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Top Research Reports for Today: MCD, KO, TMUS

Mark Vickery

Wednesday April 26, 2017

Today's Research Daily features new research reports on 16 major stocks, including McDonald's (MCD), Coca-Cola (KO) and T-Mobile (TMUS).

McDonald's shares have gained +26.4% over the last six months easily outperforming many of its peers which have been struggling to survive the restaurant space’s tough operating environment lately. McDonald’s Q1 earnings and revenues exceeded expectations, but revenues fell year over year mainly due to the impact of refranchising.

Meanwhile, the company recorded the seventh consecutive quarter of global comps growth. The Zacks analyst likes the company’s attempts to attract customers in international lead markets as the positive global comps over the past 7 quarters show. Increased focus on refranchising will cut the company’s capital requirements and facilitate EPS growth and ROE expansion over the long-term. On the flip side, higher labor costs, currency headwinds and concerns about the efficiencies of an ever expanding menu remain issues. (You can read the full research report on McDonald's here.)

Shares of Coca-Cola have gained +3.9% in the year-to-date period underperforming the Zacks Consumer Staples sector as a whole, which has gained +8.4%. Coca-Cola failed to meet earnings expectations in the first quarter of 2017. Earnings also decreased year over year due to higher costs related to refranchising efforts in Coca-Cola's North America bottling operations.

Further, Coca-Cola's total sales fell 11%, marking the eighth consecutive quarterly decline in revenue. But the Zacks analyst likes the company’s efforts in boosting its current productivity and reinvestment program that is expected to generate an incremental $800 million in annualized savings by 2019.

This brings the total annualized savings target of its six-year program to $3.8 billion. Though refranchising efforts will hurt sales/profits in the near term, the company will see higher operating margins, lower capital spending, and improved return on invested capital in the long run. (You can read the full research report on Coca-Cola here.)

T-Mobile shares have been strong performers lately - the stock is up +69.6% over the last 12 months, handily outperforming the Zacks National Wireless industry (up +5%) and the broader Zacks Telecom Services industry (down -0.4%). T-Mobile US posted strong first quarter 2017 financial results with net customer additions of 1.142 million.

Driving this outperformance is the success of the carrier's cultivation of an 'insurgent' persona through promotional measures like the 'Un-carrier' initiatives. Being the fourth national carrier, the company regularly gets mentioned in industry consolidation rumors, which helps the stock price.

The Zacks analyst also likes the company's network expansion plans such as 5G trials with Ericsson as well as 4G LTE network improvement and expansion. On the flip side, T-Mobile US operates in a highly competitive and saturated wireless market where it has to work hard to maintain its growth momentum. (You can read the full research report on T-Mobile here.)

Other noteworthy reports we are featuring today include PPG Industries (PPG), Crown Castle (CCI) and Corning (GLW).

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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

McDonald's (MCD) Q1 Earnings Beat on Solid Comps Growth

Coca-Cola (KO) Lags Earnings on Refranchising Cost

T-Mobile US (TMUS) Tops Q1 Earnings & Revenue Estimates

Featured Reports

PPG Industries (PPG) Q1 Earnings Top Amid Uneven Demand

PPG's earnings and sales beat estimates in Q1. While PPG faces currency headwind and demand weakness in some markets, it should gain from acquisitions and restructuring actions, per the Zacks analyst.

Crown Castle (CCI) Beats on Earnings and Revenues in Q1

The covering analyst thinks Crown Castle's extensive tower portfolio and continuous buyout of towers might have driven the company's outperformance.

Dover (DOV) Tops Q1 Earnings, '17 View Up Amid Headwinds

The Zacks Analyst expects Dover to gain from buyouts, solid hygienic & pharma markets, and recovery in North America rig count. Low capital spending & weak retail refrigeration business pose concerns.

Stanley Black (SWK) Tops Q1 Earnings, Ups View

Stanley Black & Decker's first-quarter 2017 earnings and sales beat respective Zacks Consensus Estimate by 8.4% and 2.3%. For 2017, it raised its earnings forecast to $7.08-$7.28 per share.

Ameriprise (AMP) Q1 Results Show Persistent Revenue Growth

The Zacks analyst thinks Ameriprise is focused on revenue growth driven by its efforts in launching new products and through strategic acquisitions

Corning (GLW) Beats on Q1 Earnings & Revenue Estimates

The covering analyst thinks the first-quarter 2017 results were driven by strength in the company's Optical Communications and Specialty Materials business lines.

Juniper (JNPR) Beats Q1 Earnings on Strong Cloud Growth

According to the Zacks analyst, Juniper has significant growth opportunity based on the strong adoption of its cloud products (particularly in data center) and QFX Switch line.

New Upgrades

Rockwell Collins (COL) Tops Q1 Earnings, Ups '17 Sales View

The Zacks analyst thinks steady investments drove Q1 sales and earnings numbers for Rockwell Collins. The acquisition of B/E Aerospace has also boosted the growth prospects of the company.

Nielsen (NLSN) Q1 Earnings Fall Y/Y, Revenues Miss Estimates

Despite lower-than-expected Q1 earnings, the covering analyst believes that continued dividend payment and share repurchase reflect Nielsen's commitment to return value to its shareholders.

PulteGroup (PHM) Tops Q1 Earnings, Housing Market Positive

Pulte's earnings surpassed analysts' expectations by 10.7%. Per the Zacks analyst, positive housing market fundamentals coupled with favorable trends in the economy will boost homebuilders' top line.

New Downgrades

Mattel (MAT) Continues to be Riddled with Challenges Post Q1

Retail inventory overhang, weak performance of some segments and brands, and macroeconomic and forex woes dampened Mattel's Q1 results, per the Zacks analyst. We do not see much improvement ahead.

Nordstrom (JWN) Continues to Battle Macroeconomic Headwinds

The covering analyst thinks Nordstrom's presence in the consumer-driven apparel space exposes it to the risks of changing consumer tastes and volatile spending. Also, stiff competition is a threat.

MetLife (MET) Hurt by High Auto Loss, Fights for SIFI

The Zacks analyst thinks uncertainty regarding the SIFI status, high loss in auto insurance business, sluggish core growth, currency fluctuations, intensifying competition remain lingering concerns.

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T-Mobile US, Inc. (TMUS): Free Stock Analysis Report
PPG Industries, Inc. (PPG): Free Stock Analysis Report
McDonald's Corporation (MCD): Free Stock Analysis Report
Coca-Cola Company (The) (KO): Free Stock Analysis Report
Corning Incorporated (GLW): Free Stock Analysis Report
Crown Castle International Corporation (CCI): Free Stock Analysis Report
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