Thursday, January 26 2017
Today's Research Daily features an updated scorecard for the Q4 earnings season and fresh research reports on 16 major stocks, including Texas Instruments (TXN) and Lockheed Martin (LMT). 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 148 S&P 500 members or 29.5% of the index's total membership. Total earnings for these 148 index members are up +5.9% on +2.3% higher revenues, with 68.2% beating EPS estimates and 55.4% beating revenue estimates. This is better earnings and revenue growth performance than we have seen from this group of 148 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.
Looking at Q4 as a whole, combining the actual results from the 148 index members with estimates from the still-to-come 352 companies, total earnings are expected to be up +5.3% from the same period last year on +3.8% higher revenues. This is the best earnings and revenue growth pace in the last 8 quarters.
Strong Buy rated Texas Instruments shares have gained +55% over the last one year, outperforming the Zacks Semiconductor industry which has gained +51.4% over the same period. The company's fourth quarter revenues and earnings grew year-over-year. The analyst likes the company's improved margin outlook, secular strength in the auto and industrial markets, a stronger mix of analog and embedded processing products, benefits of restructuring actions and more 300mm capacity coming online. The only negatives at this point appear to be strengthening competition particularly for auto chips given recent market consolidation. (You can read the full research report on Texas Instruments here >> )
Lockheed Martin shares have gained +19.6% over the past year, modestly underperforming the aerospace/defense sector, which has gained +22.6% over the same period. However, Lockheed Martin ended 2016 on a strong note, with its fourth-quarter numbers beating expectations. Driving this momentum is Lockheed Martin's status as a bellwether for the defense space and the company's impressive cash flow generation abilities which it generously shares with its shareholders. The analyst likes the company's solid outlook, impressive revenue growth and potential share buybacks. However, the threat of sequestration looms large for this company, as it draws a major portion of its revenues from the defense department. (You can read the full research report on Lockheed Martin here >> )
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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 Trends andEarnings Preview. If you want an email notification each time Sheraz publishes a new article, pleaseclick here>>>
Today's Must Read
The Zacks analyst is positive on Canadian National's bottom-line performance in Q4. The company's decision to hike quarterly dividend is also encouraging.
Going forward, balanced growth across business lines and thriving end markets are expected to stoke growth for Waters Corp.
The Zacks analyst is bullish on Stryker's solid Q4 results. Stryker's innovative product pipeline is also encouraging.
The Zacks analyst thinks Total System's Q4 results reflected continued revenue momentum on the back of its robust NetSpend and merchant acquiring businesses.
The Zacks Analyst is upbeat on Intuitive Surgical's performance in the fourth-quarter of 2016 with strong growth in procedural volumes.
Yahoo delivered strong Q4 results with its earnings & revenues beating the Zacks Consensus Estimate. The company has shown continuous strong performance in mobile and native businesses.
The covering analyst thinks that with an impressive Q1 sales backlog along with a well-stocked supply of land, lots and homes, D.R. Horton is well positioned for 2017.
The Zacks analyst believes that slowdown in Chinese economy and demonetization of Indian currency might impact HP Inc.'s near-term performance.
The covering analyst thinks Level 3 Comm continues to face tough competition, customer concentration, foreign currency exchange rate risks and global macroeconomic fluctuations.