Top Analyst Reports for Visa, JPMorgan & Bank of America
Tuesday, June 30, 2020
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 Visa (V), JPMorgan Chase (JPM) and Bank of America (BAC). 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 >>>
Visa’s shares have outperformed the Zacks Financial Transaction Services industry over the past year (+10.2% vs. +4.2%). The Zacks analyst believes that a number of acquisitions and alliances as well as significant technology upgrades coupled with effective marketing have paved the way for Visa’s long-term growth.
Shift in payments to new methods such as mobile, cards, online and via wearables paves way for long term growth and have led to an increase in payments volume, cross-border volume and processed transactions.
The acquisition of Visa Europe is a growth strategy for the long haul. Its strong cash position enables the company to undertake effective capital deployment measures for its shareholders. However, high operating expenses weigh on its operating margins. Increase in client initiatives will be a drag on the company’s top line.
(You can read the full research report on Visa here >>>)
JPMorgan share have performed modestly better than the peer group over the past six months (down -32.5% vs. -37.1% for the Zacks Major Banks industry and -5.2% decline for the S&P 500 index), reflecting the company's strong capital position, dividend safety, and an overall well-regarded management team. The Zacks analyst believes that the acquisition of InstaMed, branch openings and focus on credit card business will continue aiding its financials. JPMorgan will be kicking off the June-quarter reporting cycle for the industry before the market's open on July 14th.
The bank surpassed the Zacks Consensus Estimate for earnings in three of the trailing four quarters. The company will be maintaining its current dividend payout level in the third quarter following the announcement of annual stress test results. Yet, the Fed’s accommodative policy and near-zero interest rates are expected to hurt the bank’s interest income and margins.
Also, coronavirus-induced concerns will likely continue to hamper business activities. Thus, loan growth will likely be muted in the near term. Challenges in expanding mortgage operations and significant dependence on capital market revenues will hurt fee income growth to an extent.
(You can read the full research report on JPMorgan here >>>)
Bank of America shares have matched the performance of JPMorgan over the past six months, though the stock has lagged the broader market in a major way (-32.7% vs. -5.2% for the S&P 500 index), reflecting the tough operating environment characterized by weak economy and an unfavorable interest rate backdrop. That said, Bank of America is better placed than most of its peers, with opening new branches, improved digital offerings and efforts to manage costs likely to aid profitability.
Additionally, strong balance sheet and liquidity position are expected to continue supporting the company's financials amid economic slowdown. However, near-zero interest rates are expected to hurt the bank’s margins and interest income.
Also, coronavirus-induced concerns will likely continue to hamper business activities and thus, loan growth is expected to be muted. Further, dependence on capital markets performance makes us apprehensive, given its cyclical nature. This is likely to hurt fee income growth to some extent.
(You can read the full research report on Bank of America here >>>)
Other noteworthy reports we are featuring today include SAP SE (SAP), Chevron (CVX) and Eli Lilly (LLY).
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Sheraz Mian
Director of Research
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
Visa (V) Rides on Growing Top Line & Solid Balance Sheet
New Branches, Loan Growth Aid JPMorgan (JPM) Amid Low Rates
Expense Saving Aids Bank of America (BAC) Amid Low Rates
Featured Reports
Growth in S/4HANA Platform & Expanding Clientele Aid SAP
Per the Zacks analyst, robust adoption of S/4HANA and other cloud-based offerings have supported SAP's top line.
Chevron (CVX) to Gain from Massive Permian Acreage
The Zacks analyst believes Chevron's massive acreage in the lucrative Permian Basin will enable the company to ramp-up its output.
Trulicity, Taltz to Drive Lilly's (LLY) Sales in 2020
The Zacks analyst believes that despite coronavirus pandemic, Lilly's sales in 2020 will be driven by higher demand for drugs like Trulicity, Taltz, and others and potential drug launches.
Strategic Acquisitions Aids Boeing (BA), Low Deliveries Hurt
Per the Zacks Analyst, strategic acquisitions made by Boeing, such as overtaking KLX, boosts growth. However, risks related to lower 737 deliveries caused by the ongoing pandemic raises concerns.
S&P Global (SPGI) Benefits From Acquisitions Amid High Debt
The Zacks analyst likes S&P Global's buyout strategy to innovate, increase differentiated content and develop new products. High debt may reduce its future expansion and worsen its risk profile.
Dollar General's (DG) Sturdy Comps Run to Propel Top-Line
Per the Zacks analyst, better price management, merchandise efforts, operational initiatives and coronavirus-led demand spike should drive sales.
Debt Reductions, Randgold Acquisition Aid Barrick (GOLD)
While Barrick faces challenges from higher production costs, it should gain from its actions to cut debt and synergies of the Randgold buyout, per the Zacks analyst.
New Upgrades
COVID-19 Test Launch Aids Quest Diagnostics (DGX) in Pandemic
The Zacks analyst is upbeat about Quest Diagnostics' latest COVID-19 test service launch within Diagnostic Information Services business. Boston Clinical Laboratories buyout plan is an added plus.
AECOM (ACM) Rides on G&A Reduction Plan, Strong Backlog
Per the Zacks analyst, strategic restructuring initiatives to improve profitability and de-risk its business profile along with solid prospects across the business bode well for AECOM.
Winnebago (WGO) Banks on Newmar Buyout and Low Leverage
Acquisition of Newmar is driving the sales of Winnebago's Motorhome unit, thereby boosting the firm's prospects. The Zacks analyst also appreciates the firm's low leverage of 38%.
New Downgrades
Weak Performing Upstream Energy Segment Hurts Ecolab (ECL)
Per the Zacks analyst, sluggishness at Ecolab's Upstream Energy business line, mainly due to substantial drop in the well-stimulation business, might weigh on the company's performance.
Carnival's (CCL) Booking Down Significantly Due to Pandemic
Per the Zacks analyst, Carnival performance will continue to be hurt by dismal bookings. For 2021, booking for the six weeks ending May 31, 2020, were down significantly compared with the prior year.
Pacira's (PCRX) Exparel Aid Growth, Heavy Dependence a Woe
Per the Zacks Analyst, Pacira's top line mainly comprises contribution from Exparel, which continues to maintain the momentum.
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Visa Inc. (V) : Free Stock Analysis Report
SAP SE (SAP) : Free Stock Analysis Report
Eli Lilly and Company (LLY) : Free Stock Analysis Report
JPMorgan Chase Co. (JPM) : Free Stock Analysis Report
Chevron Corporation (CVX) : Free Stock Analysis Report
Bank of America Corporation (BAC) : Free Stock Analysis Report
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