Top Stock Reports for Philip Morris, PayPal & Dominion Energy

Shutterstock photo

Friday, September 27, 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 Philip Morris (PM), PayPal (PYPL), and Dominion Energy (D). 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 >>>

Philip Morris ' shares have underperformed the Zacks Tobacco industry over the past six months (-19.3% vs. -13.9%). The Zacks analyst thinks the company has been gaining from solid revenues in the reduced risk products (RRPs) category.

The company is making constant efforts to expand in this space. In fact, the top and the bottom lines grew year over year during the second quarter of 2018, courtesy of favorable cigarette pricing and solid RRPs performance, with the latter being bolstered by the success of iQOS. To sustain growth in this category, the company plans to invest close to $600 million in 2018.

Further, the company continues to expect price hikes to aid maintaining margin growth. However, a persistent decline in cigarette volumes, stemming from consumers' rising health consciousness and stringent government regulations on tobacco products, is a major headwind. These factors, which have been affecting the industry for a while, caused a 1.5% drop in Phillip Morris' cigarette volumes during second quarter.

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

Shares of PayPal have outperformed the Zacks Internet Software industry over the past year (+40.5% vs. +35.6%). PayPal continues to witness expanding customer base with the help of its robust Venmo, Choice and One Touch. Also, the company's tie-up with MasterCard is aiding the adoption rate of Venmo.

The company's ongoing partnership with ShinhanCard remains positive for its presence in South Korea. Also, its extended partnership with Google and eBay will continue to strengthen its customer base further. This will keep adding strength to PayPal's total payments volume.

The Zacks analyst thinks an expanding product & services portfolio and global presence will continue to benefit the company's market share. However, exposure to foreign exchange and intensifying competition are major concerns.

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

Buy ranked Dominion Energy 's shares have gained +0.6% over the last three months, outperforming the Zacks Electric Power industry, which has lost -1.2% over the same period. Dominion Energy's Cove Point Liquefaction project has started operations and is contributing as per expectations. The Zacks analyst thinks Dominion Energy is benefiting from its regulated growth projects and synergies from Questar's acquisition.

The company's expansion of electric transmission, natural gas facilities and midstream assets are strong positives. Its merger deal with SCANA received FERC Nod and is going to be immediately accretive to earnings of the company.  However, any delay in ongoing capital projects could adversely impact profitability of the company.

Reduction in solar investment tax credits and share dilution may affect its future results. The company and its gas unit's dependency upon third-party producers for natural gas supply increases risk.

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

Other noteworthy reports we are featuring today include Texas Instruments (TXN), Marsh & McLennan (MMC) and PPG Industries (PPG).

5 Medical Stocks to Buy Now

Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.

New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.

Click here to see the 5 stocks >>

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 Trendsand Earnings Previewreports. If you want an email notification each time Sheraz publishes a new article, please click here>>>

Today's Must Read

Reduced Risk Products to Drive Philip Morris' (PM) Sales

Robust Product Lines Benefit PayPal (PYPL) Amid Competition

Dominion (D) Benefits From New Projects and Sales Growth

Featured Reports

Solid Product Portfolio & G&K Buyout to Aid Cintas (CTAS)

Per the Zacks analyst, Cintas will gain from its existing product offerings and efforts to develop new products. Also, G&K buyout will aid Uniform Rental and Facility Services segment.

Production from U.S. Resource Plays Boost Marathon (MRO)

While Marathon is set to benefit from strong oil production growth in the U.S. resource plays, the Zacks analyst is worried over the lack of clarity on dividend increase and share repurchases.

Lead Drug Jakafi Fuels Incyte (INCY) Amid Pipeline Setbacks

Per the Zacks analyst, Jakafi continues to drive growth for Incyte and a label expansion of the drug will boost sales further. However, failure of epacadostat in a late-stage study was disappointing.

Investment Income Aids Ares Capital (ARCC), High Costs a Woe

Per the Zacks analyst, investment income growth and focus on credit performance will support Ares Capital's profitability.

New Contract Wins, Aggressive Share Buyback Aids Jabil (JBL)

According to the Zacks analyst, Jabil's top-line growth is benefiting from new contract wins in healthcare, automotive, cloud and 5G.

Returns-Focused Growth Plan Bodes Well for KB Home (KBH)

With the Returns-Focused Growth plan and solid housing fundamental in place, KB Home's revenues and operating margin are expected to significantly improve in 2018 and beyond, per the Zacks analyst.

FactSet (FDS) Rides on Client Retention Amid Competition

The Zacks analyst is impressed with growth in FactSet's annual subscription value, driven by client additions.

New Upgrades

Inogen (INGN) Gains From Solid Business-to-Business Sales

Inogen gains ground on strong business-to-business segmental revenues. The Zacks analyst is also bullish about the segment's growth in Europe.

Apache (APA) Rides on Alpine High Find and Midstream Efforts

Per the Zacks analyst, Apache's sharp focus on Alpine High Play is expected to generate top-tier returns. Also, the firm's ambitious plans to enrich the region's midstream prowess bode well.

Robust Used-Car Market & Store Expansion Aid CarMax (KMX)

Per the Zacks analyst, improved store sales & digital initiatives are aiding CarMax's comparable-store used vehicle sales. The rise in sales is being complemented by aggressive store expansion.

New Downgrades

Competition In Auto Chip Space Ails Texas Instruments (TXN)

The Zacks analyst believes that rising competition particularly in auto chips is currently a major headwind for Texas Instruments. Negative currency effect and a high debt load also pose concerns.

High Expenses Hurt Marsh & McLennan (MMC)

Per the Zacks analyst, the company's operating expenses escalated over the last two years due to higher compensation and benefits. A consistent increase in expenses might weigh on margins.

Higher Input Costs, Currency Weigh On PPG Industries (PPG)

Per the Zacks analyst, higher raw material costs will continue to affect PPG's margins. The company also faces headwind from unfavorable currency translation which will hurt its sales in Q3.

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 report

Texas Instruments Incorporated (TXN): Free Stock Analysis Report

PayPal Holdings, Inc. (PYPL): Free Stock Analysis Report

PPG Industries, Inc. (PPG): Free Stock Analysis Report

Philip Morris International Inc. (PM): Free Stock Analysis Report

Marsh & McLennan Companies, Inc. (MMC): Free Stock Analysis Report

Dominion Energy Inc. (D): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks
Referenced Symbols: TXN , PYPL , PPG , PM , MMC

More from Zacks.com




Equity Research

Research Brokers before you trade

Want to trade FX?