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Top Analyst Reports for ExxonMobil, Oracle & ADP

Mark Vickery

Friday, June 21, 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 ExxonMobil (XOM), Oracle (ORCL) and ADP (ADP). 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 >>>

ExxonMobil’s shares have outperformed the Zacks Integrated International Oil industry (+16.9% vs. +14%) over the past six months. The Zacks analyst thinks ExxonMobil has a leading position in the energy industry owing to its size and diverse asset base, both in terms of business mix and geographical footprint.

With a stable cash position, the company’s balance sheet is one of the best in the industry. This has allowed ExxonMobil to reward stockholders with a 6.2% average annual dividend hike over the past 37 years. Notably, with three fresh offshore oil discoveries in Guyana, ExxonMobil recently completed 13 key discoveries in the Stabroek Block.

However, since in Europe, demand for gas is highly seasonal, the company expects soft European gas volumes to weaken its upstream business through the April-to-June quarter of 2019. ExxonMobil also anticipates that substantial scheduled maintenance activities will adversely impact its downstream & chemical businesses in the second quarter of 2019.

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

Shares of Oracle have underperformed the Zacks Computer Software industry in the past six months, gaining +33.5% vs. +43.3%. Oracle reported stellar fourth-quarter results. Moreover, both top and bottom line increased on a year over year basis.

The Zacks analyst thinks the company is benefiting from strong adoption of its cloud-based solutions, comprising Fusion ERP and Fusion HCM, among others. Partnerships with the likes of Accenture are helping the company rapidly expand its cloud-base clientele. Also, anticipated strong demand for the next-generation autonomous database supported by machine learning will boost its competitive position against Amazon Web Services (AWS).

However, stiff competition in the cloud market from dominant players is anticipated to limit margin expansion. Further, lower hardware volumes are anticipated to hurt top-line growth consequently keeping margins under pressure. Additionally, integration risks from buyouts remain a concern.

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

ADP’s shares have gained +21.9% over the past year, outperforming the Zacks Outsourcing industry, which has gained +15% over the same period. The Zacks analyst thinks ADP continues to enjoy a dominant position in the human capital management market through strategic acquisitions. It has a strong business model, high recurring revenues, good margins, robust client retention and low capital expenditure.

The company continues to innovate, improve operations and invest in its ongoing transformation efforts. A solid balance sheet enables it to continue with its shareholder-friendly activities alongside strategic buyouts and investments on product development.

On the flip side, ADP faces significant competition in each of its product lines. Failure to remain technologically updated might reduces the demand for its solutions and services. The company is seeing increase in expenses as it continues to acquire companies and invest in transformation efforts.

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

Other noteworthy reports we are featuring today include Baxter (BAX), Northrop Grumman (NOC) and EOG Resources (EOG).

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Mark Vickery Senior Editor

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

Guyana Discoveries Aid ExxonMobil (XOM), Chemical Unit Hurts

Oracle (ORCL) Gains from Cloud Suite Adoption & Partnerships

ADP Rides on Strategic Buyouts Amid Technological Challenges

Featured Reports

Investments Aid Northrop (NOC), High Operating Expenses Hurt

Per the Zacks analyst, Northrop Grumman's regular investments in growth projects bolsters its future prospects. However, it continues to incur higher operating expenses that raises concerns.

EOG Resources (EOG) Gains on Eagle Ford, Well Expenses High

Huge inventory of premium drilling wells in the Eagle Ford shale will contribute to EOG Resources' oil production. But, escalating lease and well operating costs are a concern, per the Zacks analyst.

Renal Care Unit Aids Baxter (BAX) Amid Stiff Competition

The Zacks analyst is apprehensive about intense competition in the MedTech space.

Strong Asia Business Aids Manulife (MFC), High Debt Level Ails

Per the Zacks analyst, Manulife is poised to grow on new business growth in Asia that has been aiding operational results.

Soliris, Ultomiris Boost Alexion (ALXN) Amid Pricing Woes

Per the Zacks analyst, label expansion of Alexion's lead drug, Soliris boost sales.

Strong End-Markets Aid Xylem (XYL), Forex Woes Ail

Per the Zacks analyst, Xylem gains from solid growth opportunities in end-markets.

Product Differentiation Aids Semtech (SMTC) Amid Weak Demand

Per the Zacks analyst, Semtech is riding on the momentum in IoT, data center and mobile markets driven by its product differentiation strategy.

New Upgrades

Expanding Diagnosis & Treatment Portfolio Aids Philips (PHG)

Per the Zacks analyst, Philips continues to benefit from growing Diagnosis & Treatment business on the back of partnerships, expanding geographical coverage and innovative solutions.

Rising Assets, Cost Control Efforts Support Lazard (LAZ)

Per the Zacks analyst, Lazard's investment strategies in equity and fixed income markets might boost assets under management. Also, focus on cost savings will likely enhance its profitability.

Robust Wireless Growth Benefits Shaw Communications (SJR)

Per the Zacks analyst, Shaw Communications' Wireless business is benefiting from higher subscriber growth and an improvement in average revenue per unit (ARPU).

New Downgrades

Lower Metal Prices, Volumes to Hurt Reliance Steel (RS)

The Zacks analyst thinks that softer metal prices, especially for carbon steel, will crimp the company's margins. Lower sales volumes will also put pressure on its top line.

High Funding Costs, Low Margins to Hit Annaly's (NLY) Growth

Per the Zacks analyst, unfavorable funding dynamics and compressed spreads will likely dampen Annaly's performance and dividend distributions.

Higher Investment Costs to Hurt John Wiley's (JW.A) Earnings

Per the Zacks analyst, elevated investments for growth and optimization of Research and Education Services are likely to hurt John Wiley's earnings in fiscal 2020.

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Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
Oracle Corporation (ORCL) : Free Stock Analysis Report
Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
EOG Resources, Inc. (EOG) : Free Stock Analysis Report
Baxter International Inc. (BAX) : Free Stock Analysis Report
Automatic Data Processing, Inc. (ADP) : Free Stock Analysis Report
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