Thursday, June 13, 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 Visa (V), Netflix (NFLX) and Accenture (ACN). 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 in the past year, gaining +27.7% vs. a +19.7% increase. The Zacks analyst thinks the company is gaining from consistent growth in payments volume, cross-border volume and processed transactions.
Numerous strategic acquisitions and alliances plus technology upgrades and effective marketing have paved the way for long-term growth and a consistent increase in revenues. The acquisition of Visa Europe is a long term growth strategy for the company. Its international business has been expanding and adds diversification benefits.
Visa is well-poised to gain from the growing electronic payment processing and a solid brand name. Its strong capital position facilitates business investments. Nevertheless, high client incentives and operating expenses weigh on its operating margins. Adverse foreign exchange volatility imparts instability to the company’s earnings.
(You can read the full research report on Visa here >>>).
Shares of Netflix have gained +29.1% year to date, outperforming the Zacks Broadcast Radio and Television industry’s rally of +22% during the same period. The Zacks analyst thinks the company’s strong subscriber addition rate reflects growing appeal of the streaming platform, primarily driven by a solid content portfolio.
This is also helping the company counter competition from the likes of YouTube, HBO and Amazon Prime video. Reportedly, the company is set to launch video games based on its popular shows like Stranger Things. The initiative is expected to create a buzz that is likely to drive the stock. However, Netflix’s weak guidance for second-quarter U.S. streaming paid net additions, due to a price hike, is a concern.
Moreover, high streaming content obligations and increased spending related to the gaming endeavor is expected to hurt cash flow generation. In fact, higher cash burn rate in 2019 is a major headwind.
(You can read the full research report on Netflix here >>>).
Accenture’s shares have outperformed the Zacks Consulting industry year to date, gaining +30.9% vs. +28.7%. The Zacks analyst thinks Accenture has been steadily gaining traction in its outsourcing and consulting businesses. It has been strategically enhancing its cloud and digital marketing suite through acquisitions and partnerships.
The company’s strong operating cash flow has helped it reward its shareholders in the form of dividends and share repurchases. Further, it has enabled Accenture to pursue opportunities in areas that show true potential. Accenture is currently a global leader in the Salesforce implementation service space.
On the flip side, Accenture continues to face pricing pressure due to significant competition from strong companies like Genpact, Cognizant and Infosys. Global presence exposes Accenture to foreign currency exchange rate fluctuations. Buyout-related integration risks can impact the company’s organic growth.
(You can read the full research report on Accenture here >>>).
Other noteworthy reports we are featuring today include Novartis (NVS), ConocoPhillips (COP) and BlackRock (BLK).
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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
Rising Revenues, Solid Balance Sheet Aid Visa (V)
Robust Content Aids Netflix (NFLX) Amid Stiff Competition
Accenture (ACN) Rides on Acquisitions Amid Pricing Pressure
Label Expansion of Drugs, New Approvals Drive Roche (RHHBY)
Per the Zacks analyst, efforts to develop its portfolio beyond oncology into MS and haemophilia is impressive. Rise in demand for new drugs and label expansion of existing drugs are other positives.
E-commerce Demand to Drive Grainger (GWW), Input Costs Ail
Per the Zacks analyst, focus on growing e-commerce sales and digital capabilities, favorable markets and successful turnaround of its Canada business will drive growth.
Acquisitions to Continue Boosting Smucker's (SJM) Top Line
Per the Zacks analyst, Smucker's top line is likely to continue benefitting from acquisitions.
Fortinet (FTNT) Rides on Strong Demand for Security Fabric
Per the Zacks analyst, Fortinet is benefiting from strong global demand for Security Fabric offerings which is aided by digital transformation and security refresh cycle across most industries.
Aerospace Business Aids RBC Bearings (ROLL), High Costs Hurt
Per the Zacks analyst, strong traction of RBC Bearings' aerospace business fueled by higher defense and aerospace OEM demand should continue to drive sales.
Passenger Revenues Aid Spirit (SAVE), Labor Costs Ail
The Zacks analyst likes the increase in passenger revenues at Spirit Airlines on the back of strong demand for air travel.
Project Pipeline Aids Canadian Solar (CSIQ), High Debt Hurts
Per the Zacks analyst, Canadian Solar has a strong pipeline of projects and carries out various acquisitions to further consolidate its position.
Performance of New Drugs, Restructuring Fuel Novartis (NVS)
Per the Zacks analyst, performance of Cosentyx, Entresto, Kisqali and Promacta drive Novartis. The separation of the Alcon business will allow Novartis to invest resources on its legacy business.
Hasbro's (HAS) U.S. and Canada Segment to Drive Growth
The Zacks analyst is optimistic about Hasbro's turnaround as its U.S. and Canada segment returned to growth in the first-quarter 2019. Hasbro is also witnessing improvement in commercial market.
CNA Financial (CNA) Poised to Grow on Solid Underwriting
Per the Zacks analyst, CNA Financial's history of maintaining the combined ratio at favorable levels, even in a tough operating environment, indicates its superior underwriting discipline.
Higher Operating Expenses to Hamper BlackRock's (BLK) Growth
The Zacks analyst believes that rising operating expenses (owing to higher general and administration costs) remain a near-term concern for BlackRock amid a tough operating environment.
ConocoPhillips (COP) Hurt by Rising Operating & Output Costs
The Zacks analyst believes that Conocophillips' profit levels will suffer from surging production costs and operating expenses.
AMETEK (AME) Hurt by Foreign Exchange & Integration Risks
Per the Zacks analyst, significant amount of overseas operations suffer from unfavorable currency fluctuations. An aggressive acquisition strategy poses integration risks.
Visa Inc. (V) : Free Stock Analysis Report
Novartis AG (NVS) : Free Stock Analysis Report
Netflix, Inc. (NFLX) : Free Stock Analysis Report
ConocoPhillips (COP) : Free Stock Analysis Report
BlackRock, Inc. (BLK) : Free Stock Analysis Report
Accenture PLC (ACN) : Free Stock Analysis Report
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