Wednesday, February 14, 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 ExxonMobil (XOM), Caterpillar (CAT) and Union Pacific (UNP). 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 >>>
ExxonMobil 's shares have underperformed the Zacks Integrated Oil industry (-6.1% vs. -0.2%) as well as peer Chevron (-2.7%) in the last three months. ExxonMobil has a leading position in the energy industry owing to the size and diversity of its asset base, both in terms of business mix and geographical footprint.
With a stable cash position, the company's balance sheet is one of the best in the industry. The Zacks analyst likes the fact that the integrated energy firm has combined its refining & marketing businesses. This will allow the company to take better decisions and boost performance. ExxonMobil will generate more cashflow from downstream activities, also helping it counter the volatility in its upstream business.
However, ExxonMobil posted lower-than-expected results in fourth-quarter 2017. The company's rising exploration expenses is cause for concern. During fourth-quarter 2017, ExxonMobil's exploration cost surged more than 106%.
(You can read the full research report on ExxonMobil here >>> ).
Shares of Buy-rated Caterpillar have gained +55.5% over the past one year, outperforming the Zacks Construction and Mining industry which has increased +53.2% over the same period. Caterpillar reported a rise of 34% in global retail sales for the three months ended January 2018, at par with the performance witnessed in December 2017 and at levels last seen in August 2011.
Backed by strong order rates, lean dealer inventories and strong backlog, Caterpillar projects EPS in $8.25-$9.25 range for 2018, a 27% year-over-year rise at the mid-point. The Construction segment will benefit from continued improvement in North American residential, non-residential and infrastructure markets.
Rising commodity prices will drive Resource Industries and Energy & Transportation's revenues. Ongoing cost cutting efforts and additional investments in expanded offerings and services will drive growth.
(You can read the full research report on Caterpillar here >>> ).
Buy-rated Union Pacific 's shares have outperformed the Zacks Rail industry as well as fellow railroad operator Norfolk Southern Corporation over the last six months. While Union Pacific has gained 22.4%, the industry it belongs to and Norfolk Southern have rallied 10.3% and 16.9%, respectively, in the same time period.
Ushering in further good news, Union Pacific's earnings per share as well as revenues increased in the fourth quarter of 2017. Higher freight revenues on the back of volume growth contributed to the uptick.
Also, in February 2018, the company announced its decision to increase quarterly dividends which is encouraging. In fact, this is the company's second dividend hike in three months. The new tax law is also a positive for the company. Its efforts to promote safety and enhance productivity are noteworthy as well. However, declining automotive volumes and high debt levels are concerning.
(You can read the full research report on Union Pacific here >>> ).
Other noteworthy reports we are featuring today include Anadarko (APC), Alexion (ALXN) and Sanofi (SNY).
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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 Previewreports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today's Must Read
Exxon's (XOM) Strong Refining Offsets High Exploration Costs
Improving Demand, Cost Cuts Fuel Caterpillar's (CAT) Growth
Volume Growth, Dividends & Buybacks Aid Union Pacific (UNP)
Diversified Ops Aid Rockwell Collins (COL) Amid Stiff Rivalry
Per the Zacks analyst, balanced exposure to both military and commercial aviation markets boost Rockwell Collins' growth. Yet the company faces steep competition from its peers.
Diamond (DO) Gains on Ultra Deepwater Rig Efficiency
The Zacks analyst believes that improvement in Ultra Deepwater rig efficiency will fuel growth, to be offset by lower utilization of jackups.
Diabetes Unit Weakness to Hurt Sanofi's (SNY) Sales in 2018
Sanofi's Diabetes franchise is under significant pressure due to a tough U.S. payer environment, per the Zacks analyst. The declining trends in the franchise are expected to continue in 2018.
Higher Rates, Loan Growth Boost Ally Financial's (ALLY) Revenues
Per the Zacks analyst, Ally Financial is well poised for revenue growth, supported by growth in loans and strong originations.
Wynn Resorts (WYNN) Benefits From Non-Gaming Business
The Zacks analyst believes that decent visitation pattern, infrastructure development and government's efforts to boost tourism in Macau are driving Wynn Resorts' non-gaming revenues.
Centene (CNC) Poised for Growth on Solid Cash Position
Per the Zacks analyst, consistent cashflow generation has enabled Centene to take up growth-oriented strategies like acquisition to pave the way for long-term growth.
Cboe Global (CBOE) Set To Grow On improving Transaction Fees
Per the Zacks analyst, trading volume growth at Cboe Global continues to drive improving transaction fees that drive topline growth.
Anadarko (APC) Gains from Oil Focus & Asset Divestitures
The Zacks analyst believes Anadarko Petroleum will gain from its focus on domestic oil assets as prices improve. Sale Proceeds from non-core asset will help lower debts and strengthen core assets.
Strong Commercial & Industrial Business Aids Snap-On (SNA)
Per the Zacks analyst, solid traction of Snap-On's Commercial & Industrial Group business fueled by strong performance in European-based hand tools business continues to lend momentum to the company.
Acquisitions & Strong Free Cash Flow Boost Fortive (FTV)
Per the Zacks analyst, Fortive benefits from strategic acquisitions like Industrial Scientific and Landauer. The company generates strong free cash flow, which is commendable.
Dependence on Soliris for Growth Weighs on Alexion (ALXN)
Per the Zacks analyst, although Alexion's lead drug Soliris has performed impressively, the company is heavily dependent on the drug for growth. Pricing is also expected to impact the top-line by 3%.
Higher Input & Restructuring Costs to Hurt Sealed Air (SEE)
Per the Zacks analyst, moderate growth in North America in the Food Care segment, higher costs from restructuring actions and raw material inflation will impact Sealed Air's results in the near term.
Dependence on Partners, Stiff Competition Ail Alnylam (ALNY)
Per the Zacks analyst, Alnylam is heavily dependent on its partnerships for supporting operations and pipeline development activities. The company also faces stiff competition.
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 reportExxon Mobil Corporation (XOM): Free Stock Analysis ReportUnion Pacific Corporation (UNP): Free Stock Analysis ReportSanofi (SNY): Free Stock Analysis ReportCaterpillar, Inc. (CAT): Free Stock Analysis ReportAnadarko Petroleum Corporation (APC): Free Stock Analysis ReportAlexion Pharmaceuticals, Inc. (ALXN): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research