Monday, March 27 2017
Today's Research Daily features new research reports on 16 major stocks, including Chevron (CVX), Home Depot (HD), and Citigroup (C).
Chevron shares have gained +14% over the last one year, handily outperforming the Zacks Oil & Gas-International Integrated industry, which rose just +7% 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 sees 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.)
Shares of Home Depot have gained +10.2% over the last year, more than the Zacks Retail- Wholesale sector, which has gained +5.1% over the same period. Improving customer experience, solid execution and consistent housing market recovery helped the company post better-than-expected bottom-line results for fourth-quarter fiscal 2016, retaining its four-year long trend of beating earnings estimates.
Home Depot initiated a robust guidance for fiscal 2017 and updated its capital allocation strategy, which called for a higher long-term dividend payout target of 55% of net earnings. However, intense competition and a soft economic recovery may prove deterrents, pushing back home improvement projects. (You can read the full research report on Home Depot here.)
Buy rated Citigroup shares have gained around +38.6% year to date, outperforming the Zacks categorized Major Regional Banks industry, which has gained +28.3% over the same period. Recently, Citigroup inked two deals to exit servicing operations by the end of 2018, in a bid to increase focus on mortgage originations through the U.S. retail footprint.
The deals are expected to negatively impact first-quarter 2017 pre-tax results by about $400 million. But the Zacks analyst likes the company’s restructuring and streamlining efforts, strategic investments in core business and expense management, which should support profitability, going forward. Notably, following recent Fed interest rate hike, Citigroup increased prime lending rate to 4.00%. (You can read the full research report on Citigroup here.)
Other noteworthy reports we are featuring today include FedEx (FDX) and Starbucks (SBUX).
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Today's Must Read
Cost Cuts, Oil Bounce Lifts Chevron (CVX), Refining a Worry
Home Depot's (HD) Plans Position it for Strategic Growth
Citigroup (C) Remains on Growth Track, Raises Lending Rate
Micron's (MU) Q2 Results Backed by Improved DRAM Pricing
Micron's 2Q17 results benefitted from better pricing in the DRAM memory chip market and PC market recovery. The Zacks analyst expects these factors to aid results going ahead as well.
FedEx (FDX) Q3 Earnings Miss, Strong Q4 Anticipated
The covering analyst is pleased with the revenue beat and expectations of strong fourth quarter.
Medtronic (MDT) Grows Strong on Approvals Amid Several Woes
The Zacks analyst is positive about Medtronic's current spree of gaining regulatory approvals for less invasive devices. However, its currency woe and poor margins continue to be our major concerns.
Yahoo (YHOO) to Gain from Core Business Sale & Asian Assets
The covering analyst believes that besides Yahoo's core business sale, its Asian assets, mobile-first strategy and content additions are the main positives.
Starbucks (SBUX) Initiatives Impress, Macro Woes Stay
Although Starbucks' successful innovations, solid loyalty program and digital offerings are expected to improve bottom line, macro-related issues raise concern, per the Zacks analyst.
Walgreens' (WBA) Growth Continues; Rite Aid Pact Delay Woes
The covering analyst thinks Walgreens will do well in Q2 on solid fundamental, inorganic growth.
PVH Corp. (PVH) Tops Q4 Earnings, Currency Remains a Hurdle
The Zacks analyst thinks PVH's solid fourth quarter reflects continued strength in its premium brands despite a tough retail scenario. However, currency played foul and will continue to hurt results
Permian Basin to Drive Concho Resources (CXO) Growth
Concho Resources' large acreage position in the prolific Permian Basin and its competitive cost structure has made the Zacks analyst turn bullish on the E&P company.
Regions Financial (RF) to Benefit from Rise in Lending Rate
The covering analyst thinks margins will improve for Regions Financial following the increase in its prime lending rate to 4%. Also, its inorganic growth strategies provides a boost to its prospects.
People's United (PBCT) Depict Growth; Capital Base Solid
The Zacks analyst thinks People;s United opportunistic acquisitions and continuing gains from loans and deposits will support its long-term growth. Further, strong capital base is a favorable factor.
United Parcel's (UPS) High Costs, Forex Woes Raise Concerns
The Zacks analyst expects the company's Q1 results to be affected by the higher package delivery costs in the recent holiday season. Moreover, foreign exchange-related headwinds might hurt results.
Dominion's (D) Nuclear Operations, Delay to End Projects Major Woes
The covering analyst thinks Dominion's dependence on third parties for natural gas supply and timely completion of its several large infrastructure projects within budget and time are headwinds.
Bayer's (BAYRY) Pharma Unit Strong; Generics Hurts Sales
Bayer's Life Science businesses continues to perform well, particularly the Pharmaceuticals segment. However, generic threats for many of its products might affect top-line, believes the Zacks analyst
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United Parcel Service, Inc. (UPS): Free Stock Analysis Report
Starbucks Corporation (SBUX): Free Stock Analysis Report
Home Depot, Inc. (The) (HD): Free Stock Analysis Report
FedEx Corporation (FDX): Free Stock Analysis Report
Chevron Corporation (CVX): Free Stock Analysis Report
Citigroup Inc. (C): Free Stock Analysis Report
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