Top Analyst Reports for Netflix, Charter Communications & Dominion Energy
Thursday, September 26, 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 Netflix (NFLX), Charter Communications (CHTR) and Dominion Energy (D). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Netflix’s shares have underperformed the Zacks Broadcast Radio and Television industry in the past six months (-25.1% vs. -11.9%). The Zacks analyst expects Netflix to benefit from an expanding content portfolio despite increasing competition from the likes of YouTube, HBO, Amazon Prime video, Disney, Apple and Peacock.
The company provided an optimistic third-quarter outlook and believes that the lost shows (Friends and The Office) will free up budget that can be spent on original content. The acquisition of Seinfeld’s streaming rights is a positive in this regard. Meanwhile, estimates have been stable ahead of the company’s third-quarter earnings release. Netflix has a record of positive earnings surprises in recent quarters.
Nevertheless, high streaming content obligation and increased spending are expected to hurt cash flow generation. In fact, a higher cash burn rate in 2019 is a major headwind. Netflix’s shares have underperformed the industry on a year-to-date basis.
Shares of Charter Communications have gained 6.4% in the past three months, outperforming the Zacks Cable TV industry’s rise of 4.9%. The Zacks analyst believes that the company is benefiting from growth in Internet, mobile, commercial and video revenues. Increase in Internet speed at no extra cost is also aiding subscriber growth.
Additionally, Charter is looking to attract video customers by providing a new OTT video service. Moreover, lower capital expenditure, owing to a decline in consumer premises equipment and scalable infrastructure spending, is expected to boost profitability.
However, commercial revenues are expected to suffer due to migration of customers to Spectrum pricing and packaging from Legacy TWC and Legacy Bright House. Moreover, Charter persistently loses video subscribers, primarily due to cord-cutting and intense competition from streaming service providers like Netflix and Amazon.
Dominion Energy’s shares have gained 12.5% year to date, underperforming the Zacks Electric Power industry’s rise of 20.5% over the same period. The Zacks analyst believes that Dominion Energy is benefiting from regulated organic growth projects and acquisition synergies.
Strong long-term capital expenditure plan of $26 billion for expansion of electric transmission and distribution, along with addition of renewable assets, natural gas facilities and midstream assets are the major positives. The company’s merger with SCANA, which proved to be accretive to Dominion’s earnings, will continue to boost long-term performance. Contribution from Southeast Energy and Power Delivery businesses is also leading to strong performance of the company.
However, Dominion Energy’s future earnings may be largely affected by share dilution. Ongoing delay in the Atlantic Coast Pipeline project may impact Dominion Energy’s profitability.
Other noteworthy reports we are featuring today include TOTAL (TOT), Marathon Petroleum (MPC) and Cintas (CTAS).
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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
While the successful integration of Andeavor's operations bode well for Marathon Petroleum, the Zacks analyst is worried over the projected plant turnaround costs in the third quarter.
While Dow faces a challenging demand environment in certain markets including agriculture and automotive, it should gain from cost synergy savings and productivity initiatives, per the Zacks analyst.
Per the Zacks analyst, label expansion of Jakafi fuels growth for Incyte.
The Zacks analyst is optimistic about the carrier's steady growth in traffic. However, increase in non-fuel unit costs, primarily due to steep labor costs is concerning.
Vornado's focus to redeploy asset-sale proceeds for funding buyouts and redevelopment projects will enhance portfolio quality.
Per the Zacks analyst, Juniper continues to mitigate the impact of incremental China tariffs by optimizing its supply chain.
According to the Zacks analyst, Jabil's top-line growth is benefiting from new contract wins in healthcare, automotive, cloud and 5G.
Per the Zacks analyst, impressive traction of Cintas' Uniform Rental & Facility Services segment, supported by improved product offerings should drive its sales. High operating costs remain concerns.
Per the Zacks Analyst, increased contract wins from the Pentagon and other U.S. allies bolsters Teledyne's backlog.
Per the Zacks Analyst, growing demand in propulsion market boosts Aerojet Rocketdyne's growth. Also, it has been taking strategic cost reduction initiatives to serve customers more efficiently.
Per the Zacks analyst TOTAL's sizeable production come from Africa, socio-political issues in this region could affect its operations. Fluctuation in commodity prices can impact profitability.
Per the Zacks analyst, Palo Alto is facing stiff competition from the likes of Fortinet and Cisco. Moreover, continued acquisitions and heavy investments are hurting the company's margins.
The Zacks analyst thinks softening U.S. steel prices will be a drag on Nucor's profitability. The company's Raw Materials segment also faces challenges from weak performance of its DRI businesses.
TOTAL S.A. (TOT): Free Stock Analysis Report
Netflix, Inc. (NFLX): Free Stock Analysis Report
Marathon Petroleum Corporation (MPC): Free Stock Analysis Report
Dominion Energy Inc. (D): Free Stock Analysis Report
Cintas Corporation (CTAS): Free Stock Analysis Report
Charter Communications, Inc. (CHTR): Free Stock Analysis Report
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