Monday, January 23 2017
Today's Research Daily features the updated scorecard for the Q4 earnings season and new research reports on 16 major stocks, including IBM (IBM) and Union Pacific (UNP). To see all of today's research reports, click here >>>
Q4 Earnings Scorecard : We now have Q4 results from 65 S&P 500 members that combined account for 19.8% of the index's total market capitalization. The reporting cycle ramps materially this week, with more than 100 S&P 500 members posting numbers. Total earnings for the 65 index members that have reported are up +4.2% on +2.4% higher revenues, with 67.7% beating EPS estimates and 50.8% beating revenue estimates. Other than positive EPS surprises that are currently tracking below the proportion we have been seeing from the same group of 65 index members, the 2016 Q4 results thus far represent an improvement over other recent historical periods in all respects.
You can read about the Q4 earnings season at our weekly Earnings Preview report: Q4 Earnings Growth the Highest in 8 Quarters
IBM shares have turned around over the last one year (up +39.7% vs. +20.4% for the Zacks Technology sector) on greater appreciation for the company's outlook. The Zacks analyst likes IBM's strategic growth initiatives, including its Big Data & business analytics, cloud computing, mobile and social business. The recent better than expected Q4 earnings report has helped sentiment as well. (You can read the full research report on IBM here >> )
Union Pacific shares have increased +19.9% since Nov 8, outperforming the Zacks Transportation sector, which has gained +13.5% over the same period. Driving the stock's outperformance despite well-known headwinds facing the transportation group as a whole is its track record of operating efficiencies, strong cash flows and shareholder-friendly policies. Ushering in further good news, Union Pacific reported better-than-expected earnings per share in the final quarter of 2016. Growing optimism about the economy following hopes of market friendly policies from the new administration is helping the stock as well as the broader transportation group. (You can read the full research report onUnion Pacifichere >> )
Other noteworthy reports we are featuring today include Yahoo (YHOO), General Motors (GM) and Google (GOOGL).
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Director of Research
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 Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here >>>
Today's Must Read
The Zacks analyst thinks that KeyCorp's Q4 earnings show that it is well positioned to benefit from improving interest rate scenario.
The covering analyst remains positive about Yahoo-Verizon acquisition deal. Yahoo will get a new name Altaba and CEO Mayer.
PPG's earnings beat estimates in Q4 but sales missed. While the company should gain from acquisitions and restructuring actions, currency remains a drag on its top line, as per the Zacks analyst.
The covering analyst assumes that loan growth witnessed by Commerce Bancshares in Q4 should lead to continued improvement in revenues.
Banking on its impressive fourth-quarter 2016 results, the Zacks analyst thinks that Check Point's focus on product refreshes, better mobile capabilities and buyouts will back growth.
As per the covering analyst, escalating expenses and lower revenues in Q4 remained a key concern for Interactive Brokers.
The Zacks analyst believes that Best Buy is on a roll, buoyed by its strategic efforts, store-in-a-store concept and solid earnings surprise history.
The Zacks analyst believes that Alphabet's search market share is a big positive, which along with its focus on innovation, diversification and strategic acquisitions continue to deliver growth.
The covering analyst appreciates the company's impressive performance in fourth quarter. ADTRAN's efforts to reward shareholders are also impressive.
The Zacks analyst thinks that General Motors' capital allocation strategy, investments in plants in the U.S. and emerging markets, product launches and focus on technology development are positives.
The Zacks analyst remains concerned about the year-over-year fall in sales and earnings. The below par Q4 performance of the Rail North America and American Steamship units raise concerns.
The covering analyst believes that near-term weakness in the communications end market, increasing competition and a mature electronic manufacturing services market are headwinds for Plexus.
The Zacks analyst thinks that rising land and labor costs, and competitive pricing pressure remains major concerns for D.R. Horton. Again, high mortgage rates may dilute the demand for new homes.