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Top Analyst Reports for Boeing, 3M & U.S. Bancorp

Mark Vickery
Boeing (BA) is seeing favorable earnings estimate revision activity and has a positive Zacks Earnings ESP heading into earnings season.

Tuesday, July 9, 2019

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 Boeing (BA), 3M (MMM) and U.S. Bancorp (USB). 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 >>>

Boeing’s shares have gained +1.2% in the past year, underperforming the Zacks Aerospace & Defense industry, which has increased +4.2% during the same time period. The Zacks analyst emphasizes that Boeing is the largest aircraft manufacturer globally in terms of revenues, orders and deliveries, and is one of the major aerospace and defense contractors.

In July 2018, Boeing and Embraer entered into a joint venture (JV) by signing a Memorandum of Understanding. The proposed partnership is expected to be accretive to Boeing's earnings at the start of 2020 and generate estimated annual pre-tax cost synergies of approximately $150 million by the third year.

However, Boeing’s commercial business has suffered a major setback lately due to lower 737 deliveries, following the company’s decision to ground these jets worldwide after two fatal crashes in the recent past. Consequently, its cash flow position was affected significantly.

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

Shares of 3M have lost -20.2% in the past three months, underperforming the Zacks Diversified Operations industry, which has gained +0.5% over the same period. The Zacks analyst thinks 3M stands to gain from efforts to innovate products, solid demand and portfolio restructuring moves in the long run.

Its acquisition of the technology business of M*Modal is likely to strengthen the Health Information Systems business in the months ahead. Also, the company's policy of rewarding shareholders handsomely through dividend payments and share buybacks works in its favor.

For 2019, the company lowered earnings projections from $10.45-$10.90 to $9.25-$9.75 per share, with organic sales expected to increase 1-2%, down from the earlier projection of 1-4%. Foreign currency translation is predicted to adversely influence sales by 1%. Also, rising costs and restructuring charges might become concerns for 3M.

(You can read the full research report on 3M here >>>).

U.S. Bancorp’s shares have outperformed the Zacks Major Banks industry over the past three months, gaining +7.4% vs. +3.1%. Further, the company possesses an impressive earnings surprise history, having beaten expectations in three of the trailing four quarters.

The Zacks analyst thinks U.S. Bancorp will likely get support from its solid business model, core franchise, lower tax rate, higher interest rates and diverse revenue streams. Also, its capital deployment activities continue to enhance shareholder value. Further, strategic acquisitions have strengthened the company's balance sheet. A rise in interest rates has also aided margins.

However, escalating expenses due to its ongoing investments in technology and likely increase in legal expenses remain concerns. Also, significant exposure to commercial loans remains a headwind for the company.

(You can read the full research report on U.S. Bancorp here >>>).

Other noteworthy reports we are featuring today include Biogen (BIIB), William Companies (WMB) and Disney (DIS).

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Mark Vickery
Senior Editor

Note: SherazMian 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

Growing Jet Demand, Strategic Acquisitions Aid Boeing (BA)

Solid Product Demand & Acquired Assets Aid 3M (MMM)

Loan Growth Supports U.S. Bancorp (USB), Higher Costs a Woe

Featured Reports

Biogen (BIIB) Rides on Alliances, Spinraza Competition Lurks

The Zacks analyst likes Biogen's efforts to in-license assets, some of which have transformative potential. However, Spinraza may soon face competition from gene therapies for spinal muscular atrophy.

New Drugs Boost Roche (RHHBY) Amid Biosimilar Competition

Per the Zacks analyst, solid performance of Ocrevus, Perjeta, Tecentriq and Hemlibra are boosting Roche.

Williams (WMB) Banks on Transco Pipeline Amid High Debt Load

While Williams' existing and expansionary projects, which are part of the Transco pipeline, will fuel revenues and cash flows, the Zacks analyst is worried about its elevated leverage of 57%

Costs Hurt Clorox's (CLX) Margins, 2020 Plan Holds Potential

Per the Zacks analyst, strained margins due to higher commodity costs and adverse currency are near-term concerns for Clorox.

Pool Corp (POOL) Gains From Base Business Amid High Expenses

Per the Zacks analyst, Pool Corp's expansion strategies and strong demand in high-end markets boost its base business.

Solid Insurance in Force Aids Radian (RDN), High Expenses Ail

Per the Zacks analyst, Radian is poised to grow on solid mortgage insurance in force, waning delinquency, low levels of paid claims and better risk-based capital ratio.

Marine Transportation Revenues Aid Kirby (KEX), Costs Ail

The Zacks analyst is impressed by substantial growth at the company's marine transportation division.

New Upgrades

Ball Corporation (BLL) Rides on Strong Demand & Acquisitions

The Zacks analyst believes investment in capacity, acquisitions and introduction of new products will help Ball Corporation capitalize on the growing global beverage can demand.

Solid End-Markets & Realignment Efforts Aid Flowserve (FLS)

Per a Zacks analyst, Flowserve gains from strengthening end-markets, including oil and gas, chemical, thermal solar, and general industries. Realignment efforts will also be beneficial.

Market Diversity & Solid Backlog Level Aid Fluor (FLR)

Fluor's strong backlog level ($39.3 billion as of Mar 31), and leading position in nuclear remediation and market diversity are fuelling its solid performance.

New Downgrades

Disney (DIS) Hurt By Rising Investments & Marketing Costs

Per the Zacks analyst, Disney's ongoing investments on its technology platform and higher marketing costs have negatively impacted profitability.

Jazz's (JAZZ) Key Drug Xyrem Set to Face Generic Competition

Per the Zacks analyst, Jazz's highest revenue generator, Xyrem, is set to face generic competition starting 2023 following the expiry of patents in the United States.

High Costs Likely to Hurt Columbia Sportswear's (COLM) Margins

Per the Zacks analyst, rising SG&A expenses stemming from investments and compensations are a hurdle for Columbia Sportswear. SG&A costs are expected to rise in 2019 and weigh on the operating margin.

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Williams Companies, Inc. (The) (WMB) : Free Stock Analysis Report
U.S. Bancorp (USB) : Free Stock Analysis Report
3M Company (MMM) : Free Stock Analysis Report
The Walt Disney Company (DIS) : Free Stock Analysis Report
Biogen Inc. (BIIB) : Free Stock Analysis Report
The Boeing Company (BA) : Free Stock Analysis Report
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