Top Analyst Reports for Apple, Microsoft & General Electric
Thursday, May 2, 2019
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 Apple (AAPL), Microsoft (MSFT) and General Electric (GE). 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 >>>
Apple’s shares have gained +33.4% year to date and have outperformed the broader market with the S&P 500 increasing +15.8% over the same period. Apple’s second-quarter 2019 results were hurt by continued weakness in iPhone demand, particularly in China and emerging economies.
The Zacks analyst thinks the company continues to lose share in the smartphone market due to stiff competition from Chinese handset makers. Although Apple’s Services segment and newer products like Apple Watch hold promise, they are yet to deliver results strong enough to negate the decline in iPhone shipments.
However, iPhone demand is expected to improve in China, driven by lower VAT, and the company’s financing and trade-in programs. Moreover, price reductions are also expected to boost iPhone demand in certain emerging countries. Meanwhile, the Services segment is expected to grow strongly on solid App Store sales and increasing adoption of Apple Music and Apple Pay.
Shares of Buy-Ranked Microsoft have gained +36% in the past year, outperforming the Zacks Computer Software industry’s gain of +29.6% during the same period. Microsoft reported stellar third-quarter results. Robust execution and better-than-expected demand from customers for hybrid cloud offerings drove the quarterly results.
The Zacks analyst thinks Microsoft is benefiting from growing user base of its different applications like Office 365 commercial, Dynamics, Outlook mobile and Teams. Further, acquisitions like PlayFab and GitHub expand Microsoft’s TAM and penetration.
However, projections of a moderating growth rate in commercial cloud gross margin, and OEM Pro and Windows commercial businesses is a headwind. Also, competition is stiff and its dominant position in the PC market continues to be challenged.
General Electric’s shares have outperformed the Zacks Diversified Operations industry year to date (+33.5% vs. +23.9%). The Zacks analyst thinks the company is poised to become more competent on the back of the portfolio-restructuring program. In sync with this, it intends to focus on three core businesses — Power, Aviation and Renewable Energy — and gradually exit all others.
Also, reduced quarterly dividend rate and reorganization in the Power business are likely to benefit results going forward. In the first quarter of 2019, the company's earnings surpassed expectations but declined year over year due to weakness in revenues and margins.
In the quarters ahead, a weakening Power business remains a key cause of concern for the company. General Electric expects internal and external challenges to continue hurting this business arm. Also, headwinds related to unfavorable movements in foreign currencies are a concern.
Other noteworthy reports we are featuring today include Ecolab (ECL), Travelers Companies (TRV) and Celgene (CELG).
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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
Per the Zacks analyst, Celgene's growth driver, Revlimid along with Otezla boost revenues. However, pipeline setbacks are a concern. The focus remains on the merger agreement with Bristol-Myers.
Ecolab continues to gain from solid prospects of its core Global Industrial arm. The Zacks analyst is apprehensive about a highly competitive chemical speciality market.
The Zacks analyst thinks BP's strong portfolio of key upstream projects will support crude production growth.
Per the Zacks analyst, Travelers is set to grow on high retention rate, pricing gains, positive renewal rate changes.
Per Zacks analyst, Fidelity is well positioned to benefit from investments in mobile banking and innovative products such as PayNet and BuyWay.
Per the Zacks analyst, Corning is well positioned to benefit from its ongoing investments in product development and manufacturing capacity, despite decline in glass prices at Display Technologies.
Per the Zacks analyst, steady capital investments made in infrastructure projects and increasing focus on enhancing renewable generation assets will likely drive DTE Energy's future performance.
Per the Zacks analyst, strong Climate Solutions segment driven by strength in commercial and residential HVAC markets and compression technologies business will lend momentum to Ingersoll-Rand.
Per a Zacks analyst, IDEX is likely to gain from strengthening end markets, with organic sales likely to grow 4-5% year over year in 2019. However, high costs and forex woes remain concerns.
Per the Zacks analyst, robust construction activity, mainly in non-residential markets, and accretive acquisitions will help EMCOR to drive profits.
The Zacks analyst is concerned about the loss of revenues at American Airlines due to the grounding of Boeing 737 MAX jets. Moreover, high fuel costs are hurting the bottom-line.
Per the Zacks analyst, steadily increasing non-interest expenses and high exposure to commercial loan portfolios continue to keep Huntington's financials under pressure.
Per the Zacks analyst, with increasing market competition, Finisar continues to struggle with weak demand and soft margins owing to higher promotional offers and discounts to woo customers.
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The Travelers Companies, Inc. (TRV): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
General Electric Company (GE): Free Stock Analysis Report
Ecolab Inc. (ECL): Free Stock Analysis Report
Celgene Corporation (CELG): Free Stock Analysis Report
Apple Inc. (AAPL): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.