Wednesday, March 15, 2017
Today's Research Daily features new research reports on 16 major stocks, including Bank of America (BAC), Oracle (ORCL) and Suncor Energy (SU).
Bank of America’s shares have been one of the biggest beneficiaries of the changed macro backdrop following the election, which includes expectations of faster economic growth and overhaul of the country's tax and regulatory systems. Further, easing margin pressure driven by an improving rate scenario will support the top line.
Moreover, the company's efforts to streamline and simplify operations continue to enhance efficiency and strengthen its balance sheet. No doubt, Bank of America shares have been strong performers since the election -- up +48.9% since November 8th vs. +29.7% gain for the Zacks Major Banks industry in that time period, but the analyst still sees plenty of upside in for the stock. (You can read the full research report on Bank of America here.)
Oracle is in the middle of a business transition from on-premise licensing to cloud-based business model, which will be accretive to long term growth. However, it is a drag on the financials at present. Not surprisingly then, Oracle has underperformed the Zacks Technology Sector in the last one-year, gaining +6.4% vs. +16.9%. However, estimates have been stable lately ahead of the company’s Q3 earnings release.
Also, the company has mixed record of earnings surprises in recent quarters. But the Zacks analyst likes the ongoing momentum at SaaS and PaaS, which provides significant growth opportunities. The introduction of Generation2 IaaS data centers are expected to improve Oracle’s competitive prowess against Amazon Web Services and will drive market share going ahead. (You can read the full research report on Oracle here.)
Shares of Suncor Energy have gained +15% over the last 6 months, handily outperforming the Zacks Oil & Gas - Canadian Integrated industry, which rose just +9% over the same time period, as well as key rival Canadian Natural Resources. SU recently came out with better-than-expected Q4 profit, with production rising to a record on the back of its recent transactions to gain a majority stake in the massive Syncrude oil sands project.
Importantly, SU's success in reducing cash costs has magnified the effects of rebound in oil prices. A 10% dividend boost and plans for share buyback are other positives in the Suncor story. However, extracting crude from the oil sands is a costly affair and as such, hampers profit margins. (You can read the full research report on Suncor Energy here.)
Other noteworthy reports we are featuring today include Southwest Airlines (LUV), Telefonica (TEF) and Dominion Resources (D).
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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
BofA (BAC) Poised to Benefit from Improving Rate Scenario
Oracle's (ORCL) Cloud Transition Augurs Well for Long Term
Syncrude Stake Boosts Suncor (SU), Pricing Woes Remain
Southwest Airlines (LUV) Trims Q1 Unit Revenue View
Though disappointed by Southwest Airlines' bearish view on unit revenues for Q1, the covering analyst is impressed by its investor as well as employee-friendly moves.
Telefonica (TEF) Q4 Earnings Beat Estimates, Revenues Miss
The covering analyst thinks Telefonica's successful capitalization of opportunities in the digital world bode well. However, intense competition and a debt laden balance sheet might have hit revenues.
Lincoln Electric (LECO) To Benefit from Improving Volumes
The Zacks analyst believes while Lincoln Electric will gain from recovering international and North American welding markets, foreign exchange headwinds will impact results.
Greif (GEF) to Grow on Transformation Plan Amid FX Headwinds
The covering analyst expects Greif to benefit from its transformation plan, despite poor containerboard prices, a strong U.S. dollar and sluggish global industrial economy.
Navistar (NAV) Posts Loss in Q1, to Gain from Alliance
Navistar reported wider-than-expected loss in first-quarter fiscal 2017. The Zacks analyst thinks Navistar will gain from alliance with Volkswagen, launch of products & from cost-saving initiatives.
McDermott's (MDR) Q4 Earnings and Revenues Beat Estimates
The covering analyst believes that McDermott's incredible earnings surprise history highlights the company's success in cost restructuring programs and excellence in project execution.
Keryx (KERX) to Focus on Auryxia's Label Expansion in 2017
The Zacks analyst stresses that Keryx remains focused on expanding the label of its sole drug Auryxia in 2017, which on approval will boost sales.
Eni SpA (E) Expects Production for 2017-2020 to Grow by 3%
The Zacks analyst believes that new field start-ups and ramp-ups will help Eni to grow its production by 3% during 2017-2020. Further, Eni's strategy to invest in high value projects is noteworthy.
Regency (REG) Set for Solid Growth on Equity One Merger
The covering analyst thinks Regency is poised for growth on the Equity One merger. This merger has helped create a high-quality portfolio of 429 properties, mainly grocery-anchored.
Bed Bath & Beyond's (BBBY) Strategic Initiatives Hold Promise
The Zacks analyst thinks Bed Bath & Beyond's focus on strategic initiatives like store expansion, eCommerce and improved customer service, along with its capital allocation strategy hold promise.
Dominion Resources (D) Down on Poor Earnings Expectations
The Zacks analyst thinks unplanned outages at power stations might impact Dominion's 2017 operating earnings. Dependence on third-party producers for the supply of natural gas also poses impediments.
Chicago Bridge & Iron (CBI) Hurt by Commodity Price Woes
Volatility in commodity prices continues to hurt Chicago Bridge & Iron profits. Persistently low capital investments and softness in petrochemical & natural gas industries are likely to mar prospects.
Brown & Brown's (BRO) Escalating Expenses Raise Concerns
The covering analyst believes that Brown & Brown's increasing expenses might continue to hurt margins in the near term, while dependence on limited clients for commission revenues raises caution.
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Telefonica SA (TEF): Free Stock Analysis Report
Suncor Energy Inc. (SU): Free Stock Analysis Report
Oracle Corporation (ORCL): Free Stock Analysis Report
Southwest Airlines Company (LUV): Free Stock Analysis Report
Dominion Resources, Inc. (D): Free Stock Analysis Report
Bank of America Corporation (BAC): Free Stock Analysis Report
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