Wednesday, March 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 ConocoPhillips (COP), Dominion Energy (D) and Schwab (SCHW). 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 >>>
Buy-ranked ConocoPhillips’ shares are up +21.6% over the past year, outperforming the Zacks U.S. Integrated Oil industry, which has increased +4.1% over the same period. In terms of production and proved reserves, ConocoPhillips is the largest oil and gas exploration and production (E&P) player in the world.
The Zacks analyst thinks there are significant opportunities for the upstream energy player in the Eagle Ford where it owns about 3,400 undrilled locations. In fact, strong focus on two other prospective resources like Delaware basin and Bakken shale is expected to help ConocoPhillips achieve its target of more than 25% CAGR of production through 2017 to 2019.
The upstream energy player is strongly committed toward returning cash to shareholders as is evident from its $3-billion planned buyback program in 2019. ConocoPhillips is also planning to increase its dividend in 2019 after raising the same by 15% in 2018. On top of that, the balance sheet of ConocoPhillips is significantly less leveraged than the industry it belongs to.
(You can read the full research report on ConocoPhillips here >>>).
Shares of Dominion Energy have gained +6.2% over the past six months, underperforming the Zacks Electric Power industry, which has increased +10.3% over the same period. The Zacks analyst thinks Dominion Energy is benefiting from its regulated growth projects and synergies from acquisition.
The company’s expansion of electric transmission, natural gas facilities and midstream assets are strong positives. The company completed its merger with SCANA and it is likely to be immediately accretive to earnings. However, Dominion Energy’s future earnings may get affected due to increase in pension expenses and share dilution.
The company and its gas unit’s dependency upon third-party producers for natural gas supply increases risk. Any delay in the ongoing capital projects may impact Dominion Energy’s profitability.
(You can read the full research report on Dominion Energy here >>>).
Buy-ranked Schwab’s shares have marginally outperformed the Zacks Investment Brokers industry over the past year, declining -21.4% vs -23.1%. It has an impressive earnings surprise history, having surpassed expectations in each of the trailing four quarters.
The Zacks analyst thinks the company remains well positioned to gain from higher interest rates and its initiatives to strengthen trading income. Also, the company’s efforts to improve operating efficiency will go a long way to support profitability.
While continuously rising operating expenses and the company’s significant dependence on fee based revenues remain major concerns, its efficient capital deployment activities reflect a strong balance sheet position.
(You can read the full research report on Schwab here >>>).
Other noteworthy reports we are featuring today include Intuitive CenturyLink (CTL), Marvell Technology (MRVL) and Vornado Realty Trust (VNO).
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
See Stocks Today >>
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
ConocoPhillips (COP) Gains from Oil-Rich Eagle Ford Acreage
Ongoing Investment, Customer Growth Aid Dominion Energy (D)
Focus on Trading Revenues and Higher Rates Aid Schwab (SCHW)
Vornado (VNO) Poised for Growth on Portfolio-Revamp Efforts
Per the Zacks analyst, Vornado's focus to redeploy asset sale proceeds to fund buyouts and redevelopment projects looks good. However, its earnings dilutive impact will impede near-term growth.
Newfield Buy Boosts Encana (ECA) Amid Natural Gas Weakness
While Encana's Newfield buyout should lead to strong production growth and significant synergies, the Zacks analyst is worried about weak gas prices to which the company is highly exposed.
Guidewire (GWRE) Rides on Cyence Buyout & Cloud Partnerships
Per the Zacks analyst, Guidewire's elaborate partnership programs and strategic collaborations are major growth drivers. Further, the acquisition of Cyence enhances its product suite and bodes well.
Strong Class 6-8 Lineup & New Launches Aid Navistar (NAV)
Per the Zacks analyst, Navistar is gaining from strong demand for Class 6-8 trucks and buses in the United States and Canada.
Rowan (RDC) Banks on High-Spec Jackups, Dayrates Fall
The Zacks analyst believes that Rowan's technologically advanced and versatile jack-up fleet will generate significant cash flow.
Esperion's (ESPR) LDL-C Lowering Pipeline Progressing Well
Per the Zacks analyst, Esperion is progressing well with LDL-C (bad cholesterol) lowering candidates.
Strategic Initiatives Aid PRA Group (PRAA), Expenses Hurt
Per the Zacks analyst, initiatives like the alliance with Banco Bradesco S.A and purchase of Resurgent Holdings LLC's Canadian business should drive growth.
CenturyLink (CTL) Aims to Benefit From Revamped Operations
Per the Zacks analyst, CenturyLink intends to transform its business operations through product evolution and digitizing of customer interactions, which augurs well for healthy revenue growth.
Solid Individual Mortality Business Aids Reinsurance Group (RGA)
Per the Zacks analyst, Reinsurance Group is set to grow as matured Individual mortality generates stable earnings while value embedded in the in-force business should generate long-term earnings.
Robust Healthcare & Strategic Buyouts Aid FUJIFILM (FUJIY)
Per the Zacks analyst, acquisitions of Biogen's biologics unit, Irvine Scientific Sales and IS JAPAN are helping FUJIFILM to expand in the fast growing healthcare sector.
Weak Storage Demand, Inventory Control Hurt Marvell (MRVL)
Per the Zacks analyst, low demand for storage controllers due to fall in cloud capital spending and CPU shortages is hurting Marvell's top line. Tight inventory control by customers is also a concern.
Higher Costs to Weigh on Bed Bath & Beyond's (BBBY) Margins
Per the Zacks analyst, Bed Bath & Beyond is grappling with soft margins for 10 quarters now due to lower merchandise margin and higher SG&A expenses. This is likely to continue in fiscal 2018.
Currency Headwinds, Declining Margins Hurt Stratasys (SSYS)
Per the Zacks analyst, the impact of adverse currency fluctuations is affecting Stratasys' top line. Moreover, higher sales generated from the lower-margin products are keeping margins under pressure.
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Vornado Realty Trust (VNO) : Free Stock Analysis Report
The Charles Schwab Corporation (SCHW) : Free Stock Analysis Report
Marvell Technology Group Ltd. (MRVL) : Free Stock Analysis Report
Dominion Energy Inc. (D) : Free Stock Analysis Report
CenturyLink, Inc. (CTL) : Free Stock Analysis Report
ConocoPhillips (COP) : Free Stock Analysis Report
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