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Top Research Reports For Verizon, Alibaba & Wells Fargo

Published 06/15/2017, 12:45 AM
Updated 07/09/2023, 06:31 AM
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Thursday June 15 2017

Today's Research Daily features new research reports on 16 major stocks, including Verizon (VZ), Alibaba (NYSE:BABA), and Wells Fargo (WFC). 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 >>>

Verizon shares have been laggards over the past year -- the stock is down -12.7% over the past 12 months vs. AT&T (NYSE:T)'s -4.4% decline and the +17.3% 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. On the digital media front, the company recently completed its Yahoo (NASDAQ:YHOO) purchase, which it plans to run as part of its previously acquired digital properties like AOL, Huffington Post and others. 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 almost 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 >>>).

Shares of Strong Buy rated Alibaba shares have outperformed the broader market as well as the peer e-commerce space over the last one year (it is up more than +74.6%), with the trend expected to remain in place given continued growth in its core e-commerce business and growing cloud computing services. The Zacks analyst likes the company’s dominance in China's mobile commerce market, efforts to develop new products, international growth opportunities, strong financial position and growing cloud computing services. On the flip side, the need for continued infrastructure investments, growing competition and increasing competition from Tencent Holdings and Baidu remain major overhangs.

(You can read the full research report on Alibaba here >>>).

Wells Fargo shares continue to struggle, reflecting lingering issues pertaining to the customer accounts issue. The stock is down -1% in the year-to-date period, underperforming the Zacks Major Banks industry, which is up +3.3% in the same time period. Wells Fargo lacks investment banking and capital markets assets that have been a source of strength for many of its peers lately. But the bigger issue for the bank has been the customer accounts issue. Troubles have intensified following the bank’s $190-million settlement last year to resolve regulators’ claims of illegally opening millions of illegal accounts. While the current crisis at the company will take some time to alleviate, the Zacks analyst thinks continued growth in loans and deposits, coupled with cost cuts (the bank plans $4 billion in cost cuts by 2019) should help support results. Regulatory reform remains another potential macro tailwind, though the timing of any legislative enactments on this front remain uncertain.

(You can read the full research report on Wells Fargo here >>>).

Other noteworthy reports we are featuring today include Caterpillar (NYSE:CAT), U.S. Bancorp (USB) and Oracle (ORCL).

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Sheraz Mian

Director of Research

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>>>

Featured Reports

Caterpillar (CAT) Rides on Operating Cost Cuts, Asia Markets

The Zacks analyst thinks Caterpillar has staged a turnaround thanks to its incessant focus on cost reduction and improvement in the Asia Pacific region and expects this momentum to continue.

Loan Growth Supports U.S. Bancorp (USB), Higher Costs a Woe

The covering analyst believes that improving economy and initiatives to expand market share have helped U.S. Bancorp witness growth in loan and deposits. However, mounting expenses remain a headwind.

Plains All (PAA) to Gain From Permian Amid Low NGL Volumes

The Zacks analyst believes Plains All American is set to gain from its extensive Permian Basin assets despite low return from its NGL business.

Acuity (AYI) Rides on Innovative & Energy-Efficient Products

According to the Zacks analyst, Acuity Brands' diversified portfolio of innovative lighting control solutions and energy-efficient luminaries are driving growth.

Sprint's (S) Unlimited Plans to Lure Users, High Debt a Woe

Per the covering analyst, the unlimited data plans are Sprint's continuous efforts to lure customers from its rivals.

High Passenger Revenues Drives Alaska (ALK), Cost Woes Stay

Passenger revenues have shot up on the expansion following the Virgin America purchase. However, the Zacks analyst is concerned by headwinds like high costs and debts.

Henry Schein's (NASDAQ:HSIC) Dentsply Deal May Weaken Margins Further

Per the Zacks analyst, Henry Schein's venture in digital dentistry through Dentsply Sirona deal may intensify its already weak operating margin scenario on escalating education and training expenses.

New Upgrades

Eastman (EMN) to Gain from Taminco Buy, Operating Cost Cuts

The Zacks analyst is impressed with Eastman Chemical's efforts to cut operating costs and improve productivity. The company will also gain from strategic acquisitions, especially Taminco.

Canadian Telecom Focus, Drive to Acquire Spectrum Lifts Shaw (SJR)

Shaw has placed itself as a pure-play Canadian telecom company with sale of Shaw Media to Corus Entertainment. Its bid to acquire wireless spectrum is another positive, per the Zacks analyst.

Oracle (ORCL) Drives on Robust Cloud-based Product Portfolio

According to the Zacks analyst, Oracle's robust cloud-based product portfolio will continue to boost its top-line growth. This is also expanding its market share and competitive prowess.

New Downgrades

Weakness in Print Operations to Dent John Wiley (JW.A) Sales

Per the Zacks analyst, John Wiley & Sons' top line is likely to be hurt as it continues to face weak demand for printed books. Evidently, revenues for publishing declined 7% in fiscal 2017.

Excessive North American Exposure to Hurt Baker Hughes (BHI)

Baker Hughes has huge exposure to the North American market from where it generates half of its sales. Any disruption in the continent will affect its financials, according to the Zacks analyst.

SUPERVALU's (SVU) Weak Retail Business Remains a Concern

Lower traffic, price competition, ongoing food deflation, and lower SNAP (Supplemental Nutrition Assistance Program) benefits leads to weak retail business sales, per the Zacks analyst.



Wells Fargo & Company (NYSE:WFC): Free Stock Analysis Report

Verizon Communications Inc. (NYSE:VZ): Free Stock Analysis Report

U.S. Bancorp (USB): Free Stock Analysis Report

Oracle Corporation (NYSE:ORCL): Free Stock Analysis Report

Caterpillar, Inc. (CAT): Free Stock Analysis Report

Alibaba Group Holding Limited (BABA): Free Stock Analysis Report

Original post

Zacks Investment Research

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