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Top Stock Reports For Caterpillar, Texas Instruments & Alphabet

Published 09/22/2017, 03:30 AM
Updated 07/09/2023, 06:31 AM

Friday, September 22, 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 Caterpillar (NYSE:CAT) (CAT), Texas Instruments (TXN) and Alphabet (NASDAQ:GOOGL) (GOOGL). 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 >>>

Strong-Buy rated Caterpillar’s shares have gained +34.6% year-to-date, outperforming the Zacks Construction and Mining industry which has increased +32.5% over the same period. Caterpillar's August sales rose 11%, driven by improvement in Asia Pacific and construction.

Caterpillar was awarded a five year $663.6 million fixed-price contract from the Pentagon to supply commercial construction equipment. Backed by improved order activity, Caterpillar guides revenue in the range of $42–$44 billion and earnings per share of $5.00 for 2017. The mid-point of the ranges reflects a year-over-year growth of 12% and 46%, respectively.

The Zacks analyst thinks Asia Pacific will continue to be a catalyst for growth, owing to increased infrastructure and residential investment in China. Leading indicators of U.S. construction signal robust conditions ahead that bode well for Caterpillar. Efforts to reduce costs will help boost margins.

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

Shares of Buy-rated Texas Instruments gained +17.9% year to date, underperforming the Zacks General Semiconductor industry which has gained +23% over the same period. However, Texas Instruments is one of the largest suppliers of analog integrated circuits.

The Zacks analyst expects margin expansion to continue driven by the secular strength in the auto and industrial markets, a stronger mix of analog and embedded processing products, benefits of restructuring initiatives and more than 300mm capacity coming online. Moreover, the recently announced 24% dividend hike and an additional $6 billion share buyback reflect the company's solid cash flow generation ability and balance sheet strength.

The only negative at this point appears to be intensifying competition particularly for auto chips, given recent market consolidation. There is also the question of negative currency effect and a high debt load.

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

Alphabet’s shares have underperformed the Zacks Internet Services in the year to date period (the stock is up +19.6% vs. +21% gain for the sector). Alphabet is one of the leading providers of target-based advertisements on the web. The company's second quarter earnings exceeded the Zacks Consensus Estimate.

The Zacks analyst likes Alphabet’s excellent execution, which is helped it to maintain its dominant share in a competitive, fast-growing search market. Its focus on innovation, strategic acquisitions and Android OS should continue to generate strong cash flows. Its diversification strategy is also positive, but requires significant investment and involves uncertain payback periods, particularly since these efforts are at the cutting edge of technology. However, increasing litigation issues continues to impact the company’s profits.

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

Other noteworthy reports we are featuring today include Abbott (ABT), Adobe (ADBE) and Anthem (ANTM).

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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>>>

Featured Reports

Rising Air Traffic Aids AAR Corp (AIR), Stringent Laws Ail

Per the Zacks analyst, rising air traffic is expected to accelerate maintenance spending on aircraft, thereby aiding AAR Corp.

Valero's (VLO) Higher Throughput Volume to Offset Debt Load

The Zacks analyst believes that improving throughput volume on higher refinery utilization will help Valero to generate more cash flow.

SaaS Revenue Growth Buoys Citrix (CTXS), High Costs Ail

The Zacks analyst is impressed by the strong growth in Software-as-a-Service (SaaS) revenues. High operating expenses are, however, hurting the bottom line.

Regeneron (REGN) Looks Strong On Eylea Growth & Dupixent

Per the Zacks analyst, drug approvals like Dupixent and Kevzara and label expansion of Eylea will continue to boost performance.

Adobe (ADBE) Creative Cloud Business Drives Growth

With Adobe delivering strong Q3 results, the Zacks analyst believes that the company's strong position in cloud business and expansion in the AI space will continue to drive growth going forward.

Anthem (ANTM) Grows on Premiums, Public Exchange Woes Hurt

Per the Zacks analyst, although premium income and investment income strengthen Anthem's revenue base, loss incurred on its public exchange business continues to weigh on its margins.

Darden (DRI) Rides on Sales-boosting Efforts at Olive Garden

Per the Zacks analyst, initiatives at its Olive Garden brand like simpler kitchen system, menu innovation, digital changes and the To-Go business poise Darden well for solid revenue growth ahead.

New Upgrades

Novartis' (NVS) Oncology Drugs & Biosimilars To Drive Growth

Novartis' oncology portfolio looks strong. Per the Zacks analyst, the approval of Kisqali and CAR T therapy Kymriah is a major boost while the progress in biosimilars pipeline is impressive.

Amphenol (NYSE:APH) Remains Well Poised on Holistic Growth Model

Per the Zacks analyst, a balanced organic and inorganic growth model, a lean and flexible cost structure, and an agile and entrepreneurial management team augur well for Amphenol's long-term growth.

Abbott (ABT) Thriving on New Product Launch, St Jude Synergy

Per the Zacks analyst, Abbott is executing its St Jude integration strategy satisfactorily and gaining in terms of synergy achievements. Also new product and reimbursement approvals are encouraging.

New Downgrades

Higher SG&A Costs to Hurt Bed Bath & Beyond's (NASDAQ:BBBY) Margins

Per the Zacks analyst, Bed Bath & Beyond's margins have been pressurized for five quarters now owing to higher shipping, coupon and SG&A expenses. This trend is likely to continue in fiscal 2017.

High Exposure To Risky Loans Hurt KeyCorp (NYSE:KEY) Financials

Per the Zacks analyst, KeyCorp's significant exposure to real estate and home equity loans is likely to hurt its financials in case there is any further deterioration in real estate prices.

High Operating Costs, Weak Balance Sheet Hurts Teladoc (TDOC)

The Zacks analyst is concerned with the company's huge expenses on advertising, technology, administrative costs as well as depreciation and amortization. High debt and cash consumption hurts.



Texas Instruments Incorporated (NASDAQ:TXN): Free Stock Analysis Report

Alphabet Inc. (GOOGL): Free Stock Analysis Report

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

Anthem, Inc. (ANTM): Free Stock Analysis Report

Adobe Systems Incorporated (NASDAQ:ADBE): Free Stock Analysis Report

Abbott Laboratories (NYSE:ABT): Free Stock Analysis Report

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Zacks Investment Research

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