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Top Analyst Reports for Facebook, American Tower & Southern Company

Mark Vickery
Top Analyst Reports for Facebook, American Tower & Southern Company

Wednesday, March 27, 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 Facebook (FB), American Tower (AMT) and Southern Company (SO). 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-ranked Facebook’s shares have gained +27.7% year to date, outperforming the S&P 500’s increase of +12.6% during the same period. The Zacks analyst thinks Facebook will benefit from mobile ad revenues driven by robust performance of Instagram Stories and an expanding user base in 2019.

Further, the company’s plan to introduce commerce in Instagram is estimated to be a major growth driver. The growing appeal of the company’s Workplace platform, which has now more than two million paid users, is another key catalyst.

Additionally, its plan to integrate messaging apps WhatsApp, Instagram, and Messenger – will boost user experience by making the services more secure through end-to-end encryption. The company’s initiatives to curb the "fake news" menace and data breaches are other positives. However, continued mix shift toward Stories is expected to hurt ARPU. Increasing regulatory headwinds is also a concern.

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

Shares of American Tower have outperformed the Zacks REIT and Equity Trust industry in the past three months (+23.2% vs. +16.3%). In fourth-quarter 2018, the company posted better-than-expected results backed by revenue growth. The Zacks analyst thinks increased use of mobile data is fueling demand for space on the company’s telecom towers.

This enabled American Tower to experience splendid leasing activity and organic tenant billings growth in the recently-reported quarter. With higher investments in 4G and the upcoming 5G technology, wireless carriers will raise the density of their networks. Hence, the company is strengthening its portfolio and focusing on innovation to capture underlying opportunities.

Further, efforts to increase shareholder value through dividend hike and stock repurchases bode well. Yet, it has a substantially leveraged balance sheet. Also, the accelerated Indian carrier consolidation-driven churn and high customer concentration remain risks.

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

Buy-ranked Southern Company's shares have outperformed the Zacks Electric Power industry over the past six months, gaining +19.7% vs +13.2%. Following the U.S. federal government's approval of $3.7 billion in loan guarantees for the Vogtle nuclear plant in Georgia, Southern Company retains its Buy rating.

The Zacks analyst thinks that it will provide substantial support and encouragement in the completion of the troubled nuclear project and will also help to reduce financing costs. Southern Company is one of the largest and best-managed electric utilities in the U.S., dominating the power business across the southeastern region.

With good rate base growth and constructive regulation, it is expected to generate steady earnings and dividend growth in the coming years through long-term power contracts. Additionally, the utility's $12 billion AGL buy has significantly increased its customer base and diversified its offerings. Sporting a low beta – translating into less volatility – and a reasonable valuation, Southern Company is seen as an attractive investment.

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

Other noteworthy reports we are featuring today include Intuitive Discover Financial (DFS), Synchrony Financial (SYF) and Cintas (CTAS).

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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

Expanding User Base, Instagram Strength Aids Facebook (FB)

Steady Demand Buoys American Tower (AMT), Debt Woes Linger

Southern (SO) Buoyed by Federal Loan Guarantee for Vogtle

Featured Reports

Strategic Initiatives Aid Synchrony (SYF), High Costs Hurt

Per the Zacks analyst, its strategic initiatives like the buyouts of Loop Commerce and PayPal Credit financing program has led to significant growth. However, escalating expenses remain a concern.

Uniform Rental & Facility Services to Drive Cintas (CTAS)

Per the Zacks analyst, impressive traction of Cintas' Uniform Rental & Facility Services segment, fueled by increasing penetration levels at existing customers should continue to drive its revenues.

Magna (MGA) Rides on Innovations & New Launches Amid Tariffs

Per the Zacks analyst, with rising demand for crossover & SUVs, Magna is focusing more on innovation & new launches. But high tariffs on steel and aluminum are hitting its profitability.

LATAM Airlines (LTM) Aided by Cost Cuts & Passenger Revenues

The Zacks analyst appreciates passenger revenue growth at LATAM Airlines. The company's efforts to check costs are encouraging too.

Rising Jet Demand, Air Traffic Growth Aid Embraer (ERJ)

Per the Zacks analyst, Embraer continues to witness rising demand for its E-jets worldwide.

Intercept's (ICPT) Ocaliva Picks Up But Dependence A Concern

Per the Zacks analyst, Intercept's lead drug, Ocaliva has gained traction following management's efforts to increase awareness about the label update.

Neogen (NEOG) Rides on Solid Food Safety Arm Amid Forex Woes

Per the Zacks analyst, Neogen's Food Safety arm is gaining from solid demand for the foodborne pathogen detection test like Listeria.

New Upgrades

Rising Top-line, High Card Sales Aid Discover Financial (DFS)

Per the Zacks analyst, its growing revenues driven by higher net interest income and other total income along with soaring card sales volume has led to significant growth.

Acquisitions to Continue Boosting Smucker's (SJM) Top Line

Per the Zacks analyst, Smucker's top line is likely to continue benefitting from acquisition gains. Evidently, the Ainsworth buyout contributed $199.2 million to net sales during the third quarter.

Strategic Buyouts Boost United Rentals' (URI) Prospects

The Zacks analyst stresses that United Rentals' systematic inorganic strategy will expand its core equipment rental business and trench, power and pump footprint and tool offerings.

New Downgrades

Republic Services (RSG) Grapples With Weak Landfill Pricing

The Zacks analyst believes that weak landfill pricing due to high cost of landfills and leachate can limit Republic Services' ability to increase prices, thereby weighing on its margins and earnings.

Higher Input Costs, Weak Demand Ail Eastman Chemical (EMN)

According to the Zacks analyst, Eastman Chemical faces headwinds from raw material cost inflation. Also, weak demand for its specialty products in China remains a concern.

Single Supplier for Captisol a Concern for Ligand (LGND)

Per the Zacks analyst, Ligand's dependence on a single supplier for its major revenue generating technology, Captisol, is a concern as any supply interruption will adversely effect Ligand's results.

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Synchrony Financial (SYF) : Free Stock Analysis Report
Southern Company (The) (SO) : Free Stock Analysis Report
Facebook, Inc. (FB) : Free Stock Analysis Report
Discover Financial Services (DFS) : Free Stock Analysis Report
Cintas Corporation (CTAS) : Free Stock Analysis Report
American Tower Corporation (REIT) (AMT) : Free Stock Analysis Report
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