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Top Research Reports for Microsoft, Philip Morris & Morgan Stanley

Mark Vickery

Monday, July 24, 2017

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 Microsoft (MSFT), Philip Morris (PM) and Morgan Stanley (MS). 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 >>>

Microsoft’s shares lagged the Zacks Technology sector through the fall, but have led the way over the last six months (up +15.9% versus +12.1%) on greater appreciation for the company's reorganization and repositioning. Microsoft reported strong fourth-quarter fiscal 2017 results. Both earnings and revenues increased on a year-over-year basis.

The impressive results demonstrated that the company is benefiting from continuing enterprise strength, strong Office 365 and Windows 10 adoption and robust penetration of Azure. Also, the Zacks analyst thinks LinkedIn has improved the company's presence in the social media market, which improved top-line growth.

Management expects expenses to increase in fiscal 2018 due to continuing investments. This will weigh on profitability in the near term. Nevertheless, the company's expanding product portfolio is a key catalyst in the long haul. However, intensifying competition in the cloud space and unfavorable foreign exchange are headwinds.

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

Philip Morris posted weaker-than-expected second-quarter 2017 results, with both earnings and revenues lagging expectations. While earnings dipped due to lower cigarette volumes, net revenue gained from higher iQOS device sales, as well as favorable pricing and volume/mix. But the Zacks analyst likes the fact that the company is churning its portfolio and taking steps to develop smoke-free products as customers are shifting away from tobacco products.

In fact, Philip Morris remains focused on the growing e-cigarettes and less harmful alternative products such as heatsticks and iQOS products. Shares of the company also outperformed the Zacks categorized Tobacco industry in the past six months gaining +23.9% vs. +13.1%. However, strict government regulations from around the world, declining demand for cigarettes and currency headwinds remain major concerns.

(You can read the full research report on Philip Morris here >>>).

Morgan Stanley’s shares have outperformed the Zacks Finance sector over the last one year, gaining +60.2% versus the sector’s +22% increase. The company’s second-quarter 2017 earnings surpassed expectations, primarily driven by improved equity trading and a rise in underwriting income. The Zacks analyst likes the company’s efforts to offload its non-core assets to lower balance sheet risk and cost saving efforts, which will likely lead to improvement in profitability.

These initiatives, along with enhanced capital deployment should boost investors’ confidence in the stock. However, continued fall in corporate loan balances remains a concern for the company. This is most likely the primary reason for decrease in net interest income despite rise in interest rates.

(You can read the full research report on Morgan Stanley here >>>).

Other noteworthy reports we are featuring today include General Electric (GE), Union Pacific (UNP) and Bank of New York Mellon (BK).

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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

Microsoft (MSFT) Guides Up Expenses for '18, Azure Holds Key

Philip Morris' (PM) Earnings Lags on Higher Currency Impact

Project Streamline Aids Morgan Stanley's (MS) Profitability

Featured Reports

Strong Order Trends to be Growth Catalyst for ABB Ltd. (ABB)

Per the Zacks analyst, strong order growth in Robotics & Motion and Industrial Automation should more than offset the impact of declines in discretionary spending in oil & gas.

Legal Disputes Continue to Hurt Qualcomm's (QCOM) Margins

Per the Zacks analyst, Qualcomm continues to face charges due to unfair business practices and licensing royalty payments.

Auto Demand to Aid Nucor (NUE) Amid Steel Mill Weakness

Per the Zacks analyst, Nucor is facing headwinds in steel mills unit but prospects in automotive market appear bright.

General Electric (GE) Hit by Backlog, Beats Q2 on Cost Cuts

Per the Zacks analyst, GE is susceptible to risks due to high order backlog and foreign currency volatility.

Volume Growth Buoys Union Pacific (UNP) Amid Debt Woes

The Zacks analyst likes the improving coal scenario, which is aiding the company's overall volumes. The company's high debt levels raise concerns.

Jabil (JBL) Drives on Restructuring, $450M Share Buyback

Per the Zacks analyst, the restructuring program is helping in improving organizational efficiency and effectiveness, which is positive.

United Rentals (URI) Gains from Acquisition of NES Rentals

Per the Zacks analyst, NES Rentals will further boost United Rentals' revenues, EBITDA and overall scale, contributing $105 million to revenues and $46 million in adjusted EBITDA in second quarter.

New Upgrades

Higher Premiums Continue to Aid RLI Corp.'s (RLI) Revenues

Per the Zacks analyst, improving premiums will continue to boost operating revenues for RLI Corp., thereby accelerating the company's overall growth.

BNY Mellon's (BK) Lower Margin Stress to Aid Top-Line Growth

Per the Zacks analyst, the gradual ease in BNY Mellon's margin pressure with improving rates will likely aid top-line growth, lessening risks related to high dependence on fee income.

Skyworks (SWKS) Drives on Wi-Fi, Zigbee and LTE Demand

According to the Zacks analyst, Skyworks is benefiting from strong demand of its Wi-Fi, Zigbee and LTE solutions in the smartphone and IoT markets.nn

New Downgrades

Impax's (IPXL) Generic Segment Faces Continued Price Erosion

Per the Zacks analyst, Impax's Generics segment has been under competitive and pricing pressure, which is expected to persist through 2017 and is expected to dampen sales.

SAP SE's (SAP) Rising Operating Expenses Hurts Profitability

Per the Zacks analyst, rise in operational expenses will continue to hurt SAP's profitability. Also, weaknesses in key end markets and inherent fluctuations in client spending adds to the woes.

Genuine Parts (GPC) Hit by Labor Costs & High Inventory

Per the Zacks analyst, continuous rise in labor and delivery costs is hitting Genuine Parts' financials. High inventory is also affecting its short-term liquidity.

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Union Pacific Corporation (UNP) : Free Stock Analysis Report
Philip Morris International Inc (PM) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Morgan Stanley (MS) : Free Stock Analysis Report
General Electric Company (GE) : Free Stock Analysis Report
Bank Of New York Mellon Corporation (The) (BK) : Free Stock Analysis Report
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