Wednesday, January 25, 2017
Today's Research Daily features an updated scorecard for the ongoing Q4 earnings season and fresh research reports on 16 major stocks, including Verizon (VZ) and Tesla (TSLA). To see of all of the 70 or so research reports issued by our analyst team today, click here >>>
Q4 Earnings Scorecard : Including all of this morning's earnings reports, we now have Q4 results from 105 S&P 500 members or 21% of the index's total membership. Total earnings for these 105 index members are up +6.5% on +2.2% higher revenues, with 71.4% beating EPS estimates and 53.3% beating revenue estimates. This is better earnings and revenue growth performance than we have seen from this group of 105 S&P 500 members in other recent periods, even after adjusting for the strong growth from the Finance sector. The proportion of companies beating EPS and revenue estimates, however, is tracking moderately below other recent periods.
You can read about the impact of the new administration on the corporate earnings picture in this article >>The Trump Effect on Corporate Earnings
Verizon shares have been laggards over the past year - the stock was up +3.9% over the past 12 months vs. AT&T's +16.8% gain and the +19% gain for the S&P 500 index - and the pressure is unlikely to ease following Tuesday's mixed quarterly report that showed bigger than expected post-paid churn and lower than expected subscriber additions. The company has been actively trying to diversify its business beyond wireless by building a mobile business through the AOL & Yahoo deals and 'Internet of Things' initiatives. But it will likely take a while before these efforts bear fruit. In the updated research report issued today, the Zacks analyst discusses the pros & cons of investing in Verizon shares at this stage. (You can read the full research report on Verizon here >> )
Tesla shares have been standout performers lately, with the stock up +25.9% over the past three months vs. +14.7% gain for the Zacks Auto industry. The company's positive updates about the Gigafactory and new deal with Panasonic have helped sentiment, offsetting disappointment over its delivery guidance. The company continues to generate a lot of passion among investors; it has an avid fan base, but also plenty of detractors. The detractors simply don't see any justification for the stock's lofty valuation given the niche nature of the product and the well-known operational and strategic headwinds facing the company. (You can read the full research report on Tesla here >> )
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>
Director of Research
Note: Note: Sheraz Mian regularly provides earnings analysis on Zacks.com and appears frequently in the print and electronic media. His weekly earnings related articles includeEarnings TrendsandEarnings Preview. If you want an email notification each time Sheraz publishes a new article, pleaseclick here>>>
Today's Must Read
The Zacks analyst thinks weakness in the Display segment and sluggish demand for heavy duty diesel products will hurt top-line growth in the near term.
As per the covering analyst, Q4 earnings were stretched due to escalating expenses.
The Zacks analyst is optimistic on Sony's attractive line-up of PS4 hardware and software, which will likely boost sales further. Also, its recent acquisitions should drive growth in the near future.
The covering analyst believes that extensive environmental regulations and changes in environmental mandates could impact PG&E Corporation's financial performance.
While Encana's lower cash costs and strong operational performance bode well, the Zacks analyst would prefer to wait for further price recovery before recommending investors purchase shares.
The covering analyst thinks Tyson Foods' continuous innovation & geographic diversity will boost the company. Sluggish beef & prepared foods segment pressurize top line of the company.
The Zacks analyst thinks in Q2, ResMed gained from strong U.S. sales led by solid device growth. However its currency woe remains a concern.
The Zacks analyst expects that Glaxo's new products Tivicay and Nucala to continue performing well. However, the top line will remain under pressure due to generic competition.
The covering analyst believes that Micron will benefit from an improvement in DRAM and NAND chips prices due to stronger-than-expected demand for PCs, servers and mobiles.
The Zacks analyst thinks Gap's solid holiday season comps were backed by its growth strategies and favorable customer demand. This encouraged management to raise its fiscal 2016 earnings view.
The Zacks analyst believes that continued weakness in Latin America and decline in seasonal activity in Europe, CIS and Africa led to the year-over-year fall in Schlumberger's earnings and revenues.
The covering analyst thinks higher input costs, merger-related expenses, weak demand for processed, frozen, and dry foods, carbonated soft drinks and a stronger dollar may weigh on WestRock's results.
The Zacks analyst believes that the company might struggle in the fourth quarter due to low advertising revenues. Adverse foreign currency movements are also likely to hurt results.