(You can read the full research report on Fomento Economico here >>>)
Shares of Southern Company have gained +26.7% in the past six months against the Zacks Electric Power industry's rise of +14.8%. The Zacks analyst believes that leveraging the demographics of its operating territories, as in healthy population and job growth, the firm has gradually increased its customer base.
With good rate base growth and constructive regulation, Southern Company is expected to generate steady earnings and dividend growth in the coming years. However, elevated leverage of the firm, along with continued timing and cost overrun issues over its Vogtle project, are major overhangs.
While the electric utility holding company’s debt-to-capital ratio of 57% restricts financial flexibility, its $25-billion Vogtle nuclear plant has already exceeded budget and is years behind schedule. As such, Southern Company warrants a cautious stance from the investors.
(You can read the full research report on Southern Company here >>>)
DISH’s shares have gained +6.9% over the past three months against the Zacks Cable Television industry's rise of +1.7%. The Zacks analyst believes that DISH’s efforts to diversify its business from being a pure-play satellite-TV operator to an Internet TV operator are noteworthy.
The Sling TV subscriber base is also expanding. The company recently raised Sling TV prices and also introduced channels. Further, its focus on acquiring and retaining subscribers, who will be profitable over the long term, is expected to drive growth.
Additionally, DISH is set to enter the U.S. wireless market as the fourth, nationwide, facilities-based network competitor by acquiring Sprint’s prepaid businesses and customers, and 14 MHz of nationwide 800 MHz spectrum. This is expected to drive DISH’s top line over the long haul.
(You can read the full research report on DISH here >>>)
Other noteworthy reports we are featuring today include NextEra Energy (NYSE:NEE) (NEE), Duke Energy (DUK) and Charles Schwab (SCHW).
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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
Investment in Renewable and Infrastructure Aid NextEra (NEE)
Per the Zacks analyst, NextEra's planned investment in the range of $50 to $55B to increase clean electricity generation portfolio and strengthen its infrastructure will boost its profitability.
Investment Plan Aids Duke Energy (DUK), Commodity Prices hurt
Per the Zacks Analyst, the company's robust five-year capital plan will drive earnings base growth.
Strategic Acquisitions Aid Schwab (SCHW) Amid Lower Rates
Per the Zacks analyst, Schwab's inorganic growth initiatives and other revenue diversification efforts will aid profits. Yet, pressure on margins due to relatively lower rates will hurt the top line.
Solid Radio Systems Adoption Benefits Analog Devices (NASDAQ:ADI)
Per the Zacks analyst, Analog Devices is benefiting from growing adoption of advanced radio systems in 5G infrastructure which in turn is aiding growth in its communications business.
D.R. Horton's (DHI) Backlog to Spur Growth Amid Rising Costs
D.R. Horton to gain from its robust backlog, industry-leading market share, acquisitions and focus on more entry-level affordable homes, per the Zacks analyst.
Loan Growth Support M&T Bank (NYSE:MTB) Revenue, High Costs a Woe
Per the Zacks analyst, organic growth remained a key strength at M&T Bank, as reflected by rising loans and deposits aiding revenue growth.
Long-Term Capital Investments to Aid PNM Resources (PNM)
Per the Zacks analyst, PNM Resources continues to invest in utility assets to provide reliable services to customers. It plans to invest $3.9 billion between 2019 and 2023 to strengthen operations.
New Upgrades
Dollar Tree (NASDAQ:DLTR) Plus! to Aid Dollar Tree's (DLTR) Margin & Sales
Per the Zacks analyst, Dollar Tree is in the test phase of adding merchandise with higher price points to its stores. These products, displayed as Dollar Tree Plus!, will boost its margins and sales.
Solid Assets Balance Aid Cohen & Steers (CNS) Revenue Growth
Per the Zacks analyst, Cohen & Steers' revenues will continue to grow driven by robust assets balance, diverse product offerings and investment strategies. Its capital deployments remain impressive.
Europe Region Strength to Keep Driving Guess? (GES) Sales
Per the Zacks analyst, strong sales in Europe has been driving Guess?'s top line for a while now. Guess? plans to invest more in this region that is likely to witness sales growth in fiscal 2020.
New Downgrades
High Debt, Low Copper Prices to Hurt Southern Copper (SCCO)
The Zacks analyst is concerned that lower copper prices due to the Corona virus outbreak and a weak manufacturing sector as well high debt levels will weigh on Southern Copper's performance.
Sluggish Segment, Long Sales Cycle Ail Hewlett Packard (HPE)
Per the Zacks analyst, weak sales of Aruba Product are hurting Hewlett Packard's Intelligent Edge unit, denting its top line. Also, delayed closure of large deals due to long sales cycles is a woe.
Weakness in Natural Gas Price to Weigh on Cabot (COG)
The Zacks analyst is worried over plunging natural gas prices to multi-year lows and Cabot (COG) being one of the most gas-weighted upstream players, the company's performance remains under pressure.
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Southern Company (The) (SO): Free Stock Analysis Report
The Charles Schwab Corporation (NYSE:SCHW): Free Stock Analysis Report
NextEra Energy, Inc. (NEE): Free Stock Analysis Report
Fomento Economico Mexicano S.A.B. de C.V. (FMX): Free Stock Analysis Report
Duke Energy Corporation (NYSE:DUK): Free Stock Analysis Report
DISH Network Corporation (NASDAQ:DISH): Free Stock Analysis Report
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Zacks Investment Research