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.

You can see all of today’s research reports here >>>

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.

(You can read the full research report on Netflix here >>>)

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.

(You can read the full research report on Charter Communications here >>>).

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.

 (You can read the full research report on Dominion Energy here >>>).

Other noteworthy reports we are featuring today include TOTAL (TOT), Marathon Petroleum (MPC) and Cintas (CTAS).

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Mark Vickery
Senior Editor

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

Rising Costs, Competition Hurts Netflix's (NFLX) Prospects

Subscriber Gain, Wireless Initiatives Benefit Charter (CHTR)

Dominion (D) Gains from Investment, Share Dilution a Concern

Featured Reports

Andeavor Buy Boosts Marathon (MPC), Turnaround Cost Hurts

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.

Cost & Productivity Actions Aid Dow (DOW) Amid Demand Woes

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.

Jakafi Fuels Incyte (INCY), Pipeline Setbacks A Concern

Per the Zacks analyst, label expansion of Jakafi fuels growth for Incyte.

Impressive Traffic Buoys Ryanair (RYAAY) Amid Cost Woes

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 (VNO) Poised for Growth on Portfolio-Revamp Efforts

Vornado's focus to redeploy asset-sale proceeds for funding buyouts and redevelopment projects will enhance portfolio quality.

Supply Chain Optimization & Cost Control Aid Juniper (JNPR)

Per the Zacks analyst, Juniper continues to mitigate the impact of incremental China tariffs by optimizing its supply chain.

New Award Wins, End-Market Diversification Aids Jabil (JBL)

According to the Zacks analyst, Jabil's top-line growth is benefiting from new contract wins in healthcare, automotive, cloud and 5G.

New Upgrades

Cintas (CTAS) Rides On New Product Offerings, High Costs Ail

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.

Solid Backlog, Rising Growth Prospects Aids Teledyne (TDY)

Per the Zacks Analyst, increased contract wins from the Pentagon and other U.S. allies bolsters Teledyne's backlog.

Rising demand, Cost Reduction Aids Aerojet Rocketdyne (AJRD)

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.

New Downgrades

Geo-Political Risks, Uneven Commodity Prices Ail TOTAL (TOT)

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.

Stiff Competition, Contracting Margins Hurt Palo Alto (PANW)

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.

Weakening Steel Prices, Raw Materials Unit Ail Nucor (NUE)

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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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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