Top Research Reports for Today: V, RDS.A, HSBC & More
Tuesday May 9, 2017
Today's Research Daily features new research reports on 16 major stocks, including Visa (V), Shell (RDS.A) and HSBC (HSBC).
Buy-rated Visa shares have outperformed the Zacks Financial Services Transaction sector over the last year (up +16.1% vs. +14.7%) but is behind rival Mastercard (up +19.4%). Visa’s earnings beat expectations and also increased year over year. Results were driven by the acquisition of Visa Europe and solid growth in payments volume as well as processed transactions.
The Zacks analyst likes the company’s strategic acquisitions and alliances, technology upgrades and effective marketing efforts. In addition, global economic uncertainty and legal headwinds are major concerns. Higher client incentives also pose a risk on profitability. (You can read the full research report on Visa here.)
Shell shares have outperformed the Zacks Integrated Oil industry over the past six months (up +6.5% vs. +2.6% gain for the industry) as well as its smaller rival BP (up +4.4%). The integrated behemoth's upstream unit swung to a Q1 profit from a year-ago loss thanks to steady oil price recovery during the period and production contribution of BG assets.
The Hague-based supermajor was also able to reduce operating costs and progress on its large divestment program. Importantly, the Anglo-Dutch company generated a surge in cash flows, allowing it to cut debt and cover its cash dividend. However, with oil falling below the psychologically-critical $50 threshold again,
Shell's near-to-medium term revenue outlook remains cloudy. Hence, the Zacks analyst thinks investors should wait for a better entry point before buying shares in Europe's largest oil company. (You can read the full research report on Shell here.)
HSBC shares underperformed the Zacks-categorized Foreign Banks industry over the least six months, gaining +9.1% vs +14.5%. Further, the bank’s first-quarter 2017 net income declined, reflecting absence of Brazil business results. A dismal European economy and weak loan demand are expected to lead to muted revenue growth in the quarters ahead.
The Zacks analyst likes its extensive global network, strong capital position and a solid asset growth. Moreover, continued disposal of unprofitable/non-core operations has enhanced its efficiency, as operating costs remain manageable. Further, the company remains on track to achieve its 2017 cost savings target. (You can read the full research report on HSBC here.)
Other noteworthy reports we are featuring today include Sysco (SYY), Kellogg (K) and Consolidated Edison (ED).
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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
Visa (V) Beats on Q2 Earnings & Revenues on Volume Growthc
Royal Dutch Shell's (RDS.A) Q1 Earnings Soar
HSBC's (HSBC) Streamlining Plans to Aid Growth, Revenue Woes Linger
Featured Reports
Consolidated Edison (ED) Tops Q1 Earnings, Keeps '17 View
The Zacks analyst thinks Consolidated Edison's solid investment strategy led to its better-than-expected Q1 results. Yet, its reaffirmed guidance reflects no major upside in bottom-line growth.
Ventas' (VTR) FFO Tops Estimate in Q1; Rate Hike Woes Remain
The covering analyst thinks Ventas' better-than-expected Q1 results reflect decent growth in net operating income. However, rate hike and intense competition remain concerns.
Vale S.A. (VALE) Misses Q1 Earnings on Iron-Ore Price Slump
Further fall in iron-prices would offset the benefits from Vale's productivity enhancement programs in the quarters ahead.
American Airlines (AAL) Beats on Q1 Earnings and Revenues
The Zacks analyst is pleased by the Q1 outperformance. Efforts to modernize its fleet and reward shareholders are also encouraging.
Digital Realty (DLR) Q1 FFO Beats, Forex Exposure a Drag
The covering analyst thinks Digital Realty's solid performance in Q1 looks encouraging. Accretive acquisitions and development efforts augur well.
Newmont (NEM) Swings to profit in Q1, Earnings Top
The Zacks analyst thinks Newmont should gain from project advancements and actions to reduce debt and improve efficiency amid a volatile pricing environment.
BioMarin (BMRN) Vimizim and Kuvan Drugs Enjoy Strong Demand
The covering analyst informs that both Vimizim and Kuvan continue to do well, backed by strong underlying patient demand trend
New Upgrades
Zoetis (ZTS) Reports Strong Q1 Driven by Simparica, Apoquel
Zoetis reported strong results for the first quarter. Per the Zacks analyst, growth will be driven by sales of companion animal products such as Simparica, Apoquel and Cytopoint.
Sysco (SYY) Beats Q3 Earnings on Acquisitions & Margins
Sysco reported upbeat third-quarter fiscal 2017 sales, while earnings were in-line. The covering analyst believes the acquisition of Brakes Group and margin improvement drove the results.
Telephone & Data Systems (TDS) Tops Q1 Earnings and Revenues
The Zacks analyst thinks Telephone & Data Systems' business expansion in the managed hosting and cloud service market might have driven outperformance. The company's IPTV is also doing considerably
New Downgrades
CF Industries (CF) Q1 Earnings Miss, Faces Pricing Woes
CF Industries faces headwinds from low nitrogen fertilizer pricing and weak agriculture market conditions, which will continue to hurt its earnings moving forward, per the Zacks analyst.
Kellogg (K) Tops Q1 Earnings, Weak Sales Raise Concern
Kellogg beat earnings expectations in Q1. The covering analyst believes cost savings are supporting margin expansion, but a weak top line is limiting its ability to leverage it.
Avon Products (AVP) Reports Wider-than-Expected Loss in Q1
The Zacks analyst thinks Avon posted a loss in Q1 due to lower Active Representatives, tough consumer scenario and higher bad debt costs. Also, the company expects the second quarter to be tough.
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Visa Inc. (V): Free Stock Analysis Report
Sysco Corporation (SYY): Free Stock Analysis Report
Royal Dutch Shell PLC (RDS.A): Free Stock Analysis Report
Kellogg Company (K): Free Stock Analysis Report
HSBC Holdings PLC (HSBC): Free Stock Analysis Report
Consolidated Edison Inc (ED): Free Stock Analysis Report
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