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Top Research Reports for Royal Dutch Shell, TOTAL & Becton, Dickinson

Mark Vickery

Tuesday, December 24, 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 Royal Dutch Shell (RDS.A), TOTAL (TOT) and Becton, Dickinson (BDX). 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 >>>

Royal Dutch Shell’s shares have outperformed the Zacks International Integrated Oil industry year to date (+0.9% vs. -0.5%). The Zacks analyst believes that the Anglo-Dutch company's position as a key supplier of liquefied natural gas should further benefit its long-term cash flow growth on the back of attractive growth opportunities.

Europe's largest oil company’s Q3 earnings was ahead of analysts' expectations, driven by strong performance from the Downstream and Integrated Gas units.

Moreover, its dividend is safe and secure. However, there are worries over drop in its cash flow excluding working capital while the company’s poor reserve replacement ratio raises concerns about future production. Moreover, Shell’s $1.7-$2.3 billion impairment charge is expected to increase gearing. Hence, investors are advised to wait for a better entry point.

(You can read the full research report on Royal Dutch Shell here >>>)

Shares of TOTAL have gained +8.3% in the past three months against the Zacks Integrated International Oil industry’s rise of +0.7%. The Zacks analyst believes that the company continues to benefit on account of strong contribution from startups and the expanding upstream portfolio that has above industry-average exposure to the faster-growing hydrocarbon producing regions of the world.

Strategic acquisitions and divestment of assets that are not in sync with its long-term objectives are going to boost performance and further strengthen the company’s cash flow generation capability. Cost-saving initiatives are also aiding it to boost margins.

However, TOTAL's operations in some politically-troubled regions and increasing competition might affect profitability. Due to its global presence, the company is exposed to risks associated with pursuing business abroad.

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

Becton, Dickinson's shares have gained 10.2% over the past six months against the Zacks Dental Supplies industry's decline of -10.5%. The Zacks analyst believes that solid performance by the core BD Medical and Interventional segments instills optimism in the stock.

Domestic revenues increased year over year in recent times, driven by segmental strength. Growth in Europe and APAC is an added positive. Expansion in gross margin is also encouraging. BD has issued a solid guidance for fiscal 2020, which is indicative of bright prospects.

A series of product launches is expected to boost the stock further. On the flip side, a drop in operating margin raises concern. Management expects unfavorable foreign currency to partially mar BD’s bottom line in fiscal 2020 and first-quarter fiscal results. Competition in the MedTech space is stiff. The stock is overvalued at the moment.

(You can read the full research report on Becton, Dickinson here >>>)

Other noteworthy reports we are featuring today include Kinder Morgan (KMI), Workday (WDAY) and TransDigm Group (TDG).

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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

Royal Dutch Shell (RDS.A) to Gain from Growing LNG Demand

Solid Investments, Cash Flow to Boost TOTAL's (TOT) Growth

BD Medical Drives Becton, Dickinson (BDX) Amid Forex Woes

Featured Reports

Kinder Morgan (KMI) Banks on PHP Project, Debts High

The Zacks analyst believes that the proposed Permian Highway Pipeline (PHP) project will help Kinder Morgan to cash in on Permian bottlenecks.

Workday (WDAY) Banks on HCM Capabilities & Cloud Platforms

Per the Zacks analyst, Workday's revenue growth continues to be driven by high demand for its cloud-based HCM and financial management solutions.

Acquisitions Aids TransDigm (TDG), Rising Debt Levels Hurt

Per the Zacks Analyst, TransDigm strengthens its position in proprietary aerospace components' niche markets, through strategic acquisitions.

Paychex (PAYX) Benefits From Oasis Buyout, Expenses High

Oasis Outsourcing adds to Paychex's top line. However, the Zacks analyst is worried about rising expenses due to PEO insurance costs, buyouts, investment in sales, marketing and product development.

Asset Growth Supports TD Ameritrade (AMTD), Cost Woes Linger

Per Zacks analyst, TD Ameritrade's efforts to increase net new client assets will likely boost revenue-growth.

Arch Capital (ACGL) Rides on Premium and Inorganic Growth

Per the Zacks analyst, rising premium on the back of a diverse product and service portfolio boosts Arch Capital's revenues while its inorganic growth is led by a strong capital position.

Strong Demand, DuPont Asset Buyout to Aid FMC Corp (FMC)

Per the Zacks analyst, FMC will gain from synergies of DuPont's crop protection asset acquisition and strong demand for its herbicide and insecticide products amid high raw material costs.

New Upgrades

Strong Contractor Segment to Drive Graco's (GGG) Revenues

Per the Zacks analyst, solid traction of Graco's Contractor segment, fueled by strength in construction markets in the Americas and Europe, Middle East & Africa regions, should drive its revenues.

ProAssurance (PRA) Banks on Inorganic Growth Initiatives

Per the Zacks analyst, a number of acquisitions made over the last few years, such as that of American Physicians Service Group and Medmarc have added to its capabilities, financial size and strength.

EcoPark & Franchise Business Drive Sonic Automotive (SAH)

Per the Zacks Analyst, EchoPark expansion is likely to boost Sonic Automotive's top-line growth. Further, its franchise business is also expected to grow organically via accretive acquisitions.

New Downgrades

FedEx (FDX) Hurt by High Costs and Express Division Weakness

The Zacks Analyst is concerned about the elevated costs, mainly at FedEx's Ground unit. Persistent lackluster performance of its major revenue-generating segment, FedEx Express, is also worrisome.

High Costs Weighs on Jack in the Box's (JACK) Margins

Per the Zacks analyst, higher costs related to marketing initiatives, unit expansion and higher commodity costs are expected to keep profits under pressure.

Operational Inefficiencies & High Leverage Ail Tenneco (TEN)

High cost of raw materials and increasing SG&A expenses are clipping the Tenneco's margins. The Zacks analyst is also concerned about the firm's high debt-to-capital ratio of 70%.

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Workday, Inc. (WDAY) : Free Stock Analysis Report
TOTAL S.A. (TOT) : Free Stock Analysis Report
Transdigm Group Incorporated (TDG) : Free Stock Analysis Report
Royal Dutch Shell PLC (RDS.A) : Free Stock Analysis Report
Kinder Morgan, Inc. (KMI) : Free Stock Analysis Report
Becton, Dickinson and Company (BDX) : Free Stock Analysis Report
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