Monday's Top Research Reports: DIS, VZ, CVX & More
Monday, February 27 2017
Today's Research Daily features new research reports on 16 major stocks, including Disney (DIS), Verizon (VZ) and Chevron (CVX).
Disney's shares have outperformed the Zacks Media Conglomerates sector over the past three months, gaining 11.4% vs. 9.3%, driven by the blockbuster performance of its movies. The company reported better-than-expected earnings in first-quarter fiscal 2017 but revenues missed expectations for the second straight quarter.
The Zacks analyst likes Disney's movie business and the parks & resorts division. But over the last few quarters, Disney has been weighed down by concerns about ESPN whose future growth has been clouded by the evolving media landscape as a result of 'cord cutting' and the steady migration of subscribers to online and digital platforms. Identical to performances in the past few quarters, ESPN has disappointed in the first quarter again. (You can read the full research report on Disney here.)
Verizon shares have been laggards over the past year- the stock is down -0.3% over the past 12 months vs. AT&T's +14.6% gain and the +21.6% gain for the S&P 500 index. Verizon has revised its deal to acquire Yahoo’s core assets at a discount of $350 million for $4.48 billion. Verizon is set to begin 5G user trails in 11 markets in the first half of 2017. The LQD WiFi LLC buyout and ‘IoT Fast Track’ services boosts Verizon’s IoT prospects.
FCC approval for the XO Comm. buyout, license to install FiOS in Boston along with small cell densification and expansion of dark fiber hint at Verizon’s steps in the fiber space. But it will likely take a while before these actions bear fruit. In the updated research report issued today, the Zacks analyst discusses the pros & cons of investing in Verizon shares at this stage. (You can read the full research report on Verizon here.)
Shares of Chevron have gained +31.9% over the last one year, handily outperforming the Zacks Oil & Gas-International Integrated industry, which rose just +13.8% over the same time period, as well as larger rival Exxon Mobil. Adding to the bullish sentiment, the No. 2 energy company in the U.S. swung to a Q4 profit from a year-ago loss. Rebounding oil and gas prices, together with lower operating expenses helped Chevron report a quarterly profit.
Importantly, despite being free-cash-flow negative, the deficit has narrowed considerably and Chevron is hoping to be cash flow neutral this year. Anticipated production growth from its extensive footprint in the Permian Basin is another positive. Still, the Zacks analyst thinks there is limited upside potential for shares as weak downstream operations will hamper CVX’s near-term results. (You can read the full research report on Chevron here.)
Other noteworthy reports we are featuring today include Broadcom (AVGO), TJX Companies (TJX) and PNC Financial (PNC).
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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
Disney (DIS) Tops Q1 Earnings, Sales Lag; ESPN Woes Linger
Verizon (VZ) Inks Revised Deal with Yahoo, Risks Remain
Cost Cuts, Oil Bounce Lifts Chevron (CVX), Refining a Worry
Featured Reports
Broadcom (AVGO) to Sell Brocade Assets for $800M in Cash
According to the Zacks analyst, Broadcom's plan to divest of some of the Brocade's assets to ARRIS International will accelerate the acquisition process and also reduce leverage going forward.
M&T Bank's (MTB) Dividend Hike Reflects Capital Strength
The covering analyst thinks M&T Bank's ongoing capital deployment activities along with recent dividend hike indicate strong capital position.
PNC Financial (PNC) To Gain From ECN Capital's C&V Unit Deal
The Zacks analyst think PNC Financial's deal to acquire ECN Capital's US C&V business will aid profitability, going forward.
Pioneer Natural (PXD) Beats Q4 Earnings Estimates
The covering analyst believes significantly high commodity prices realizations supported Pioneer Natural's strong 4Q16 results.
Franklin (BEN) Q1 Results Show Success of Cost Control Plan
The Zacks analyst believes Franklin's efforts to control expenses will go a long way in supporting growth. However, pressure on investment management fees amid muted AUM growth is a major concern.
Sirius XM (SIRI) Q4 Earnings In Line, Revenues Top
The covering analyst appreciates the better-than-expected Q4 revenues. The company's healthy net subscriber growth is also encouraging.
Cummins (CMI) Q4 Earnings Beat Estimates, Increase Y/Y
Cummins' earnings per share increased year over year and surpassed the Estimate. According to the Zacks analyst, Cummins will benefit from innovative products & better performance in China and India.
New Upgrades
Alliant Energy (LNT) Meets Q4 Earnings, Issues '17 View
The Zacks analyst believes, positive contribution from Alliant Energy's investment in natural gas and renewable energy based power plants will help it to achieve long-term earnings goal of 5-7%.
TJX Companies (TJX) Tops Q4 Earnings, Sales on Comps Growth
The covering analyst thinks TJX Companies fourth quarter top and bottom lines exceeded estimates due to solid traffic and comps growth. However, higher wages offset margin expansion in the quarter.
Nucor (NUE) Well Placed on Acquisitions, Expansion Actions
The Zacks analyst believes that Nucor should gain from its efforts to expand its production capabilities and grow its business through strategic acquisitions as well as strong automotive demand.
New Downgrades
Lamar's (LAMR) Q4 FFO Beats, Acquisition Strains Margins
The Zacks analyst thinks despite the Q4 FFO beat, higher expenses related to continuous acquisition of outdoor advertising assets dented free cash flow and margins, hampering financial performance.
Iron Mountain (IRM) Q4 FFO Beats, Revenues Miss Estimates
The covering analyst thinks IRM's Service business revenues remain modest. High debt and stiff competition continue to be overhangs. But Strategic M&A and cost cutting should bode well for long term.
Hewlett Packard's (HPE) Weak View Dulls Near-term Prospects
The three challenges cited by Hewlett Packard, unfavorable exchange rate movements, increased commodities pricing and execution issues, make the Zacks analyst cautious about its near-term prospects.
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Verizon Communications Inc. (VZ): Free Stock Analysis Report
TJX Companies, Inc. (The) (TJX): Free Stock Analysis Report
PNC Financial Services Group, Inc. (The) (PNC): Free Stock Analysis Report
Walt Disney Company (The) (DIS): Free Stock Analysis Report
Chevron Corporation (CVX): Free Stock Analysis Report
Broadcom Limited (AVGO): Free Stock Analysis Report
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