Wednesday, January 31, 2018
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 Morgan Stanley (NYSE:MS), U.S. Bancorp (USB) 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 >>>
Buy-rated Morgan Stanley’s shares have outperformed the Zacks Investment Banking industry over the last year (+32.5% vs. +25%). The performance was supported by the company’s impressive earnings surprise history, having surpassed expectations in all the trailing four quarters.
The company’s fourth-quarter 2017 results reflected higher underwriting fees and a slight rise in net income. The Zacks analyst likes the company’s efforts to lower balance sheet risk and strengthen wealth management operations as well as its cost saving initiatives.
Given a solid capital position, it will likely continue enhancing shareholder value through efficient capital deployment activities. While persistent fall in net interest income and overall trading weakness are expected to hurt the company’s growth, lower tax rates will aid profitability in the quarters ahead.
(You can read the full research report on Morgan Stanley here >>>).
Shares of U.S. Bancorp have underperformed the Zacks Major Banks industry over the last six months, gaining +8.4% vs +19.3%. However, the company boasts an impressive earnings surprise history. It has surpassed expectations for earnings in three out of the trailing four quarters.
The company’s fourth-quarter 2017 earnings were aided by easing margin pressure on rising rates. Elevated average loans and deposit balances reflected organic growth. The Zacks analyst likes U.S. Bancorp's solid business model, core franchise, lower tax rate and diverse revenue streams.
Also, the company’s organic growth remains solid and is likely to benefit from the improving economic scenario. However, escalating expenses and litigations remain key concerns. Additionally, stretched valuation underlines limited upside potential.
(You can read the full research report on U.S. Bancorp here >>>).
Buy-rated Cisco’s shares have outperformed the Zacks Networking industry over the past one year, gaining +38.5% vs. +36.7%. The Zacks analyst thinks the company’s expanding footprint in the rapidly growing security market presents significant growth opportunity. Additionally, partnerships with Telenor, Apple (NASDAQ:AAPL), IBM (NYSE:IBM) and Microsoft (NASDAQ:MSFT) are other positives.
Also, 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 American Airlines (AAL), Maxim (MXIM) and AMD.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
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
Passenger Revenue Growth Aids Hawaiian (HA) Amid High Costs
The Zacks analyst appreciates the company's performance with respect to passenger revenues. Its history with respect to punctuality is encouraging. However, high costs are hurting the bottom line.
Robust Demand in India, China Markets Aids A.O. Smith (AOS)
Per the Zacks analyst, strong consumer product demand in China and India, benefits from Aquasana buyout and thriving water heater prospects in the U.S. will lend momentum to A.O. Smith's growth.
Maxim (MXIM) Rides On Strong Auto Demand, Risks Remain
Per the Zacks analyst, strong growth in auto and industrial markets will continue to aid growth. However, weakness in the handset market and overdependence on Samsung (KS:005930) remain concerns.
Hill-Rom (HRC) Gains Globally, 'One Hill-Rom' Adds Value
The Zacks analyst is impressed with Hill-Rom's consistent growth internationally banking on the 'One Hill-Rom' approach. Product innovation adds value.
Loan Growth & Acquisitions Support People's United (PBCT)
Per the Zacks analyst, People's United's strong liquidity position makes it well poised to grow through acquisitions.
CME (CME) Gains From Increasing Clearing & Transaction Fees
Per the Zacks analyst, CME Group's (NASDAQ:CME) organic growth is driven by higher clearing and transaction fees, plus access and communication fees as well as solid average daily volumes.
Rise in Digital Subscribers to Benefit New York Times (NYT)
Per the Zacks analyst, The New York Times Company will gain from rise in digital subscribers and advertising.
New Upgrades
Fleet Upgrade, TRASM Growth Aid American Airlines (AAL)
The Zacks analyst likes the company's performance with respect to total revenue per available seat miles (TRASM: a key unit revenue measure). Efforts to modernize its fleet are also encouraging.
AMD Rides on Vega-Based GPU Product Rollouts & Partnerships
Per the Zacks analyst, Advanced Micro's release of Radeon RX Vega family of GPUs and alliance with companies like Baidu, Amazon (NASDAQ:AMZN), Tencent, Microsoft and JD.com will drive the top and bottom line.
Texas Dealership Acquisitions Aid Group 1 Automotive (GPI)
Per the Zacks analyst, dealership acquisitions in Texas will strengthen Group 1 Automotive's footprint in the fast growing El Paso market and cement its partnership with Audi and Subaru brands.
New Downgrades
Dr. Reddy's (RDY) Topline Hurt by High Channel Consolidation
Per the Zacks analyst, Dr. Reddy's is witnessing pricing pressures due to enhanced channel consolidation and increased competitive pressure on sales of some of its key generic products.
Highly Competitive HCIT Markets Ail Quality Systems (QSII)
Per the Zacks analyst, cutthroat competition in the Healthcare Information Technology (HCIT) markets is likely to keep Quality Systems' margins under pressure. Operating expenses are also high.
Slowdown in Brand Advertising Business Batters Sohu (SOHU)
Per the Zacks analyst, intense competition in the online media and video industry is hurting Sohu's brand advertising business.
Maxim Integrated Products, Inc. (NASDAQ:MXIM): Free Stock Analysis Report
Morgan Stanley (MS): Free Stock Analysis Report
Cisco Systems, Inc. (NASDAQ:CSCO): Free Stock Analysis Report
Bank of America Corporation (NYSE:BAC): Free Stock Analysis Report
Advanced Micro Devices, Inc. (NASDAQ:AMD): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
Original post
Zacks Investment Research