Top Analyst Reports for Union Pacific, 21st Century Fox & BP

Tuesday, July 10, 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 Union Pacific (UNP), Twenty-First Century Fox (FOXA) and BP plc (BP). 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 >>>

Union Pacific’s shares have outperformed the Zacks Rail industry (+33.6% vs. +20.6%) as well as fellow railroad operator Norfolk Southern Corp. (+28.3%) in the last one year. The Zacks analyst expects Union Pacific to perform well in the second quarter of 2018 as well. Detailed results should be out on Jul 19.

Higher freight revenues are expected to boost the company’s second-quarter results. The metric is likely to increase on the back of overall volume growth among other factors.

The company's efforts to reward shareholders are also impressive. At its Investor Day on May 31, Union Pacific stated that it intends to repurchase shares worth $20 billion during 2018-20 period. Dividend payout ratio in the period is anticipated between 40% and 45%.

However, high operating expenses and debt levels remain concerns. Declining automotive volumes due to sluggish vehicle production in the United States is also worrisome.

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

Shares of Twenty-First Century Fox have increased +76.4% over the last year, outperforming the Zacks Film and Television industry, which has gained +58.5% over the same period. The Zacks analyst thinks Twenty-First Century Fox continues to benefit from rise in retransmission and robust advertising demand for its live content and entertainment products.

The company is now rumored to bid higher for the remaining 61% stake in Europe’s leading pay-TV broadcaster Sky plc to counter Comcast's aggressive bid. Further, the ongoing tussle between Disney and Comcast over Fox’s assets bodes well for investors.

Although Disney’s latest bid is beneficial for shareholders, Comcast is highly anticipated to raise its all-cash bid, providing better returns to investors. However, increasing cable networking programming cost is a headwind.

(You can read the full research report on Twenty-First Century Fox here >>>).

Strong Buy-ranked BP’s shares are up +35.7% over the last year, outperforming the Zacks International Integrated Oil industry (up +23.7%). The integrated energy company has been gaining on the back of a strong portfolio of upstream projects.

Since 2016, BP has placed 15 key upstream projects online, including Atoll Phase 1 & Shah Deniz 2. All those developments are backing the British energy giant to boost production by 900 thousand barrel of oil equivalent per day (MBOE/D) by 2021.

Moreover, the company has a strong commitment in returning cash back to the shareholders through share buybacks and dividend payments. BP pays lucrative dividend yield as the current yield of 5.1% is significantly higher than S&P 500’s 1.8%. In fact, over the past few years, the company has been persistently paying higher dividend yield than S&P 500.

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

Other noteworthy reports we are featuring today include Allergan (AGN), Mondelez (MDLZ) and TOTAL (TOT).

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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

Dividends & Buybacks Aid Union Pacific (UNP) Amid Cost Woes

Advertising Growth Benefits Twenty-First Century Fox (FOXA)

BP plc's (BP) String of Upstream Projects to Fuel Growth

Featured Reports

TOTAL (TOT) Gains From Start-ups, Geo-political Risks Ail

The Zacks analyst believes TOTAL is gaining from start-ups, which are boosting its hydrocarbon production levels but is exposed to exchange rate risks and expropriation of assets.

Allergan's (AGN) Key Drugs & Cost Cuts to Abate Generic Woes

Allergan faces generic competition for key drugs Namenda XR and Restasis in 2018. The Zacks analyst says that drugs like Botox/Linzess, new drugs and cost cuts can shield it from potential sales drop.

Acquisitions to Drive Mondelez (MDLZ), Freight Costs a Worry

The Zacks analyst expects Mondelez International sales to keep gaining from buyouts, which have helped it expand in Europe and emerging markets.

Acquisitions Aid Marsh & McLennan's (MMC), High Cost Hurts

The Zacks analyst views favorably numerous purchases that have enabled the company to enter new geographies, foray into new businesses & develop new segments, leading to growth.

Portfolio Mix Overhaul to Aid Kimco (KIM) Amid Retail Blues

Per the Zacks analyst, Kimco will gain from its ownership of premium assets in key metro markets.

Market Diversity Aids Fluor (FLR), Backlog Erosion Hurts

Fluor's leading position in nuclear remediation and market diversity proves conducive to its solid performance.

Twilio (TWLO) Banks on Growing Active Customer Accounts

Per the Zacks analyst, Twilio's continued focus on introducing products is helping it grow its active customer accounts, which is driving top-line growth.

New Upgrades

Robust Used-Car Market & Store Expansion Aid CarMax (KMX)

Per the Zacks analyst, increased demand for used-vehicles and aggressive store expansions in new and existing markets are driving CarMax's revenue growth.

Strong Prospects in Upper Extremities Unit Aids Wright (WMGI)

Solid performance in the U.S. Upper Extremities segment has been a significant growth driver for Wright Medical. The Zacks analyst is also upbeat about growth in the Perform Reversed Glenoid platform.

Improving Retention Rate, Pay-TV Resizing Aids DISH (DISH)

Per the Zacks analyst, DISH's excellent customer service is improving retention. Also focus on acquiring and retaining subscribers that are profitable over the long term is paying off.

New Downgrades

Alaska Air Group (ALK) Stung by High Costs, Capacity Woes

The Zacks analyst is worried about capacity expansion continuously outpacing traffic growth at Alaska Air Group. High labor and fuel costs are also hurting the bottom line.

SBA Communications (SBAC) Plagued by Industry Consolidation

Per the Zacks analyst, SBA Communications is likely to be exposed to high earnings volatility due to the ongoing consolidation trend among telecom and cable TV operators.

High Interest Cost, Forex Volatility Hurt Total System (TSS)

Per the Zacks analyst, high interest from debt taken to fund Cayan acquisition will hurt margins. The company's international operations expose it to foreign exchange headwinds.

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Union Pacific Corporation (UNP) : Free Stock Analysis Report
 
TOTAL S.A. (TOT) : Free Stock Analysis Report
 
Mondelez International, Inc. (MDLZ) : Free Stock Analysis Report
 
Twenty-First Century Fox, Inc. (FOXA) : Free Stock Analysis Report
 
BP p.l.c. (BP) : Free Stock Analysis Report
 
Allergan plc (AGN) : Free Stock Analysis Report
 
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