Top Stock Reports for ExxonMobil, Starbucks and Marsh & McLennan

Thursday, October 5, 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 ExxonMobil (XOM), Starbucks (SBUX) and Marsh & McLennan (MMC). 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 >>>

ExxonMobil’s shares have underperformed the Zacks Oil International Integrated industry (-9.4% vs. +0.8%) as well as peer Chevron (CVX was down -0.1%). Tensions between the U.S. and Russia could mar the integrated major’s prospects for exploiting huge Russian oil and gas reserves. Moreover, dependence on costly offshore drilling might dent ExxonMobil’s cashflow.

However, ExxonMobil has a leading position in the energy industry owing to the size and diversity of its asset base, both in terms of business mix and geographical footprint. With a stable cash position, the company’s balance sheet is one of the best in the industry. The company has been investing heavily in its extensive refining businesses, which will likely help it counter downturns in upstream businesses owing to volatile commodity prices. Also, ExxonMobil’s earnings surprise history is pretty attractive.

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

Starbucks’ shares are down -2.9% year to date, underperforming the Zacks Food & Restaurants industry, which is up +6.5% over the same period. The consequential increment in spending is likely to create pressure on its bottom line in the near term. Also, economic, geopolitical and consumer headwinds continue to impact Starbucks' results.

However, the company’s operating fundamentals such as solid global retail footprint, successful innovations, best-in-class loyalty program and digital offerings remain strong. Again, digital initiatives like mobile order/pay, delivery services and third-party loyalty partnerships can stimulate stronger sales trends in the Americas. CPG growth across the world as well as China/Asia expansion will also lead to value creation. These initiatives might benefit the company in the long run.

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

Shares of Buy-rated Marsh & McLennan have outperformed the Zacks Insurance Broker industry, year to date, gaining (+23.2% vs. +21.8%). The company is well poised for growth on the back of significant investments and acquisitions made within its different operating units.

These deals have enabled the company to enter new geographies, expand within the existing ones, foray into new businesses, develop new segments and specialize within existing businesses. Its effective capital management via share buyback and dividend payment is impressive.However, exposure to currency volatility due to high international presence and integration risks from acquisitions raises concerns. Also, low interest rates have suppressed investment income.

(You can read the full research report on Marsh & McLennan here >>>).

Other noteworthy reports we are featuring today include Waste Management (WM), Phillips 66 (PSX) and Intercontinental Exchange (ICE).

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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

Exxon's (XOM) Extensive Refining to Offset Costly Drilling

Starbucks (SBUX) Tackles Soft Sales With Product Innovation

Marsh & McLennan (MMC) Grows on Accretive Acquisitions

Featured Reports

Clovis' (CLVS) Growth Dependent on Rubraca, Expanding Label

Per the Zacks analyst, positive progression-free survival and safety results from ARIEL3 maintenance study may expand Rubraca's label and boost commercial uptake.

Fleet Upgrade Buoys Hawaiian Holdings (HA), High Costs Ail

The Zacks analyst likes the company's efforts to upgrade its fleet. Its performance with respect to unit revenues also raise optimism. Increased labor and fuel costs, however, raise concerns.

Subscriber Growth, Accretive Buyouts Drives Autodesk (ADSK)

According to the Zacks analyst, growing subscriber base along with robust portfolio of offering, accretive acquisitions and strong cash position are the key catalysts for Autodesk.

Phillips 66 (PSX) to Gain from Chemical Business, Debts High

Phillips 66 expects more value from its chemicals & midstream businesses than extensive refining operations. However, high dependence on debt financing will hurt the company, per the Zacks analyst.

Cimarex (XEC) Banks on Permian Acreage, Debt Burden Hurts

While Cimarex Energy's Permian Basin and Mid-Continent premium acreages bode well, the covering analyst is worried about the company's high-debt burden.

Waste Connections (WCN) Gains from Progressive Waste Merger

Per the Zacks analyst, Waste Connections has optimal asset positioning to generate higher profitability, while its merger with Progressive Waste Solutions has further enhanced the scale of operations.

Intercontinental (ICE) Grows on Solid Global Data Services

Per the Zacks analyst strength in global data services including pricing and analytics, and connectivity services across several asset classes should help Intercontinental grow its revenues.

New Upgrades

Winnebago (WGO) Rides on Expanded Motorhome Capacity

Winnebago is expanding motorhome capacity to boost the production of Class A gas & Class C motorhomes. Per the Zacks analyst, rising demand and higher retail activity can be attributed to this.

New Products, Acquisitions Support Ameriprise (AMP) Growth

Per the Zacks analyst, Ameriprise's efforts in launching new products to keep pace with dynamic market needs will support revenues. Also, the company's inorganic growth plan will aid profitability.

United Rentals (URI) Gains From Acquisition of NES Rentals

According to the Zacks analyst, United Rentals' acquisition of NES Rentals is likely to further boost revenues, earnings, EBITDA, free cash flow and expand the company's overall scale.

New Downgrades

ArcelorMittal (MT) Hurt by Weak Iron Ore & Steel Prices

Per the Zacks analyst, falling iron ore prices due to concerns over Chinese demand and lower steel prices pose concerns for ArcelorMittal. Weak demand in the United States & Brazil is another concern.

Waste Management (WM) Plagued by Pricing Wars & Regulations

Per the Zacks analyst, Waste Management remains stifled due to aggressive bidding by smaller competitors, continued decline in average recycling commodity prices and stringent government regulations.

Cat Losses Dilute Assurant's (AIZ) Underwriting Income

Per the Zacks analyst, the underwriting profitability will be hurt by the losses from the Hurricanes. Assurant projects loss between $134 million and $140 million to impact Global Housing the most.

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Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
 
Waste Management, Inc. (WM) : Free Stock Analysis Report
 
Starbucks Corporation (SBUX) : Free Stock Analysis Report
 
Phillips 66 (PSX) : Free Stock Analysis Report
 
Marsh & McLennan Companies, Inc. (MMC) : Free Stock Analysis Report
 
Intercontinental Exchange Inc. (ICE) : Free Stock Analysis Report
 
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