Friday, January 10, 2020
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 Chevron (CVX), Accenture (ACN) and Adobe Systems (ADBE). 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 >>>
Chevron’s shares have outperformed the Zacks Integrated Oil industry over the past year (+4.4% vs. -3.7%) and the analyst believes that the outperformance should continue on the back of a project pipeline that is among the best in the industry, thanks to planned expansion in the lucrative Permian Basin.
Chevron’s well economics in the West Texas shale play also continues to improve as the company has been able to achieve a 40% reduction in its development and production expenses since 2015. However, the continued drop in Chevron's downstream unit earnings (partly attributable to a fall in domestic refined products sales margins) is a concern.
Moreover, the energy supermajor’s massive $10-$11 billion impairment charge is expected to increase its gearing. Hence, investors are advised to wait for a better entry point.
(You can read the full research report on Chevron here >>>)
Shares of Accenture have gained +11.4% in the past three months against the Zacks Consulting industry's rise of +10.6%. The Zacks analyst believes that Accenture has been steadily gaining traction in its outsourcing and consulting businesses.
The company has been strategically enhancing its cloud and digital marketing suite through acquisitions and partnerships. The company’s strong operating cash flow has helped it reward its shareholders in the form of dividends and share repurchases, and pursue opportunities in areas that show true potential. Accenture is currently a global leader in the Salesforce implementation service space.
However, Accenture continues to face pricing pressure due to significant competition from strong companies like Genpact, Cognizant and Infosys. Global presence exposes Accenture to foreign currency exchange rate fluctuations. Buyout-related integration risks is a concern.
(You can read the full research report on Accenture here >>>)
Adobe's shares have gained +11% over the past six months against the Zacks Software industry's rise of +9.3%. The Zacks analyst remains optimistic about Adobe’s market position, compelling product lines, continued innovation, solid adoption of Creative Cloud and Adobe marketing cloud.
Adobe is driven by increasing demand for its creative products. Also, the company’s Adobe Document Cloud and Adobe Experience Cloud products, along with growing subscription for cloud application are positives. It has been making great efforts toward establishing presence in cloud-related software areas such as documents and marketing.
However, lower end-market demand and exposure to Europe remain overhangs. High acquisition expenses do not bode well for its margin expansion.
(You can read the full research report on Adobe here >>>)
Other noteworthy reports we are featuring today include Charter Communications (CHTR), Gilead Sciences (GILD) and Honda Motor (HMC).
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Director of Research
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
Chevron (CVX) to Gain from Stellar Permian Operation
Accenture (ACN) to Gain from Symantec Cyber Security Buyout
Adobe (ADBE) Rides on Creative Strength; Expenses A Concern
Subscriber Gain Aids Charter (CHTR) Amid Stiff Competition
Per the Zacks analyst, subscriber growth in spectrum mobile products is benefiting Charter's growth amid rising competition from other streaming service providers in the video market.
HIV Business Fuel Gilead (GILD), Pipeline Setbacks A Concern
Per the Zacks analyst, Gilead's HIV franchise maintains momentum on new approvals as HCV business dwindles.
Focus on Electric Cars to Fuel Honda (HMC) Amid Cost Woes
While Honda's emphasis on developing electric and driverless cars bode well for its future prospects, high SG&A costs and frequent safety recalls remain a concern, per the Zacks analyst.
Solid Balance Sheet, Revenue Growth Aid MetLife (MET)
Per the Zacks analyst, the company's revenues have been increasing from sales growth, rise in premium ; its strong capital position enables investment for long term growth.
Retail USA Growth Aids Walgreens (WBA), McKesson Deal a Plus
The Zacks analyst is bullish about Walgreens witnessing prescription growth in Retail Pharmacy USA.
Strength in Categories Drive Ross Stores (ROST) Sturdy Comps
Per the Zacks analysts, Ross Stores witnesses robust comps driven by strength across categories, except ladies apparel.
Andeavor Buy Boosts Marathon (MPC), Product Cost Hurts
While the successful integration of Andeavor's operations bode well for Marathon Petroleum, the Zacks analyst is worried over lower refining profitability due to upswing in product costs.
Assets Balance, Global Reach Support SEI Investments (SEIC)
Per the Zacks analyst, SEI Investments' solid assets balance, diversified product offerings, global footprint and rising demand for SEI Wealth Platform will continue to aid the financials.
Strength in Service & Custodial Units Aid HealthEquity (HQY)
HealthEquity has been gaining ground on solid prospects of its Service and Custodial arms. The Zacks Analyst is also bullish about a raised guidance for fiscal 2020.
Solid Poultry Products to Fuel Sanderson Farms (SAFM) Sales
Per the Zacks analyst, Sanderson Farms is likely to keep gaining from strength in poultry products.
Network Upgrade Costs, Promo Offers Erode Sprint (S) Margins
Per the Zacks analyst, high costs for expanded network coverage & capacity improvements, along with promotional offers to lure customers from rival carriers have led to high cash burn rate for Sprint.
Delivery Delays of B737 MAX Jets Weigh on Ryanair (RYAAY)
Per the Zacks analyst, delivery delays of the Boeing 737 MAX aircraft, due to the groundings, are affecting Ryanair's growth plans. The below-par performance the Laudamotion unit is also worrisome.
InterDigital (IDCC) Plagued by Margin Woes, Firm Competition
Per the Zacks analyst, InterDigital is plagued by spiraling operating costs with continuous R&D efforts in order to fend off stiff competition as the industry battles various trade restrictions.
Honda Motor Co., Ltd. (HMC) : Free Stock Analysis Report
Gilead Sciences, Inc. (GILD) : Free Stock Analysis Report
Chevron Corporation (CVX) : Free Stock Analysis Report
Charter Communications, Inc. (CHTR) : Free Stock Analysis Report
Adobe Systems Incorporated (ADBE) : Free Stock Analysis Report
Accenture PLC (ACN) : Free Stock Analysis Report
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