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Top Analyst Reports for Home Depot, Phillip Morris & United Parcel Service

Mark Vickery
Top Analyst Reports for Home Depot, Phillip Morris & United Parcel Service

Thursday, May 23, 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 Home Depot (HD), Philip Morris (PM) and United Parcel Service (UPS). 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 >>>

Home Depot’s shares have lost -1.4% over past three months, outperforming the Zacks Retail Building Products industry’s -2.7% decline. The company reported soft comps in first-quarter fiscal 2019, which lagged analysts’ expectations. The Zacks analyst thinks tough year-over-year comparisons owing to hurricane-related sales hurt comps.

The company’s top-line performance in the fiscal first quarter was also hurt by adverse weather in February and continued deflation in lumber prices. Further, stiff competition from other leading players remains an added concern. Nevertheless, Home Depot retained its five-year long trend of earnings beat in the fiscal first quarter, with positive sales surprise in nine of the last 11 quarters.

Results gained from strength in both Pro and DIY categories. The company’s efforts to provide an interconnected shopping experience to customers with localized and innovative products, and improved productivity also aided its quarterly performance.

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

Shares of Philip Morris have gained +5.2% in the past year, outperforming the Zacks Tobacco industry's decline of -8.2%. The Zacks analyst thinks the company is benefiting from advancement in RRPs arena, which was fueled further when the FDA allowed the company to sell IQOS heating devices.

Further, strong growth in heated tobacco units aided the company’s top line in the first quarter of 2019. Efficient pricing boosted performance in the first quarter, which is expected to be a key catalyst in the forthcoming periods.

However, headwinds in the cigarette category are a concern. Markedly, revenues in the combustible unit declined year over year in the first quarter, while shipment volumes were flat. Stringent policies and fading consumer interests are weighing on cigarette sales. Further, management expects sales volumes in the unit to continue declining in 2019.

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

United Parcel Service’s shares have outperformed the Zacks Transportation - Air Freight and Cargo industry over the past year, losing -16.4% vs. -24.1%. The Zacks analyst likes UPS' efforts to reward its shareholders through dividends and buybacks. Evidently, the company rewarded $4.2 billion to its shareholders in 2018.

Continuing its shareholder-friendly approach, in February 2019, UPS increased its quarterly dividend by 5.5% to 96 cents per share. In the first quarter of 2019, the company paid approximately $867 million as dividends to its shareholders, up 5.5%. Additionally, it bought back 2.4 million shares for $250 million.

UPS’ growth is hugely supported by the e-commerce development. The company anticipates cross-border e-commerce volume to grow by 28% over the next three years. However, the company's high capital expenditures are limiting bottom-line growth. Trade-war related uncertainty and high debts pose further challenges.

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

Other noteworthy reports we are featuring today include V.F. Corp (VFC), Regeneron (REGN) and Shopify (SHOP).

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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

Home Depot (HD) to Benefit From Pro Customer Category

Phillip Morris' (PM) Top Line to Benefit From Focus on RRPs

Dividends, Buybacks & e-commerce Buoy UPS Amid Cost Woes

Featured Reports

V.F. Corp's (VFC) Top Line to Gain from 2021 Growth Plan

Per the Zacks analyst, V.F. Corp is gaining from strength in its two core brands - Vans and The North Face along with its five-year strategic growth plan. Also, an optimistic FY20 view bodes well.

Sole Drug Exondys 51's Performance Boosts Sarepta (SRPT)

Per the Zacks analyst, Sarepta's DMD drug, Exondys 51, has shown strong performance in the past few quarters. However, dependence on a single product is a concern.

Investments to Boost OGE Energy (OGE), Cost Issues A Risk

Per the Zacks analyst, systematic infrastructural investments are expected to bolster utilities like OGE Energy's growth.

AptarGroup (ATR) Bets on Innovation & Transformation Plan

Per the Zacks Analyst, AptarGroup will gain from innovative product rollouts, acquisitions and its transformation plan to drive top-line growth and improving operations.

Loan Growth AidsProsperity Bancshares (PB), High Costs a Woe

Per the Zacks analyst, continued rise in loan balances and improving asset quality will further support Prosperity Bancshares.

CommScope (COMM) Rides on Networking Market Trends & Buyout

Per the Zacks analyst, CommScope is well positioned to benefit from long-term market growth trends, including network convergence, fiber and mobility.

Strength in Flash Solutions, Buyouts Aid Pure Storage (PSTG)

Per the Zacks analyst, Pure Storage's robust adoption of FlashArray & FlashBlade solutions is driving growth.

New Upgrades

Solid Soliris, Strong Ultomiris Uptake Fuel Alexion (ALXN)

Per the Zacks analyst, label expansion of blockbuster drug Soliris boosts Alexion. The uptake of Ultomiris has been strong. The recent acquisitions have diversified Alexion's pipeline.

Product Rollouts & Growing Merchant Base Aid Shopify (SHOP)

Per the Zacks analyst, Shopify is benefiting from introduction of Fraud Protect and Shopify Ping solutions. New merchant friendly applications are also bolstering its customer base.

Fluid & Metering Technologies to Drive IDEX's (IEX) Revenues

Per the Zacks analyst, solid performance of IDEX's Fluid & Metering Technologies segment, led by strength in the company's Industrial Fluids, Viking and Richter businesses will lend momentum to IDEX.

New Downgrades

Competition, Pipeline Setbacks Weigh on Regeneron (REGN)

Per the Zacks analyst, Regeneron is highly dependent on Eylea for growth which is expected to face competition by the end of the year. Pipeline setbacks are a concern too.

LATAM Airlines (LTM) Hit by Currency Woes & High Fuel Costs

The Zacks analyst is worried about the devaluation of local currencies. Also, high fuel costs are hurting the bottom line. Woes related to capacity overexpansion are an added concern.

Weak Home Deliveries & Margins to Hurt Toll Brothers (TOL)

Per the Zacks analyst, weaker-than-expected home deliveries are likely to have a negative impact on Toll Brothers' performance in the coming quarters.

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V.F. Corporation (VFC) : Free Stock Analysis Report
United Parcel Service, Inc. (UPS) : Free Stock Analysis Report
Shopify Inc. (SHOP) : Free Stock Analysis Report
Regeneron Pharmaceuticals, Inc. (REGN) : Free Stock Analysis Report
Philip Morris International Inc. (PM) : Free Stock Analysis Report
The Home Depot, Inc. (HD) : Free Stock Analysis Report
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