Thursday, January 11, 2018
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 Schlumberger (SLB), American Express (AXP) and BlackRock (BLK). 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 >>>
Schlumberger’s shares have lost -11.4% over the last one year, following the Zacks Oil and Gas Field Services industry’s -19.8% decline. However, this compares unfavorably with rival Halliburton’s -4.9% decline. But the Zacks analyst stresses that Schlumberger is the largest oilfield services player in the world with presence in every energy market across the world.
Also, in all the operating business segments, the company is among the top players. The firm has been banking on growing hydraulic fracturing work in the North American land market. Schlumberger is also expected to generate significant cash flow from the Palliser Block project where the company will assist Torxen Energy in setting up more than 1,600 oil wells.
Since 2015, Schlumberger’s long-term debt load has increased considerably. Moreover, the company’s cash balance has been declining over the last six quarters, reflecting significant balance sheet weakness.
(You can read the full research report on Schlumberger here >>>).
Shares of Buy-rated American Express are up +31.6% over the last year, outperforming the Zacks Financial Miscellaneous Services industry, which has gained +10.9% over the same period. The company continues to witness strong loan growth and credit metrics, plus lower operating costs.
The Zacks analyst likes its solid market position and strength in the card business. Significant opportunities from the secular shift toward electronic payments are key growth drivers. Strategic initiatives focusing on the platinum card portfolio and the OptBlue program will drive business volume. Cost reduction and return of significant capital to shareholders through dividend and share buyback are also positives.
However, an increase in provision for losses, high rewards expense and cost of card member services are some of the headwinds. American Express will likely incur nearly $2.4 billion charges in fourth-quarter 2017 from tax reform, which will cause its 2017 earnings to fall short of its guided range of $5.80-$5.90 per share.
(You can read the full research report on American Express here >>>).
Strong Buy-rated BlackRock’s shares have outperformed the Zacks Investment Management industry in the last six months, (+22.1% vs. +17.1%). This performance is supported by its impressive earnings surprise history, having surpassed expectations in three of the trailing four quarters.
The Zacks analyst likes the initiatives taken to restructure its actively managed equities business with an aim to meet changing client needs. These along with technological changes and its efforts to expand globally via acquisitions will further help top-line growth going forward. However, mounting expenses mainly due to continued rise in marketing costs is likely to hurt the bottom-line growth.
(You can read the full research report on BlackRock here >>>).
Other noteworthy reports we are featuring today include Aflac (AFL), Franklin Resources (BEN) and Deutsche Bank (DB).
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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
Higher Fracking Work Offsets Schlumberger's (SLB) Debt Load
Cost Control Efforts, Strong Balance Sheet Aids AmEx (AXP)
Equity Focus, Acquisitions Support BlackRock (BLK) Revenues
PRASM Growth Aids United Continental (UAL), Fuel Costs Hurt
The Zacks analyst likes the company's performance with respect to passenger unit revenues (PRASM). Efforts to reward shareholders also impress. High fuel costs are, however, hurting the bottom line.
Buybacks Buoy JetBlue (JBLU) Amid Capacity Woes
The Zacks analyst is impressed by the company's efforts to reward shareholders through buybacks. Efforts to reduce its debt levels also raise optimism. Capacity overexpansion is, however, a concern.
Big 5 Sporting's (BGFV) Dismal Sales Trends a Key Concern
Per the Zacks analyst, Big 5's dismal fourth quarter sales backed by unfavorable weather and soft firearm products sale hurts sentiment. However, its growth strategies and financials bode well.
Seagate (STX) Banks on NAND Supply Deal & Product Rollouts
Per the Zacks analyst, Seagate's recent NAND-supply deal with Toshiba will help it in developing advanced HDD, SSD and hybrid solutions. Also, sustained focus on launching products is a positive.
Solid Balance Sheet & Strong U.S. Business Aid Aflac (AFL)
The Zacks analyst views favorably strength in the company's U.S. segment which has grown revenues for several years.
HealthiestYou Buy Aids Teladoc (TDOC) Revenues & Membership
Per the Zacks analyst the acquisition of HealthiestYou has given Teladoc a stronger mobile offering and a greater foothold in the smaller employer market.
Franklin (BEN) Depicts Cost Control, Solid Capital Base
Per the Zacks analyst, Franklin's efforts to drive operational efficiency remain encouraging. It also continues to benefit from a strong capital position and diversification.
Boston Beer's (SAM) Three-Point Growth Plan Bodes Well
Per the Zacks analyst, Boston Beer's plan to revive the Samuel Adams and Angry Orchard brands, cost saving initiatives and long-term innovation positions it well for long-term growth.
Sinopec's (SNP) New Finds, Falling Debt Load Raise Optimism
The Zacks analyst values Sinopec's discoveries - the Shengli field and Junggar Basin, which will support long-term production. Also, declining debt and increasing cash reflect liquidity strength.
Loan Growth & Expansion Moves Support BOK Financial (BOKF)
Per the Zacks analyst, BOK Financial exhibits organic growth with easing margin pressure and escalating loan balances. Moreover, expansion moves bolster its growth prospects.
CF Industries (CF) Hurt by Debt-Laden Balance Sheet, Pricing Woes
Per the Zacks analyst, CF Industries has a debt-laden balance sheet while pricing headwinds prevails in the near term. The company is also exposed to challenging agriculture market conditions.
Retail Segment Softness Remains a Worry for SUPERVALU (SVU)
Per the Zacks analyst, SUPERVALU's retail unit has been recording soft identical store sales for 11 quarters on competition and tough pricing. Management expects these woes to linger in fiscal 2018.
Low Rates, Legal Costs Remain Woes for Deutsche Bank (DB)
Per Zacks analyst, Deutsche Bank's revenues continue to remain under pressure due to the prevailing low rate environment in the European economy. Also, pending legal matters will keep costs elevated.
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Schlumberger N.V. (SLB) : Free Stock Analysis Report
Deutsche Bank AG (DB) : Free Stock Analysis Report
BlackRock, Inc. (BLK) : Free Stock Analysis Report
Franklin Resources, Inc. (BEN) : Free Stock Analysis Report
American Express Company (AXP) : Free Stock Analysis Report
Aflac Incorporated (AFL) : Free Stock Analysis Report
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