Thursday, November 9, 2017
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), Facebook (FB) and MetLife (MET). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Apple 's shares are up +52.1% in the year-to-date period, handily outperforming the S&P 500 (up +16.2%) and the Zacks Technology sector (up +27.4%). Apple reported spectacular fourth quarter fiscal 2017 results with both top and bottom lines beating expectations.
Steady iPhone sales, spurt in Services segment and a resurgent Macs and iPad business backed the impressive results. Business in China saw massive reacceleration driven by iPhone, Services and Mac sales. In India revenues grew twofold. Plus, the company gave a very encouraging outlook for the current quarter, which includes the holiday season, given the anticipation of strong performance by its latest smartphone, iPhone X.
Going forward, the Zacks analyst thinks foray into fast-growing technologies like automobile, AI & AR/VR are long-term drivers. But the new iPhone X at $999 is quite pricey, particularly for cost sensitive markets like India. Intensifying competition from cheaper Chinese handset-makers cannot be ignored.
Shares of Buy-rated Facebook have outperformed the S&P 500 index over the last year, gaining +48.6% vs. +19.8%. Facebook reported strong third quarter 2017 results as mobile and live video efforts continue to pay off big time. Instagram remains another important revenue stream. Apart from mobile and video, the monetization opportunities of the company's other subsidiaries - Messenger, WhatsApp and Oculus - and a huge user base/higher engagement levels are expected to drive growth going forward.
Facebook is also dabbling in AR/VR and AI technologies, which bodes well for long term growth. However, the recent uproar caused by alleged use of the platform by Russian elements for interfering with the election process has put Facebook in a spot.
As a result, Facebook CEO has said that the company will make sizable investments to tighten security on the platform which along with continued investments in video, AR/VR and AI, will dent operating margins going ahead.
Buy-rated MetLife 's shares have gained +13.4% over the last three months, outperforming the Zacks Multi-Line Insurance industry, which has gained +4.9% over the same period. MetLife, Inc.'s third-quarter earnings beat the Zacks Consensus Estimate but declined year over year. The quarter witnessed volume growth and strong operational performance.
The Zacks analyst likes the company's efforts to streamline its business (over the past several years) to focus on those with potential for growth and on fixing or exiting businesses that do not create value. Its strong international operations and disciplined capital management should drive long-term growth.
Nevertheless, persistent decline in MetLife's revenues, due to lower premiums, investment income, and fees collected from Universal Life and investment type product, and other revenues for more than two years remains a concern.
Other noteworthy reports we are featuring today Cigna (CI), Zoetis (ZTS) and Southwest Airlines (LUV).
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Today's Must Read
Per the Zacks analyst, Microchip's top-line growth is primarily driven by robust demand for microcontrollers. Moreover, stringent cost control is helping in expanding margins.
Per the Zacks analyst, membership growth at the company for past several quarters has aided top line growth. Also its strong balance sheet aids investments for growth.
While Cabot's cost management and attractive Marcellus program bode well, the Zacks analyst would prefer to wait for further natural gas price recovery before recommending investors purchase shares.
The Zacks analyst is impressed by the company's efforts to reward shareholders through dividends & buybacks.
The Zacks analyst appreciates efforts to upgrade its fleet. Increased labor and fuel costs, however, raise concerns.
Per the Zacks analyst, Moody's is well positioned to benefit from acquisitions, diversifies revenues, solid liquidity position and dominant position in its industry.
Per the Zacks analyst, Sysco's international performance is likely to remain troubled by tough pricing and soft demand in the United Kingdom.
Per the Zacks analyst, Zoetis' strong companion animal business consisting of products like Apoquel and Cytopoint, new oral parasiticide, Simparica should drive further growth.
Per the Zacks analyst, International Flavors & Fragrances' new fragrance ingredients plant in China will solidify its foothold in the region. Also, the flavors facility in Egypt will be beneficial.
The Zacks analyst is impressed by the strong demand for the company's land and mobile radio (LMR) products. Efforts to reward investors and expand its software product portfolio also encourage.
Per the Zacks analyst, lacklustre performance of Nikon Corp.'s Precision Equipment business due to lower sales volume of FPD lithography systems is weighing on the company's bottom line.
Per the Zacks analyst, higher marketing investment on news app, Internet banking and insurance is hurting SINA's profitability. Moreover, intensifying competition is a concern.
Per the Zacks analyst, though Wendy's system optimization initiative will boost earnings, it will continue to result in year-over-year decline in revenues.