Top Stock Reports for Disney, United Parcel Service & U.S. Bancorp

Monday, January 14, 2018

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 Disney (DIS), United Parcel Service (UPS) and U.S. Bancorp (USB). 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 >>>

Disney’s shares have increased +0.1% over the past year, outperforming the Zacks Media Conglomerates industry’s -1.2% decline in that same time period. The Zacks analyst thinks blockbuster performance of Disney movies at the box office is aiding Studio segment growth.

Moreover, the company’s top line is expected to benefit from the solid line-up of big budget movies slated to be released over the next 18 months. Solid content portfolio at ESPN+ as well as impressive Disney+ original content line-up, expected to release in 2019, is also expected to win subscribers rapidly. However, Disney’s ongoing investments in its technology platform are expected to keep margins under pressure.

Additionally, higher programming costs at ESPN remains a concern. Higher labor-related costs and softness experienced in tourism and consumer confidence in China are likely to impact Parks & Resorts segment in the near term.

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

Shares of United Parcel Service have outperformed the Zacks Transportation - Air Freight and Cargo industry over the past year, losing -27% vs. -30.9%. The Zacks analyst expects United Parcel Service's bottom line in the fourth quarter of 2018 to be hurt by high costs. Detailed results should be out on Jan 31.

UPS' high capital expenditures are pushing up costs. For 2018, capital expenditures are projected between $6.5 billion and $7 billion, representing an increase in excess of 100% from 2016 levels. With the company having Chinese exposure, trade disputes between United States and China also represent a headwind for UPS.

On the other hand, robust e-commerce growth is a major tailwind for the company and should aid the top line in the fourth-quarter. The company’s efforts to reward investors through share buybacks and dividend payouts are also impressive. Additionally, the current tax law is a boon for U.S. based transportation companies like UPS.

(You can read the full research report on United Parcel Service here >>>).

U.S. Bancorp’s shares have outperformed the Zacks Major Banks industry over the past six months, losing -7.5% vs -13.5%. The company possesses an impressive earnings surprise history, beating expectations in all the trailing four quarters. Earnings estimates have remained stable lately, ahead of the company's fourth quarter 2018 results.

The Zacks analyst thinks U.S. Bancorp's prospects will likely get support from its solid business model, core franchise, lower tax rate, rising interest rate and diverse revenue streams. Also, its organic growth remains solid and will likely benefit from the improving economic scenario.

U.S. Bancorp remains well poised to grow through acquisitions. However, escalating expenses due to its ongoing investments in technology and likely increase in legal expenses remain concerns.

(You can read the full research report on U.S. Bancorp here >>>).

Other noteworthy reports we are featuring today include State Street (STT), Constellation Brands (STZ) and Tyson Foods (TSN).

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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

Robust Parks & Resorts, Studio Strength Drives Disney (DIS)

UPS Buoyed by e-Commerce Growth, High Capex a Woe

Loan Growth Supports U.S. Bancorp (USB), Cost Woes Linger

Featured Reports

Volatility in Pork & Chicken Market Worries Tyson Foods (TSN)

Per the Zacks analyst, volatility in domestic and export prices of pork and chicken are likely to hurt Tyson Foods. Nevertheless, lucrative buyouts and savings initiatives are major postiives.

Pricing Aids Cincinnati Financial (CINF), Cat Loss Worrying

Per the Zacks analyst, Cincinnati Financial is well poised on improved pricing at both its personal and commercial auto segments and other strategic initiatives. However, cat loss induces volatility.

Ubiquiti (UBNT) Rides on Demand Uptrend Amid Trade Concerns

Per the Zacks analyst, rising demand for UniFi products, including switches and security gateways, should continue to drive Ubiquiti's top line despite probable impact of tariffs from Chinese imports.

Nektar's (NKTR) Oncology Deals Fuels Growth Amid Competition

Per the Zacks analyst, Nektar's oncology deals with large pharma companies bodes well for growth its as they generate significant income.

Business-Transformation Aids AptarGroup (ATR) Amid Inflation

Per the Zacks analyst, AptarGroup will gain from focus on business-transformation plan and product innovation.

New Launches Aid Myriad Genetics (MYGN) Amid Forex Woes

The Zacks analyst is optimistic about Myriad Genetics seeing strong testing volumes from new products like GeneSight and prenatal tests.

Fleet Upgrade Aids Hawaiian Holdings (HA), Capacity Woes Ail

The Zacks analyst likes the company's efforts to modernize its fleet. Efforts to reward shareholders are also encouraging.

New Upgrades

Natural Gas System Expansion, Investments Aid CMS Energy

Per the Zacks analyst, CMS Energy's deployment of $4.9 billion for its natural gas system expansion along with robust investment in infrastructure development will stimulate earnings growth.

TransCanada (TRP) to Gain from C$36B Secured Growth Program

The Zacks analyst believes that TransCanada's C$36 billion of accretive growth projects should support the company's stated dividend growth commitment of 8-10% annually up to 2021.

Domino's Pizza (DPZ) Rides on Robust International Sales

Per the Zacks analyst, Domino's remains committed to accelerate its presence in international markets. Third-quarter 2018 marked the 99th straight quarter of positive international same-store sales.

New Downgrades

Constellation Brands' (STZ) Soft Guidance Worries Investors

Per the Zacks analyst, Constellation's soft fiscal 2019 earnings view due to expectations of higher Canopy Growth-related interest expense and softness in wine & spirits business makes investors wary.

Uncertain Capital Markets, Expenses Hurt State Street (STT)

The Zacks analyst believes that uncertainty about the capital markets performance, which impacts State Street's trading services revenues, and increasing operating expenses are the primary concerns.

Higher Land & Labor Costs Weigh on KB Home's (KBH) Margins

Per the Zacks analyst, rising labor costs are threatening KB Home's margins. Also, land prices are increasing rapidly due to scarcity, which is denting its performance.

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