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Top Analyst Reports for Verizon, McDonald's & Lockheed Martin

Mark Vickery

Monday, July 1, 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 Verizon (VZ), McDonald’s (MCD) and Lockheed Martin (LMT). 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 >>>

Verizon’s shares have gained +13.3% in the past year, outperforming the Zacks Wireless National industry’s increase of +8.7% during the same period. The Zacks analyst thinks that Verizon is well positioned to benefit from the impending 5G boom, driven by healthy traction in the wireless business.

The telecom giant is seeking first mover advantage in the 5G race with the launch of commercial 5G smartphones, in collaboration with Samsung. Focus on online content delivery, mobile video and online advertising will likely drive future growth. Furthermore, the company has upped the ante against its rivals by launching 5G Ultra Wideband network in Chicago, Minneapolis, and in select locations of Denver and Providence.

However, it continues to struggle in a competitive U.S. wireless market. The company's wireline division is struggling with losses in access lines due to competitive pressure from VoIP service providers. Verizon is spending heavily on promotion and lucrative discounts to woo customers, which weighs on its margins.

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

Shares of McDonald’s have gained +10.2% in the past three months, outperforming the Zacks Restaurants industry, which has increased +8.7% over the same period. The Zacks analyst thinks that its various sales and digital initiatives as well as positive comparable sales bode well.

Furthermore, global comps at McDonald’s have been positive over the trailing 15 quarters. The company’s increased focus on delivery and accelerated deployment of Experience of the Future restaurants in the United States should boost its performance. These apart, efforts to drive growth in international markets are encouraging. However, high labor costs and currency headwinds remain concerns.

Additionally, revenues have been under pressure for quite some time due to strategic refranchising initiatives. Even its heightened focus on refranchising might reduce capital requirements and facilitate EPS growth. McDonald’s margins have been under pressure.

(You can read the full research report on McDonald’s here >>>).

Lockheed Martin’s shares have gained +21.5% in the past year, outperforming the Zacks Aerospace Defense industry which has gained +8.4% over the same period. The Zacks analyst thinks that Lockheed Martin, being the largest defense contractor in the world, enjoys strong demand for its high-end military equipment in domestic and international markets.

As a result, solid order growth has been a key catalyst for the company. F-35 continues to be a major revenue contributor. Of late, the company is witnessing increased demand for its THAAD missiles from the Kingdom of Saudi Arabia.

However, the company’s higher debt-to-equity ratio shows that the stock is highly leveraged when compared to its industry, and thus bears higher chance of insolvency. Lockheed Martin also faces intense global competition for its broad portfolio of products and services. Higher cost expenditure related to the F-35 program may also hurt growth trajectory.

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

Other noteworthy reports we are featuring today include 3M (MMM), Capital One (COF) and Dollar Tree (DLTR).

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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

Verizon (VZ) Rides on 5G Ultra Wideband Network Amid Rivalry

McDonald's (MCD) Robust Comps Growth to Drive Performance

Stiff Competition, F-35 Program Costs Hurt Lockheed (LMT)

Featured Reports

Card Focus, Loans Aid Capital One (COF), Asset Quality a Woe

Per the Zacks analyst, focus on credit card and online banking businesses, solid loan growth and strong balance sheet aid Capital One. Yet, worsening asset quality and higher costs are major concerns.

Dollar Tree's (DLTR) Impressive Comps Trend to Aid Growth

Per the Zacks analyst, continued growth in comps is likely to aid the company's top and bottom lines.

Loan Growth Supports M&T Bank (MTB), Rising Costs a Woe

Per the Zacks analyst, M&T Bank's increasing loans and deposits balances will get a further boost from improving economy.

McCormick's (MKC) CCI Program to Continue Boosting Savings

Per the Zacks analyst, McCormick's bottom line is gaining from cost savings from the Continuous Improvement (CCI) program.

Robust Wireless Growth Benefits Shaw Communications (SJR)

Per the Zacks analyst, Shaw Communications' Wireless business is benefiting from higher subscriber growth and an improvement in average revenue per unit (ARPU).

Fleet Upgrade Buoys Air Lease (AL) Amid Debt Woes

The Zacks analyst likes the company's efforts to upgrade its fleet. Efforts to reward shareholders are encouraging too.

Strategic Efforts to Boost DICK'S Sporting (DKS) Market Share

Per the Zacks analyst, DICK'S Sporting has been making continuous investments in e-commerce, stores and payroll, Team Sports HQ and private brands, which is likely to boost market share growth.

New Upgrades

Solid Mortgage Insurance Business Aids Arch Capital (ACGL)

Per the Zacks analyst, Arch Capital is poised to grow on expanding U.S. Mortgage Insurance business, strong premium growth, compelling product portfolio, strategic buyouts and robust capital position.

Health Care Products Aid Fresenius (FMS) Amid Competition

Fresenius continues to gain from its core Health Care Products segment. The Zacks analyst is however apprehensive about the competitive dialysis market.

Dividends, Buybacks & Fleet Upgrade Buoy SkyWest (SKYW)

The Zacks analyst appreciates the company's efforts to reward shareholders. Efforts to modernize its fleet are also encouraging.

New Downgrades

Rising Operating Expenses Hurt 3M (MMM)

Per the Zacks analyst, 3M's revenue growth is being dampened by a rise in operating expenses due to inflation in the prices of major inputs & high interest expenses, which is hurting its bottom line.

Weak Home Unit & Tariffs Pose Concerns for Kohl's (KSS)

Per the Zacks analyst, home category weakness and adverse weather conditions are a hurdle for Kohl's store sales. These factors and negative impacts of tariffs are likely to dent fiscal 2019 results.

High Debt & Pricing Pressures Hurt Western Digital (WDC)

Per the Zacks analyst, a declining trend in PC shipments, sluggishness in client compute hard drives demand, ballooning debt levels and stiff competition are key negatives.

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Verizon Communications Inc. (VZ) : Free Stock Analysis Report
3M Company (MMM) : Free Stock Analysis Report
McDonald's Corporation (MCD) : Free Stock Analysis Report
Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
Dollar Tree, Inc. (DLTR) : Free Stock Analysis Report
Capital One Financial Corporation (COF) : Free Stock Analysis Report
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