Wednesday, October 11, 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 Apple (AAPL), Wells Fargo (WFC) and Altria Group (MO). 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 Apple 's shares are up +34.6% in the year-to-date period, handily outperforming the S&P 500 (up +13.8%) and the Zacks Technology sector (up +21.2%). Apple's enriched product portfolio that now includes the new iPhones, Watch 3 and 4K TV will help the stock sustain momentum against S&P 500 going forward. This, along with the company's $1-billion investment for acquiring original content and its plan to break into film distribution market will further boost services' revenues.
Apple recently collaborated with Steven Spielberg's Amblin TV and NBCUniversal to revive Amazing Stories . Additionally, foray into fast-growing technologies like AI & AR/VR are long-term growth catalysts. However, the new iPhone X at $999 is quite pricey, particularly for markets like China and India. Moreover, slight delay in launching the product as compared with iPhone 8 and 8 Plus, reflects supply chain issues. This can be a concern during the upcoming holiday season. Moreover, intensifying competition from cheaper Chinese handset-makers cannot be ignored.
(You can read the full research report onApple here >>> ).
Shares of Wells Fargo have underperformed the Zacks Major Banks industry year to date, increasing +0.9% vs. a gain of +10.5%. However, the company has an impressive earnings surprise history. The company has surpassed the Zacks Consensus Estimate for earnings in all the trailing four quarters. Wells Fargo plans $4 billion of cost cuts by 2019.
Moreover, though lesser regulations on lending and capital levels are not expected any time soon, these are likely to reduce costs of compliance significantly and allow banks to grow lending. Further, rising rates are easing margin pressure to an extent.
While the current crisis related to the revelation of illegally opening millions of illegal accounts last year at the company will take some time to alleviate, the Zacks analyst believes that consistent growth in loans and deposits and expansions will likely support its growth profile.
(You can read the full research report onWells Fargo here >>> ).
Shares of Altria have underperformed the Zacks Tobacco industry in the last three months (-6% vs. -12%), owing to declining demand of tobacco. The ongoing anti-tobacco campaigns and price rise to offset surging taxes have been hurting the demand for tobacco.
Nevertheless, the Zacks analyst believes the company's shift to low-risk, smokeless tobacco products to boost market share remains appealing. Altria has proactively responded to the changing market scenario toward low-risk tobacco products and offered several reduced risk tobacco products which helped it to maintain market share. MarkTen e-cigarette and Green Smoke e-vapor are few flagship products belonging to this category.
Further, Altria is expected to sell Philip Morris's iQOS heated tobacco product in the domestic market, once it gains approval from the FDA. The company is also on track with its cost-reduction initiatives and consolidation of certain manufacturing facilities to streamline operations.
(You can read the full research report onAltria here >>> ).
Other noteworthy reports we are featuring today include Pioneer Natural Resources (PXD), Caterpillar (CAT) and Charles Schwab (SCHW).
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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 Trendsand Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today's Must Read
Apple (AAPL) Ramps Up Programming, Partners with Spielberg
Loan Growth Aids Wells Fargo (WFC), Legal Issues Linger
Low-Risk Tobacco Products Boosts Altria's (MO) Top-line
Jack In the Box's (JACK) Menu Innovation to Revive Sales
Per the Zacks analyst, Jack in the Box's promotional offerings and particularly menu innovation is likely to drive sales amid a difficult operating environment
New Commercial-Cloud Platform Deals Aid Veeva Systems (VEEV)
The Zacks Analyst is upbeat on Veeva's commercial cloud platform, which registered multiple contracts around the world.
Accretive Acquisitions Buoy Global Payments' (GPN) Revenues
The Zacks analyst views favorably consistent revenue growth at the company driven by several acquisitions that have added to its scale causing transaction volume growth.
Omnicom's (OMC) Holistic Growth Model Marred by Brexit
Per the Zacks analyst, a balanced growth model and massive proliferation of channels are likely to improve Omnicom's top line.
Asian Market, Construction Buoy Caterpillar's (CAT) Topline
Per the Zacks analyst, improving Asia Pacific markets and momentum in construction will support Caterpillar's top line.
Advisory Solutions Aids Schwab (SCHW), Personnel Costs Rise
Per the Zacks analyst, Schwab's aggressive efforts to increase client base in advisory solutions and higher interest rates supports profitability.
Digital Realty (DLR) Taps Growth With Buyouts & Developments
Per the Zacks Analyst, Digital Realty's development efforts in Silicon Valley, merger with DuPont Fabros and solid balance sheet strength will likely drive its long-term growth.
New Generic Approvals To Boost Mylan's (MYL) Portfolio
Per the Zacks analyst, the FDA approval of Mylan's generic version of Copaxone 40 mg has significantly boosted the company's battered generic segment and should boost sales.
Noble Energy (NBL) Gains from Strong Volumes From DJ Basin
Per Zacks analyst better than expected oil and natural gas volumes from Noble's DJ Basin asset will boost performance of the company.
Pioneer Natural (PXD) to Gain on Oil-Rich Permian Acreage
Strong focus on the low-cost and lucrative Permian Basin will help Pioneer Natural generate significant cash flow for stockholders, according to the Zacks analyst.
Merck (MRK) Sales Hurt by Generic & Competitive Pressure
Generic competition and pricing pressure are hurting sales of some key drugs in Merck's portfolio, per the Zacks analyst. The diabetes franchise is also seeing slow sales lately.
IMAX Corp. (IMAX) Stung by Soft Box-office Revenues
The Zacks analyst is concerned about the company's disappointing run at the box-office. High costs are likely to hurt the company's bottom line in Q3, results of which will be out on Oct 26.
Under Armour's (UAA) Lackluster North America Sales a Concern
Per the Zacks analyst, Under Armour which had trimmed its sales view owing to moderation in North American business is a major concern, as the region is the key contributor to the company's top line.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free reportWells Fargo & Company (WFC): Free Stock Analysis ReportThe Charles Schwab Corporation (SCHW): Free Stock Analysis ReportPioneer Natural Resources Company (PXD): Free Stock Analysis ReportAltria Group (MO): Free Stock Analysis ReportCaterpillar, Inc. (CAT): Free Stock Analysis ReportApple Inc. (AAPL): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research