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Top Stock Reports for Estee Lauder, BNY Mellon & Canadian Pacific Railway

Mark Vickery

Wednesday, January 15, 2020

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 Estee Lauder (EL), Bank of New York - Mellon (BK) and Canadian Pacific Railway (CP). 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 >>>

Estee Lauder’s shares have outperformed the Zacks Cosmetics industry over the past year (+72.3% vs. +58.6%). The Zacks analyst believes that the company has been gaining from growth across most brands and sales channels. The trend continued in first-quarter fiscal 2020, wherein both top and bottom lines surpassed estimates and rose year on year.

Performance was supported by growth in emerging markets, travel retail and online sales. Further, management provided an optimistic view for fiscal 2020. However, the company is witnessing certain headwinds such as soft retail trends in the United States and the U.K., costs related to Brexit and tariff impacts in China.

Additionally, challenges in Hong Kong’s retail environment are expected to continue through fiscal 2020. Moreover, adverse currency movements are a concern.

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

Shares of BNY Mellon have gained +14.8% in the past three months against the Zacks Major Regional Banks industry's rise of +12.6%. The Zacks analyst believes that global diversification efforts and prudent cost management initiatives will aid the bank’s financials.

The company has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters. Moreover, earnings estimates have been going up ahead of its fourth quarter 2019 results.

Impressive capital-deployment actions reflect a strong balance sheet position. Yet, the Federal Reserve’s accommodative monetary policy along with reduced client activities and low volatility are likely to hurt revenues going forward. Concentration risk arising from significant dependence on fee-based revenues could alter BNY Mellon’s financial position if there is any change in individual investment preferences.

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

Canadian Pacific Railway's shares have gained +6.3% over the past six months against the Zacks Rail industry's rise of +0.9%. The Zacks analyst believes that this was mainly due to prudent cost management. With consistent cost containment, the company’s operating ratio has been improving.

Its measures to add shareholder value are also appreciative. Under a normal course issuer bid (for which it received acceptance in December 2019), the company can purchase up to 4.8 million shares. Canadian Pacific’s buyout of Central Maine & Quebec Railway is a further positive.

However, Canadian Pacific experienced weak volumes in the fourth quarter amid macroeconomic headwinds and geopolitical tensions. Moreover, poor harvest weather in Canada is hurting grain volumes significantly. The company’s high debt levels and capital expenditures also add to its woes. Capex is projected to have been C$1.6 billion in 2019.

(You can read the full research report on Canadian Pacific Railway here >>>)

Other noteworthy reports we are featuring today include AvalonBay (AVB), McKesson (MCK) and Ameriprise Financial (AMP).

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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

Solid Travel Retail Business to Fuel Estee Lauder (EL) Sales

Cost Savings Efforts Support BNY Mellon (BK) Amid Low Rates

Cost-Cuts Aid Canadian Pacific (CP) Amid Volume Softness

Featured Reports

Rising Household Formation Boosts AvalonBay's (AVB) Leasing

Per the Zacks Analyst, AvalonBay leasing will benefit from its high-quality assets, favorable demographics and rising household-formation trends.

U.S. Pharmaceutical Arm Aids McKesson (MCK), Competition Rife

Solid prospects in the core U.S. Pharmaceutical unit aids McKesson. The Zacks Analyst is however apprehensive about the stiff competition in the MedTech space.

Restructuring Efforts Aid Ameriprise (AMP), High Costs a Woe

Per the Zacks analyst, Ameriprise's well-diversified portfolio, and its restructuring and streamlining efforts will aid revenues.

Wynn Resorts (WYNN) Rides on Non-Gaming Revenues Amid Debt

The Zacks analyst believes that Wynn Resorts is likely to gain from robust non-gaming business and increasing visitation pattern in Las Vegas.

Solid Digital Business, Acquisitions Aid DXC Technology (DXC)

Per the Zacks analyst, DXC Technology is gaining from solid digital business, which was boosted by the acquisition of Luxoft.

Loan Growth Supports BOK Financial (BOKF), High Costs A Woe

Per the Zacks analyst, BOK Financial reflects organic growth with escalating loan balances. Moreover, expansion moves bolster its growth prospects.

Returns-Focused Growth Strategies to Benefit KB Home (KBH)

Per the Zacks analyst, continued progress of the Returns-Focused Growth plan, land acquisitions along with declining mortgage rates and steady economic growth are expected to drive growth for KB Home.

New Upgrades

Imperial (IMO) to Gain from Cold Lake and Syncrude Projects

The Zacks analyst likes Imperial Oil's strong execution and ramped-up activities in Cold Lake and Syncrude and expects it to deliver solid production growth thereby boosting its future earnings.

New Mines, Low Debt & High Gold Prices Aid Royal Gold (RGLD)

Per the Zacks analyst, Royal Gold will benefit from higher gold prices, ramping up of new mines as well as efforts to cut down debt levels.

Strong Demand in Infrastructure Segment to Aid Lindsay (LNN)

Per the Zacks analyst, Lindsay will gain from the momentum in infrastructure segment backed by demand for Road Zipper projects and the Foundation for Growth initiative.

New Downgrades

High Debt & Pricing Pressure Hurts Western Digital (WDC)

Per the Zacks analyst, Western Digital is grappling with sluggishness in client compute hard drives demand, ballooning debt levels and stiff competition from storage peers like Seagate.

Rising Cost Impact LendingTree's (TREE) Bottom-line Growth

Per the Zacks analyst, LendingTree's bottom-line remains under pressure due to persistent rise in expenses on account of investments in product development, and advertising-related costs.

Higher Promotions to Hurt Urban Outfitters' (URBN) Margins

Urban Outfitters cautioned about weaker-than-expected fourth-quarter gross profit margin. Per the Zacks analyst, higher promotional activity in apparel is likely to have weighed upon gross margin.

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McKesson Corporation (MCK) : Free Stock Analysis Report
The Estee Lauder Companies Inc. (EL) : Free Stock Analysis Report
Canadian Pacific Railway Limited (CP) : Free Stock Analysis Report
The Bank of New York Mellon Corporation (BK) : Free Stock Analysis Report
AvalonBay Communities, Inc. (AVB) : Free Stock Analysis Report
Ameriprise Financial, Inc. (AMP) : Free Stock Analysis Report
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