Top Research Reports for Today: MSFT, BLK, NOC

Thursday April 13, 2017

Today's Research Daily features new research reports on 16 major stocks, including Microsoft (MSFT), BlackRock (BLK) and Northrop Grumman (NOC).

Microsoft shares lagged the Zacks Tech sector through the fall, but have led the way over the last six months (up +13.6% versus +8.8%) on greater appreciation for the company's reorganization and repositioning. The Zacks analyst points to the company's continuing enterprise strength, benefits from the Office 365 subscription model, strong growth prospects of Azure and promising new products.

Further, the addition of LinkedIn will boost the company's presence in the social media market. The recently announced Dies acquisition and investment in Flipkart is also positive. All in all, the company has emerged as a leader in the cloud space that promises momentum on a number of fronts. Estimates have been stable lately ahead of the company’s fiscal Q3 earnings release. However, a strong U.S. dollar and stiff competition remain major concerns. (You can read the full research report on Microsoft here.)

Shares of BlackRock have marginally underperformed the Zacks categorized Investment Management industry over the last one year (up +7.4% vs. +7.5%). Estimates have been going up ahead of the company’s first-quarter 2017 earnings release. The Zacks analyst likes the manner in which the company has expanded globally via acquisitions and remains well positioned to capitalize on opportunistic deals, driven by its strong liquidity position.

In order to meet changing client needs, the company is restructuring its actively managed equities business. However, increased dependence on overseas revenues and regulatory restrictions can negatively affect the company’s financials. In addition, increase in regulatory compliance costs, compensation costs as well as higher marketing costs are expected to keep expenses high in the near term. (You can read the full research report on BlackRock here.)

Buy rated Northrop Grumman has gained +2.9% year-to-date, underperforming the Zacks categorized Aerospace – Defense industry, which has gained +8.7% over the same period. The Zacks analyst stresses that the company is one of the largest U.S. defense contractors and has a strong presence in Air Force, Space & Cyber Security programs. Its product innovation and focus on strengthening its ISR wing will help maintain a stable earnings stream amid the rapidly changing needs of the defense landscape.

A strong upside in foreign military sales also raises optimism. The company maintains a strong balance sheet and steady cash flow that offer substantial financial flexibility. However, challenging economic and political factors and weak sales over the past few years have been raising concern.  (You can read the full research report on Northrop Grumman here.)

Other noteworthy reports we are featuring today include NVIDIA (NVDA), Vertex (VRTX) and Illumina (ILMN).

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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

Microsoft (MSFT) Poised to Grow on Strategic Initiatives

BlackRock (BLK) Well Positioned For Growth, Cost Issues Persist

Focus on Strengthening ISR Wing Benefiting Northrop (NOC)

Featured Reports

Vertex (VRTX) Focuses on Cystic Fibrosis Combination Drugs

The Zacks analyst says that with Vertex struggling with commercialization of Orkambi in ex-U.S. markets, investor focus shifts to triple combination cystic fibrosis regimens which are crucial for grow

NuStar (NS) Inks $1.48B Deal to Expand in Permian Basin

The covering analyst thinks the acquisition of Navigator Energy Services will expand NuStar's operations into the prolific Permian Basin leading to greater margins.

American Airlines (AAL) Gains on Bullish Q4 TRASM View

Though positive on American Airlines' bullish view on unit revenues in Q1, the Zacks analyst expects the recent labor deals to hurt the company???s near-term earnings.

Nucor (NUE) Poised on Growth Actions Amid Market Headwinds

While the covering analyst thinks Nucor should gain from acquisitions and capacity expansion actions, it faces weak demand across certain key markets. The steel industry is also not out of the woods yet.

MarketAxess (MKTX) Poised For Growth, High Debt & Cost Hurts

The Zacks analyst thinks MarketAxess' strategic initiatives, solid international business and strong fundamentals should drive growth; rising costs and high level of debt continues to bother us.

Bank of the Ozarks (OZRK) Q1 Results Show Growth Potential

The covering analyst thinks Bank of the Ozarks' Q1 results reflect significant growth potential based on improving loans and deposits.

Illumina (ILMN) Hurt by Funding Issue amid Market Prospects

The Zacks analyst is apprehensive about Illumina on doubt over the fate of NIH's funding situation under Trump administration.

New Upgrades

Beacon Roofing (BECN) On Track to Grow Revenues, Margins

The Zacks analyst appreciates Beacon Roofing's focus to grow both organically and through acquisitions while improving margins. The company will also benefit from roofing and re-roofing demand.

A.O. Smith (AOS) Thrives on Robust U.S., China Demand

The covering analyst thinks A.O. Smith's growth will be driven by robust demand for water treatment and heater products, particularly in China and U.S. Also, Aquasana synergies will boost profits.

CSRA (CSRA) Continues to Grow on the Back of Partnerships

The Zacks analyst thinks that CSRA's collaborations with tech companies like Amazon and Microsoft not only help it in developing novel solutions but also bid for complex contracts.

New Downgrades

NVIDIA Corp. (NVDA) Prospects Marred by Weak PC Outlook

According to the Zacks analyst, a weak outlook for the PC industry and intensifying competition could weigh on NVIDIA's profits, amid an already challenging pricing environment.

Cheesecake Factory (CAKE) Remains Perturbed by Many Factors

The covering analyst notes that rising wages, pre-opening costs and expenses related to initiatives could weigh on Cheesecake Factory's profits further, amid an already challenging sales environment.

Level 3 Communications (LVLT) Slips to Sell Amid Competition

The Zacks analyst thinks despite operating in a competitive enterprise communications market, Level 3 Comm. has moved a step closer in its merger with CenturyLink by getting shareholders' approval.

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Vertex Pharmaceuticals Incorporated (VRTX): Free Stock Analysis Report
 
NVIDIA Corporation (NVDA): Free Stock Analysis Report
 
Northrop Grumman Corporation (NOC): Free Stock Analysis Report
 
Microsoft Corporation (MSFT): Free Stock Analysis Report
 
Illumina, Inc. (ILMN): Free Stock Analysis Report
 
BlackRock, Inc. (BLK): Free Stock Analysis Report
 
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