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Top Analyst Reports for Facebook, Mastercard & NIKE

Mark Vickery

Thursday, September 5, 2019

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features updated research reports on 16 major stocks, including Facebook (FB), Mastercard (MA) and NIKE (NKE). These research reports have been hand-picked from roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Facebook’s shares have gained 42.8% year to date, outperforming the S&P 500’s increase of 15.8% during the same period. The Zacks analyst thinks the company benefits from continued user growth across Asia-Pacific. It is expected to benefit from solid mobile ad revenues, driven by impressive growth in Instagram Stories and Feed, as well as Facebook News Feed.

Facebook’s initiatives to improve privacy, transparency and authenticity of ads and removal of fake accounts from the platform are expected to boost user trust and engagement. However, the company’s rising regulatory headwinds, including the antitrust investigation, is a concern.

Meanwhile, the EU is investigating Libra. The integration of Libra-backed applications into WhatsApp and Messenger is also being investigated. The unfriendly regulatory environment is expected to delay Libra’s launch, which is a concern for investors.

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

Shares of Mastercard have increased +51.6% year to date, outperforming the Zacks Financial Transaction Services industry’s rally of +44.2%. The Zacks analyst thinks the company's revenues are gaining from  higher switched transactions, increase in cross-border volume and gross dollar volume.

Numerous acquisitions made over the past many years have fueled its inorganic growth. The company's solid market position, ongoing expansion, investment in technology and opportunities from the shift toward electronic payments, paves path for long term growth. Its solid capital position enables investment in business.

Disciplined capital management by way of share buybacks and divided payments is commendable. However, escalating costs will put pressure on margins. Also, in order to gain customers and new business, Mastercard has been incurring high level of costs under rebates and incentives, which remains a concern.

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

NIKE’s shares have outperformed the Zacks Shoes and Retail Apparel industry year to date, gaining +16.4% vs. +15.6%. The Zacks analyst thinks the outperformance is attributable to a robust sales trend stemming from the execution of Consumer Direct Offense as well as strength in Wholesale and NIKE Direct businesses.

Fourth-quarter fiscal 2019 marked the ninth straight quarter of top-line beat for the company. Further, it expects strong sales results for fiscal 2020, driven by brand recognition, robust innovation pipeline, and positive response from Nike Direct and wholesale partners. However, NIKE’s earnings missed estimates in the fiscal fourth quarter, marking a negative surprise after 28 straight beats.

For fiscal 2020, it anticipates headwinds from higher SG&A expenses, tax rate and adverse currency to mar results. Further, the company expects gross margin gains to be partly offset by supply-chain investments and expansion of Air manufacturing innovation.

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

Other noteworthy reports we are featuring today include BB&T (BBT), Western Digital (WDC) and Phillips 66 (PSX).

It’s Illegal in 42 States, But Investors Will Make Billions Legally

In addition to the companies you read about above, today you get details on the newly-legalized industry that’s tapping into a “habit” that Americans spend an estimated $150 billion on every year.

That’s twice as much as they spend on marijuana, legally or otherwise.

Zacks special report revealing how investors can profit from this new opportunity. As more states legalize this activity, the industry could expand by as much as 15X. Zacks’ has just released a Special Report revealing 5 top stocks to watch in this space.

See these 5 “sin stocks” now>>

Note: Our Director of Research 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

Revenue Growth, Solid Balance Sheet Aid Mastercard (MA)

Expanding User Base, Instagram Strength Aids Facebook (FB)

Digital Transformation Efforts to Boost NIKE (NKE) Top Line

Featured Reports

Greif (GEF) Rides on Caraustar Acquisition Amid Higher Debt

Per the Zacks analyst, Greif is benefiting from Caraustar acquisition, focus on operational execution and its strong and diverse product portfolio despite higher debt.

Growth Across Key Categories Aid Big Lots' (BIG) Comps Trend

Per the Zacks analyst, Big Lots witnessed sturdy growth in the Furniture, Soft Home, Seasonal and Consumables categories, which boosted comps for the fifth straight time in second-quarter fiscal 2019.

Alaska Air Group (ALK) Passenger Revenues Solid, Costs High

The Zacks analyst is impressed with solid growth in passenger revenues at Alaska Air Group. High labor costs and debts, however, are major headwinds.

USB Flash Drive Product Rollouts Aid Western Digital (WDC)

Per the Zacks analyst, new product additions will enhance the Western Digital's existing product portfolio and aid it in securing a strong foothold in the global SSD market.

Passenger Traffic & Capacity Discipline Aid Gol Linhas (GOL)

The Zacks analyst is optimistic about the uptick in passenger traffic on the back of strong demand for air travel and improving yields. Focus on capacity discipline is an added positive.

Phillips 66 (PSX) Banks on Midstream, Refining Unit Weak

While the growing demand for midstream assets in the U.S. shale plays will aid Phillips 66, the decline in crude utilization rate is hurting the company's refining business.

Red Robin's (RRGB) Sales Building Efforts to Drive Growth

Per the Zacks analyst, Red Robin Red Robin's efforts to improve sales and regain market share via efficient menu innovation, focus on increasing service speed and digitization bode well.

New Upgrades

Loan Growth, SunTrust Merger Deal to Aid BB&T (BBT) Growth

Per the Zacks analyst, BB&T's merger deal with SunTrust (that will be earnings accretive), consistent loan growth, solid liquidity position and focus on non-interest income will support financials.

Pilgrim's Pride (PPC) Sales to Gain From Prepared Foods Unit

Per the Zacks analyst, Pilgrim's Pride is set to gain from its Prepared Foods unit. The company is making investments to strengthen this unit, as it is likely to form a big proportion of the top line.

Scientific Games (SGMS) Drives on Innovative Product Portfolio

Per the Zacks analyst, Scientific Games benefits from innovative product pipeline and robust performance from the gaming and interactive businesses.

New Downgrades

Weakness in EC&S Segment & Tariffs Woes Hurts Actuant (ATU)

Per a Zacks analyst, Actuant faces risks from weak Engineered Components & Systems segment. Outlook has been lowered reflecting the pending divestment of this segment. Tariffs are concerns too.

High Operating Costs to Mar Red Rock Resorts' (RRR) Earnings

Per the Zacks analyst, increase in operating costs at Red Rock Resorts is likely to weigh on margins and thereby hurt profits. In second-quarter 2019, operating costs rose 57.1% year over year.

Weakening Demand Amid Rising Macro Woes Hurt Autodesk (ADSK)

Per the Zacks analyst, Autodesk is hurt by sluggish demand environment on the backdrop of ongoing trade-war, Brexit-related uncertainty and slowdown in manufacturing in Central Europe.

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Western Digital Corporation (WDC) : Free Stock Analysis Report
Phillips 66 (PSX) : Free Stock Analysis Report
NIKE, Inc. (NKE) : Free Stock Analysis Report
Mastercard Incorporated (MA) : Free Stock Analysis Report
Facebook, Inc. (FB) : Free Stock Analysis Report
BB&T Corporation (BBT) : Free Stock Analysis Report
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