Top Analyst Reports for Alphabet, Berkshire Hathaway & Nike

Tuesday June 27 2017

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 Alphabet Inc (GOOGL), Berkshire Hathaway Inc. (BRK.B) and Nike Inc (NKE).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 >>>

Strong Buy rated Alphabet shares have outperformed the Zacks Internet-Services over the last one year period (the stock is up +39.2% vs. +29.2% gain for the sector) on the back of innovation and strategic acquisitions, while Android OS should continue to generate strong cash flows. Its diversification strategy is also positive, but requires significant investment and involves uncertain payback periods, particularly since these efforts are at the cutting edge of technology. Alphabet has shown good execution to date, more or less maintaining its dominant share in a competitive, fast-growing search market.

(You can read the full research report on Alphabet here >>>).

Berkshire Hathaway’s shares have gained +0.4% quarter to date, underperforming the categorized Property and Casualty industry which increased +1.6% during the same period. Berkshire Hathaway’s exposure to catastrophe losses, Buffett’s succession and huge capital expenses on account of its railroad operations remain headwinds. However, Berkshire Hathaway’s inorganic story remains impressive with strategic acquisitions. A sturdy capital level adds to the overall strength as well. Capital expenditure for 2017 is estimated to be $6.5 billion in 2017.

(You can read the full research report on Berkshire Hathaway here >>>)

Shares of Nike fell -0.4% over the last one year period, underperforming the categorized Shoes and Retail Apparel industry. The company’s top-line fell prey to stiff competition and a tough retail backdrop in the last reported quarter. Meanwhile, to counter consumer shift toward online shopping, Nike unveiled a new company alignment – the Consumer Direct Offense. Driven by its Triple Double strategy, this restructuring plan focuses on using digital methods for rapid innovation and product development, along with strengthening consumer relations by operating through core regions. These regions include 12 key cities which are expected to account for over 80% of Nike’s previously forecasted growth, till 2020.

(You can read the full research report on Nike here >>>)

Other noteworthy reports we are featuring today include McDonald's Corporation (MCD), E I Du Pont De Nemours And Co (DD) and GlaxoSmithKline plc (GSK).

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Brian Hamilton

Research Investment Coordinator  

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

Alphabet (GOOGL) Well Poised on AI-based Jobs Search Engine

Berkshire Hathaway's (BRK.B) Buyouts Impress; Expenses Hurt

Consumer Direct Offense Plan to Fuel Growth at Nike (NKE)

Featured Reports

Buyout of E-Plus Boosts Telefonica (TEF), Competition Rife

Per the Zacks analyst, the acquisition of E-Plus and other business strategies boosts Telefonica's growth prospects.

Glaxo's (GSK) New Drugs Doing Well, Advair to Face Generics

The Zacks analyst expects Glaxo's new products to continue performing well. However, top-selling drug Advair is expected to face generic competition in the U.S soon which can hurt sales.

BofA's (BAC) Lower NIM Stress to Offset Mortgage Fee Concern

Per the Zacks Analyst, the gradual ease in BofA's margin pressure with rising rates and loan demand will likely aid top-line growth, lessening risks related to mortgage fee growth concerns.

TE Connectivity (TEL) Poised on Solid End Markets, Buyouts

Per the analyst, solid harsh environment applications sales will continue to drive TEL Connectivity's margins. Also, the recent Creganna & Intercontec buyouts bode well for its Industrial segment.

Solid Budget, Jet Sales Growth to Aid General Dynamics (GD)

Per the Zacks analyst, fiscal 2017 budget's focus on funding for submarines will boost General Dynamics' growth. Jet sales growth at the Gulfstream business also bolsters its revenue expansion.

Coal & Intermodal Units, Cost Cuts Buoy Norfolk (NSC)

The covering analyst is impressed by the strength of the company's intermodal unit.

Varian (VAR) Rides on Oncology and Proton therapy Businesses

The Zacks analyst is bullish on Varian's strong presence in Oncology and Proton therapy space. Also focus on emerging markets would aid growth.

New Upgrades

McDonald's (MCD) Poised on Traffic-boosting Initiatives

The Zacks analyst remains upbeat about McDonald's efforts to boost traffic through digital enhancements, focus on delivery and accelerated deployment of Experience of the Future restaurants in the U.S

DuPont (DD) Well Placed on Operating Cost Cuts, Dow Merger

The Zacks analyst feels that DuPont's actions to cut operational costs should continue to lend support to its earnings. The mega-merger with Dow Chemical should also create significant synergies.

Coca-Cola (KO) Well Poised on $3.8 Billion Cost Saving Plan

Per the Zacks analyst, Coca-Cola's $3.8 billion cost-saving plan covering optimization of global supply chain, enhanced global marketing and innovation, and operating expense leverage will fuel growth

New Downgrades

Excessive North American Exposure to Hurt Baker Hughes (BHI)

Baker Hughes has huge exposure to the North American market from where it generates majority of its sales. Any disruption in the continent will affect its financials, according to the Zacks analyst.

Falling Used Trucks' Price to Threaten PACCAR's (PCAR) Sales

Per the Zacks analyst, the declining price of used trucks, primarily due to higher supply, is adversely affecting the sales of PACCAR.

Eli Lilly (LLY) Generic Pressure & Alimta Concerns to Hurt

The Zacks analyst believes that Lilly's sales will continue to remain under pressure due to loss of exclusivity for many drugs. Key cancer drug Alimta will continue to be impacted by competition.

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