Top Analyst Reports for Caterpillar, General Motors & Citigroup
Tuesday, September 10, 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 Caterpillar (CAT), General Motors (GM) and Citigroup (C). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Caterpillar’s shares have outperformed the Zacks Construction and Mining industry (0.2% vs. 0.1%) in the year-to-date period. The Zacks analyst thinks that Caterpillar’s global machine sales growth rate has been on a downward spiral over the past few months, which is concerning.
Notably, the company’s July global retail sales growth of 4% was marked as the lowest so far this year. The company anticipates earnings per share on the lower end of its guidance of $12.06-$13.06 and sales growth to be modest for 2019. In the Construction Industries segment, North America will likely aid growth while China will be a headwind.
Improving commodity prices will support capital expenditure in the mining sector, which will drive the Resource Industries segment. Investments in expanded offerings and services, and digital initiatives like e-commerce will also fuel growth. Its cost-reduction efforts will help sustain margins despite material cost inflation owing to tariffs.
Shares of General Motors have outperformed the Zacks Domestic Automotive industry over the past six months, gaining 2.5% vs -2%. The Zacks analyst believes that strong demand for profitable trucks and SUVs is aiding General Motors’ revenues.
The company’s hot-selling brands in America like Chevrolet Silverado, Equinox and GMC Sierra are driving the top line. The firm is increasing capacity investment in emerging markets to enhance global sales, and is undertaking several initiatives to make its vehicles more advanced, safer and fuel efficient.
However, high cost of raw materials and rising tariffs amid heightening U.S.-Sino trade tiff may put pressure on the firm’s profitability. As it is, the company’s negative free cash flows and high debt load are causes of worry. Further, frequent recalls act as a headwind. As such, investors are recommended to wait for a better entry point.
Citigroup’s shares have gained 10.4% over the past six months, outperforming the Zacks Major Regional Banks industry, which has gained 2.6% over the same period.
The Zacks analyst believes that Citigroup’s streamlining efforts, along with strategic investments in core business, bode well for the long term. Also, a declining cost base supports its bottom-line improvement.
Steady capital-deployment activities are also commendable. However, pending litigation issues might keep legal expenses elevated. Further, decline in fee income is a concern for the company. Recently, at an investors' conference, chief financial officer Mark Mason commented that trading and investment banking revenues are expected to decline in third-quarter 2019. Further, NII outlook has also been lowered amid more Fed rate cut expectations.
Other noteworthy reports we are featuring today include Eli Lilly (LLY), Northrop Grumman (NOC) and Walgreens Boots Alliance (WBA).
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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 believes that Las Vegas Sands' planned investment in new capital projects in Macao and higher revenues from The Parisian Macao are also likely to drive growth.
The Zacks analyst is bullish about the Retail Pharmacy USA division of Walgreens witnessing comparable prescription growth.
Per the Zacks analyst, Prudential is set to grow on solid pension risk transfer business, momentum in U.S. Financial Wellness and international operations.
Per the Zacks analyst, sluggish sales from North American region due to declines in both wholesale and direct-to-consumer businesses remains a drag for Under Armour's top line.
Per a Zacks analyst, Stanley Black (SWK) gains from solid demand for products, including Craftsman, Lenox, Irwin and DeWalt FlexVolt.
Per the Zacks analyst, higher demand for newer drugs should drive Lilly's sales in the second half amid generic competition for drugs like Cialis, rising pricing pressure and currency headwinds.
Per the Zacks analyst, Northrop Grumman's recent capital investment worth $1,249 million will surely bolster the company's growth prospects in the near future.
Per the Zacks analyst, Fortinet is benefiting from strong global demand for Security Fabric offerings which is aided by digital transformation and security refresh cycle across most industries.
Per the Zacks analyst, Garmin will continue to gain from new products introductions, continued innovation and market expansion efforts in all business segments. Also, Tacx buyout will aid results.
Per the Zacks analyst, Group 1 Automotive will gain from strong performance of used vehicles as well as aftersales units. Moreover, acquisition in growth markets should drive its long-term growth.
Per Zacks analyst, Comerica's escalating expenses due to rising salaries and benefits expense remain a concern. Also, lack of diversification in the loan portfolio acts as a headwind for the company.
Per the Zacks analyst, slowdown in the demand from distributors due to high level of inventories in supply chain is hurting Vishay Intertechnology's diodes and, resistors and inductors segments.
The Zacks analyst is worried about the top line being hurt by weak Communication and Related Services (CRS) business due to decline in recall events and lower call volumes in communication solutions.
Walgreens Boots Alliance, Inc. (WBA): Free Stock Analysis Report
Northrop Grumman Corporation (NOC): Free Stock Analysis Report
Eli Lilly and Company (LLY): Free Stock Analysis Report
General Motors Company (GM): Free Stock Analysis Report
Caterpillar Inc. (CAT): Free Stock Analysis Report
Citigroup Inc. (C): 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.