Monday, October 23, 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 American Express (AXP), Verizon (VZ) and eBay (EBAY). 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 >>>
Buy-rated American Express’ shares are up +39.5% over the last year, outperforming the Zacks Financial Miscellaneous Services industry, which has gained +29.9% over the same period. Its third-quarter earnings beat expectations and improved year over year.
Better-than-expected results were mainly backed by an increase in net interest income, higher Card spending at a lower tax rate and the effect of share buyback. The company continues to witness strong loan growth and credit metrics, plus lower operating costs.
The Zacks analyst likes its solid market position, strength in card business and significant opportunities from the secular shift toward electronic payments are growth drivers. Strategic initiatives focusing on the platinum card portfolio and the OptBlue program will drive business volume.
Cost reduction and return of significant capital to shareholders through dividend and share buyback are also positives. However, an increase in provision for losses, high rewards expense and cost of card member services are the other headwinds.
(You can read the full research report on American Express here >>>).
Shares of Verizon have lagged recently -- the stock is down -2.6% year to date vs. AT&T's -12.2% decline and the +17% gain for the S&P 500 index. Verizon posted mixed third-quarter 2017 financial results, with net gain of 603,000 postpaid and 139,000 prepaid wireless customers.
The Zacks analyst thinks these user additions came on the back of Verizon’s unlimited data plans. Verizon is teaming up with Amazon to deliver virtual network services at a global scale. The company’s 5G wireless network trials and deployment plans complements its 5G wireless expansion strategies.
Verizon plans to merge its Go90 content into its other digital platforms and is on track to boost its fiber suite through different deals. However, Verizon operates in a highly competitive and saturated wireless market.
Loss in wireline access lines, marketing costs of promotional plans, competitive video market are other major risks. Delay in OTT services' launch is a major drawback.
(You can read the full research report on Verizon here >>>).
eBay’s shares have underperformed the Zacks Internet Commerce industry in the year to date period (+26.7% vs. +50.7%). The company’s third-quarter 2017 earnings matched expectations while revenues beat the same. The Zacks analyst likes several initiatives taken by eBay, including building a solid foundation of structured data and artificial intelligence (AI), customer-to-customer (C2C) business and enhancing mobile experience.
While the separation from PayPal led to the loss of a good growth engine, eBay is well positioned for growth based on the aforesaid factors. However, weak global economy, slow e-commerce growth and stiff competition remain overhangs.
(You can read the full research report on eBay here >>>).
Other noteworthy reports we are featuring today include KeyCorp (KEY), Synchrony Financial (SYF) and SAP (SAP).
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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
Higher Card Spending, Lower Costs Aid American Express (AXP)
Postpaid, Prepaid Wireless Subscriber Gain Lifts Verizon (VZ)
eBay (EBAY) Marketplace to Benefit from Shopify Partnership
Prudent Buyouts Amid Recovering Demand Buoy SL Green (SLG)
The Zacks analyst is impressed by SL Green's strategy to acquire trophy assets in high-growth areas which have been enjoying solid demand for office space on the back of recovering labor markets.
Strong Cloud and Software Business to Aid SAP SE (SAP)
Per the Zacks analyst, impressive performance of SAP's Cloud and Software business, fueled by a rise in cloud subscriptions and support-revenue rise, will continue to lend momentum to the company.
Dover (DOV) Gains on Bookings Growth, Input Costs a Concern
Per the Zacks analyst, strong bookings growth and rig count additions will aid Dover. But high raw material costs at Engineered Systems and Refrigeration & Food Equipment segments will mar results.
Dividends & Buybacks Buoy GATX Corp.(GATX), High Costs Ail
The Zacks analyst is impressed by the company's efforts to reward shareholders through dividends & buybacks.
Synchrony Financial's (SYF) Interest Income Aids, Costs Hurt
Per the Zacks analyst, although Synchrony Financial's top line continues to grow on interest income, its rising level of expenses severely weighs on the bottom line.
Skechers (SKX) Robust International Business to Drive Sales
Per the Zacks analyst, Skechers' international business remains a major sales growth driver, apart from product innovation and inventory management.
Rising Rates, Loan Growth Support KeyCorp's (KEY) Revenues
Per the Zacks analyst, loan and deposit growth, higher interest rates and inorganic expansion strategy should support KeyCorp's revenues.
Maxim (MXIM) Draws Strength from Auto & Industrial Segments
With Maxim delivering strong Q1 results, the Zacks analyst believes that strong growth in auto, industrial markets and diversification strategy will continue to aid growth going forward
SO.F.TER. & Nilit Buyouts, Cost Cuts Drive Celanese (CE)
The Zacks analyst thinks that operational cost savings through productivity actions as well as SO.F.TER. and Nilit acquisitions should help Celanese achieve its earnings growth target for 2017.
MGIC Investment (MTG) Grows on Higher New Insurance Written
Per the Zacks analyst, MGIC Investment remains well poised to deliver improved earnings banking on higher new business, declining delinquency, lower claims payments and improving housing market.
Perrigo's (PRGO) Sales Hurt by Price Erosion in Rx Segment
Per the Zacks analysts, Perrigo's is facing competitive pressure in the RX Segment. Moreover, price erosion in the segment may hurt the company's topline in near term.
DST Systems (DST) Hurt by High Debt Burden & Competition
Per the Zacks analyst, ongoing consolidation in the U.S. financial services market, high debt burden and stiff competition from peers are likely to put DST Systems' fundamentals under pressure.
NCR Corporation (NCR) to be Hurt by Weak ATM Business
Per the Zacks analyst, weakness in ATM business due to slow transition to Windows 10 and delayed spending by customers in the U.S., India, the Middle East & Africa will affect near-term performance.
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Verizon Communications Inc. (VZ) : Free Stock Analysis Report
Synchrony Financial (SYF) : Free Stock Analysis Report
SAP SE (SAP) : Free Stock Analysis Report
KeyCorp (KEY) : Free Stock Analysis Report
eBay Inc. (EBAY) : Free Stock Analysis Report
American Express Company (AXP) : Free Stock Analysis Report
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