Top Analyst Reports for Microsoft, Wal-Mart & Home Depot
Wednesday, July 12, 2017
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 Microsoft (MSFT), Wal-Mart (WMT) and Home Depot (HD). 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 rated Microsoft’s shares lagged the Zacks Tech sector through the fall, but have led the way over the last six months (up +11.7% versus +10.7%) on greater appreciation for the company's reorganization and repositioning. The Zacks analyst stresses that Microsoft is benefiting from continuing enterprise strength, strong Office 365 adoption and robust penetration of Azure (the company's cloud offering).
The recently launched Azure Stack service that allows customers to use Azure from their own servers is likely to provide Microsoft with a competitive edge over its peers. Further, the addition of LinkedIn has improved the company's presence in the social media market. All in all, the company has emerged as a leader in the cloud space that promises momentum on a number of fronts.
(You can read the full research report on Microsoft here >>>).
Shares of Buy rated Wal-Mart have been strong performers lately, with the stock up +9.4% over the last six months, outperforming the S&P 500's +6.8% gain in the same time period. The market's growing appreciation for the company's efforts to build e-commerce capabilities and strengthen the legacy business through improved and expanded product assortment, store cleanliness and an overall pleasant customer experience to drive traffic.
The positive comps for the last 11 quarters backed by higher traffic are some of the more tangible outcomes of these efforts. The company has been making steady investments in its business, both on the brick-and-mortar side as well as in the e-commerce platform.
These are necessary outlays for its long-term competitive positioning, but they nevertheless have bearing on near-term profitability. The stock's recent momentum and outperformance relative to others like Target (TGT) suggest that market participants are willing to be patient with management's plans.
(You can read the full research report on Wal-Mart here >>>).
Buy rated Home Depot’s shares are up +11.5% over the last six months, outperforming the Zacks Retail sector (up +10.5%) and the broader market (S&P 500 up +6.8%) in that same time period. Improving customer experience, solid execution and consistent housing market recovery helped the company post an earnings surprise in first-quarter fiscal 2017, retaining the four-year long trend of beating earnings estimates.
The company’s relentless focus on offering innovative products, boosting interconnected customer experience and driving productivity seems to be paying off. Moreover, the company raised earnings guidance for fiscal 2017 while retaining its sales view. On the flip side, market participants can justifiably raise valuation concerns, particularly following the stock’s stellar recent performance.
(You can read the full research report on Home Depot here >>>).
Other noteworthy reports we are featuring today include Manulife (MFC), Marsh & McLennan (MMC) and General Dynamics (GD).
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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
Microsoft (MSFT) Benefits from Azure, Office 365 Strength
Higher Traffic Fuels Wal-Mart (WMT)'s Comparable Store Sales
Home Depot's (HD) Interconnected Strategy to Boost Sales
Featured Reports
Stanley Black (SWK) Gains from Newell Tool Buy, Costs Hurt
Per the Zacks analyst, Stanley Black will gain from Newell Tools & Craftsman Brand buyouts and disposal of Mechanical Security business going forward. Higher costs and forex woes remain issues.
Jet Sales Growth Aids General Dynamics (GD) Amid Low Backlog
Per the Zacks analyst, solid jet sales growth continues to boost General Dynamics' Aerospace segment expansion. Yet low demand for other products caused its total backlog to decline.
CBOE Holdings' (CBOE) Trading Volumes Impress, Expenses Ail
Per the Zacks analyst, CBOE Holding continues to benefit from trading volume growth. However, higher expenses are a concern.
IMAX (IMAX) Eyes Global Expansion Amid Box-Office Woes
The Zacks analyst is impressed by the multiple deals inked by the company with the aim of expanding its presence. The company's disappointing run at the box-office, however, raises concern.
Intrexon (XON) Largely Dependent on Partners, Pipeline Strong
Per the Zacks analyst, though Intrexon depends largely on license and collaboration deals for revenues, its strong diversified pipeline will drive long term growth.
McKesson (MCK) Poised on Improving Generic and Brand Market
The Zacks analyst believes that gradually stabilizing generic and brand market poise the company for growth. Also, cost-savings efforts remain encouraging.
Kellogg (K) Well Poised on Project K, ZBB Cost Saving Plans
Per the Zacks analyst, Kellogg's cost savings from its Project K and zero-based budgeting (ZBB) plans have been supporting renovation, innovation and margins.
New Upgrades
New Business Growth in Asia Continues to Aid Manulife (MFC)
Per the Zacks analyst, new business growth at Manulife's Asia unit, mainly driven by improved product mix and scale benefits, will continue to boost the company's operational performance.
Carnival (CCL) Rides on Bookings, Strong Cruising Demand
Per the Zacks analyst, solid booking trends are likely to lead to revenue growth at Carnival. Given burgeoning demand for cruise travel in 2017, the addition of new ships to its fleet also bodes well.
Robust Asset Inflows Support SEI Investments' (SEIC) Growth
Per the covering analyst, SEI Investments is all set to further improve profitability, driven by strong asset inflows, global presence as well as innovative investment products and services.
New Downgrades
Weak Chemical Segment Earnings to Weigh on Phillips 66 (PSX)
The Zacks analyst believes that a drag in Chemical unit earnings on lower margins, together with the company's huge debt load will cause an underperformance in Phillips 66 shares.
Lower New Vehicle Sales Hurts Group 1 Automotive (GPI)
The covering analyst is concerned about the decline in the company's new vehicle unit sales. A weak oil industry is also hurting its sales in the key Texas and Oklahoma markets.
Currency Woes, High Debt Drags Marsh & McLennan (MMC)
Per the Zacks analyst, currency volatility due to huge international presence & high debt is a concern, low interest rates have dragged investment income & increased pension liability risk.
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Wal-Mart Stores, Inc. (WMT) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Marsh & McLennan Companies, Inc. (MMC) : Free Stock Analysis Report
Manulife Financial Corp (MFC) : Free Stock Analysis Report
Home Depot, Inc. (The) (HD) : Free Stock Analysis Report
General Dynamics Corporation (GD) : Free Stock Analysis Report
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