Tuesday, March 7 2017
Today's Research Daily features new research reports on 16 major stocks, including Exxon Mobil (XOM), United Parcel Service (UPS), and Facebook (FB).
Exxon Mobil shares tracked the S&P 500 index through year-end 2016, but have lagged the broader index as well as the peer super majors group in the year-to-date period, likely reflecting the company's perceived defensiveness that disadvantages it relative to its 'oilier' peers. Exxon's resilient integrated business model has long been the industry gold standard, which makes it an attractive and relatively low-risk Energy sector option for many investors. ExxonMobil has been investing in new refining and chemical manufacturing facilities along the U.S. Gulf Coast to enhance manufacturing and export capacity. The company started investing in 2013 and anticipates to continue investing through 2022. The company is likely to spend $20 billion over a 10-year span. A fortress balance sheet, an attractive and totally safe dividend and a history of returning excess cash to shareholders are some of the other positives in the Exxon story. The Zacks analyst discusses the pros & cons of investing in Exxon shares in the updated research report issued today. (You can read the full research report on Exxon Mobil here >>)
UPS shares gained only +5.5% in the last one year, significantly underperforming the Zacks Transportation-Air Freight industry that recorded a +15.4% increase. Shares of the Hold-rated UPS have lagged those of rival FedEx, which appreciated +36.1% in the same time span. A big part of the stock's underperformance started following the company's weak Q4 results in late January that showed higher costs of package deliveries during the holiday rush. The company's disappointing view for full-year 2017 has also been a big dampener. On the flip side, the Zacks analyst likes the company’s decision to hike its quarterly dividend and efforts to expand operations. On the valuation front, while UPS's forward 12-month P/E multiple has come down following the stock's post-Q4 results sell off, it still trades at a premium to peer FedEx. (You can read the full research report on United Parcel Service here >>)
Facebook shares lagged the S&P 500 index following the election, but have more than made up for that underperformance since the start of 2017 - the stock is up +19.6% in the year-to-date period vs. +6.3% gain for the index in that time period. Helping the stock's recent momentum has been the strong fourth quarter earnings report where it beat expectations on the back of live video, mobile and other key areas. Despite strong results, Facebook, as expected, maintained a cautious stance on future growth prospects. Perhaps far more important to the market is the long-term opportunity for Facebook through monetization of key properties like Instagram, Messenger, WhatsApp and Oculus. The prospect of higher engagement levels of its a huge user base is another key positive in the Facebook story. The company is also dabbling in AR/VR and AI technologies, which also bode well for growth. (You can read the full research report on Facebook here >>)
Other noteworthy reports we are featuring today include Toyota Motor (TM), Twenty-First Century Fox (FOXA) and Yum! Brands (YUM).
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Director of Research
Note: Note: Sheraz Mian regularly provides earnings analysis on Zacks.com and appears frequently in the print and electronic media. His weekly earnings related articles include Earnings Trends and Earnings Preview. Note: If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today's Must Read
ExxonMobil (XOM) to Spend $20B on Gulf Coast Developments
United Parcel (UPS) Rewards Shareholders with Dividend Hike
Facebook's (FB) Live Video & Mobile Efforts are Big Positives
Toyota (TM) Q3 Earnings Beat Estimates; Guidance Weak
The covering analyst thinks Toyota will gain from new products and expansion in emerging markets but falling sales outside Japan and rising recalls are headwinds.
21st Century Fox (FOXA) Beats on Q2 Earnings, Cost Woes Linger
The Zacks analyst thinks 21st Century Fox has outperformed the industry in the past three months, driven by three straight quarters of earnings beat.
Dollar Tree (DLTR) Q4 Earnings & Sales Up from Last Year
The covering analyst believes Dollar Tree's solid results were backed by increased traffic and reduced expenses. Also, fiscal 2016 results were impressive.
Yum! Brands (YUM) Set to Grow Post China Division Separation
Yum! Brands focus on the development of its three iconic global brands, increasing its franchise ownership and efficiency should aid in subsidizing the effects of the spin-off, per the Zacks analyst.
Alaska Air (ALK) Tentatively Awarded Mexico City Slots
The Zacks analyst is pleased by the recent Mexico City slots awarded by DOT. Moreover, the Virgin America acquisition is a big positive. However, integration risks remain.
Dr Pepper (DPS) Lags Q4 Earnings, Initiatives to Spur Growth
The covering analyst believes innovations, productivity improvements and aggressive media campaigns will drive solid growth.
BioMarin (BMRN) Q4 Loss Narrows; Focus on Brineura
The covering analyst stresses that Biomarin's pipeline is on track with the Brineura launch expected this year.
Juno (JUNO) Q4 Sales Beat Estimates; Discontinues Cancer Drug Study
Though Juno's Q4 loss is slightly wider than expected, its sales beat estimates. However, discontinuation of study on its cancer drug JCAR015 may hurt investors' sentiment.
CBRE Group (CBG) Rides on Acquisitions and Partnerships
The Zacks analyst thinks CBRE Group's persistent efforts to broaden its service offerings and focus on strategic acquisitions and partnerships are aiding its growth momentum.
Broadcom (AVGO) Poised to Grow on Strong Q1 Results
According to the covering analyst, Broadcom's Q1 results reflect continuing synergistic benefits from the merger with Avago, which is further expected to drive profitability going ahead.
CBOE Holdings' (CBOE) Increasing Expenses Raise Concerns
The Zacks analyst believes that CBOE Holdings' exposure to stiff competition and escalating expenses will continue to pose risks for the company.
SeaDrill (SDRL) Shares Plunge Amid Bankruptcy Fears
The covering analyst has turned bearish on SeaDrill on concerns that the heavily indebted offshore rig supplier is on the brink of bankruptcy.
Interactive Brokers (IBKR) Concerns Still Linger; DARTs Down
The Zacks analyst thinks high competition and dismal performance of the Market Making segment may hurt Interactive Brokers financials. Moreover, a fall in February DARTs makes us more apprehensive.
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Yum! Brands, Inc. (YUM): Free Stock Analysis Report
Exxon Mobil Corporation (XOM): Free Stock Analysis Report
United Parcel Service, Inc. (UPS): Free Stock Analysis Report
Toyota Motor Corp Ltd Ord (TM): Free Stock Analysis Report
Twenty-First Century Fox, Inc. (FOXA): Free Stock Analysis Report
Facebook, Inc. (FB): Free Stock Analysis Report
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