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Top Research Reports for Apple, PepsiCo & BHP

Mark Vickery

Friday, December 6, 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 Apple (AAPL), PepsiCo (PEP) and BHP Group (BHP). 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 >>>

Apple’s shares have outperformed the broader S&P 500 index year to date (68.3% vs. 23.3%). The Zacks analyst believes that Apple is benefiting from continued momentum in the Services segment and improved iPhone sales, owing to the trade-in programs.

Non-iPhone devices continue to perform well, driven by strong demand for iPad, Apple Watch and AirPods. The company’s expanded portfolio that now includes new MacBook Pro, Apple Watch Series 5 and streaming service Apple TV+ is a key catalyst. Moreover, iPhone sales are expected to improve in China with the new iPhone models.

Nevertheless, uncertainties over the timeframe of the resolution of the U.S.-China trade war do not bode well for the company. Further, antitrust investigations, App Store-related lawsuits and Spotify’s complaint increase legal woes.

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

Shares of PepsiCo have lost 0.1% in the past three months against the Zacks Soft Drinks Beverages industry’s fall of 0.3%. The Zacks analyst believes that adverse currency rates are likely to hurt the company’s results in 2019.

Unfavorable impacts of ongoing investments to strengthen business, higher tax rate, and the absence of asset sale and refranchising gains that occurred in 2018 are likely to hurt PepsiCo’s earnings in 2019. However, the company reported earnings and sales beat in third-quarter 2019, driven by strength in all segments and robust pricing. This marked its ninth sales beat in the last 11 quarters, with positive earnings surprise in 14 of the last 15 quarters.

The company’s productivity savings goal of at least $1 billion annually through 2023 bodes well. Moreover, PepsiCo now expects organic revenues for 2019 to meet or exceed 4% growth stated previously.

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

BHP's shares have lost 5.4% over the past six months against the Zacks Mining - Miscellaneous industry's fall of 1.6%. The Zacks analyst believes that BHP Group is poised to gain from its investment plans in petroleum, copper, iron ore and potash.

BHP Group anticipates unit costs to be higher in fiscal 2020 thanks to natural field decline at conventional petroleum, falling copper grades, lower by-product credits and higher deferred stripping costs at Escondida. Trade volatility and slowdown in global growth have made investors apprehensive and affected commodity markets, which in turn will weigh on BHP Group’s results.

Iron ore prices have declined lately amid signs of recovery in Brazilian supply. However, metal prices will recover eventually driven by demand-supply imbalance. Further, the company’s efforts to make operations efficient by adopting smarter technology across its value chain will also drive results. Strong cash flow and lower debt also bode well.

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

Other noteworthy reports we are featuring today include S&P Global (SPGI), Canadian National Railway (CNI) and Schlumberger (SLB).

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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

Expanding Portfolio, Services Strength to Aid Apple (AAPL)

Emerging Markets Growth to Propel PepsiCo's (PEP) Revenues

Operational Efficiency Aid BHP Group (BHP), Low Prices Ail

Featured Reports

S&P Global (SPGI) Benefits From Buyouts Amid Weak Issuance

The Zacks analyst likes S&P Global's acquisition strategy to innovate, increase differentiated content and develop new products. Reduced issuance volumes in the United States weighs on the top line.

Dividends & Buybacks Aid Canadian National (CNI), Debts Ail

The Zacks analyst is impressed with the company's efforts to reward its shareholders. However, high debt levels are concerning. Disruption in operations due the rail strike is also a major headwind.

Schlumberger (SLB) Banks on International Oilfield Services

Schlumberger expects ramped-up oilfield services in international resources where the count of drilling rigs is rising. However, weak North American business concerns the Zacks analyst.

Dollar General's (DG) Sturdy Comps Run to Propel Top-Line

Dollar General boasts impressive comparable sales run. Per the Zacks analyst, the company's better price management, merchandise, cost containment and operational initiatives should drive sales.

Growth Projects Aid Newmont Goldcorp (NEM) Amid Cost Woes

While the company faces headwind from high production costs, it should gain from investment in its growth projects and efforts to improve efficiency, per the Zacks analyst.

Business Wins Aid State Street (STT), Lower Rates a Concern

Per the Zacks analyst, new business wins, inorganic growth efforts and strong liquidity position will aid State Street. However, lower interest rates and tough operating backdrop are key concerns.

New Upgrades

Qorvo (QRVO) Rides on Solid 5G Product Suite & GaN Solutions

Per the Zacks analyst, Qorvo's expanding portfolio of 5G and GaN solutions hold promise. Further, robust growth in company's wireless connectivity as well as in base station solutions is a positive.

Strong Buildings & Infrastructure Unit Aids Trimble (TRMB)

Per the Zacks analyst, strong civil construction business and contributions from e-Builder and Viewpoint buyouts are benefiting Trimble's Buildings & Infrastructure segment.

RH's Focus on Strategic Initiatives, New Galleries Bodes Well

Despite adverse macro trends, RH's focus on improving profit margins, strategic initiatives, core RH business as well as solid performance of new galleries is encouraging, per the Zacks analyst.

New Downgrades

Aptiv (APTV) Grapples With Weak Global Vehicle Production

The Zacks analyst believes that a weak global vehicle production continues to hurt demand for Aptiv's offerings.

Higher Costs, Lower Phosphate Demand to Hurt Mosaic (MOS)

Per the Zacks analyst, higher costs related to the impact of new tailings dam regulations in Brazil will weigh on Mosaic's margins.

High Costs and Soft Comps Likely to Hurt Red Robin's (RRGB)

Per the Zacks analyst, decline in comparable sales and limited international presence are likely to hurt Red Robin's (RRGB) revenues.

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S&P Global Inc. (SPGI) : Free Stock Analysis Report
Schlumberger Limited (SLB) : Free Stock Analysis Report
PepsiCo, Inc. (PEP) : Free Stock Analysis Report
Canadian National Railway Company (CNI) : Free Stock Analysis Report
BHP Group Limited (BHP) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
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