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Top Stock Reports for IBM, Duke Energy & General Dynamics

Mark Vickery
Top Stock Reports for IBM, Duke Energy & General Dynamics

Tuesday, February 26, 2019

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 IBM (IBM), Duke Energy (DUK) and General Dynamics (GD). 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 >>>

IBM’s shares have outperformed the broader market on a year-to-date basis, increasing 22.7% vs the S&P 500’s 11.5% gain. IBM provides advanced information technology solutions, including computer systems, software, storage systems and microelectronics.

The Zacks analyst thinks IBM’s improving position in the hosted cloud, security and analytics bodes well for investors. RedHat acquisition aimed at enhancing hybrid cloud platform is likely to pave the way for IBM's growth prospects. However, softness in Systems revenues and technology & cloud platforms remain a concern.

Stiff competition does not bode well for Storage hardware segment. Strategic imperatives will take some more time to report meaningful growth and offset weakness in the traditional business. IBM’s ongoing heavily time-consuming business model transition to cloud is a headwind. Additionally, ballooning debt levels have been troubling IBM over time.

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

Shares of Duke Energy have outperformed the S&P 500 in the past six months, gaining 11% vs -3.5%. Duke Energy ended the fourth quarter of 2018 on a mixed note. While the company’s earnings missed expectations, revenues surpassed the same.

The company invests heavily in infrastructure and expansion projects. It expects to invest about $37 billion in its overall growth projects in the 2019-2023 time frame. The Zacks analyst thinks this investment plan will drive earnings base growth in the company’s combined electric and gas businesses by approximately 6%, over the next five years.

However, the company faces challenges from severe weather conditions and natural calamities, which may result in breakdowns and damage to its infrastructure. Potential volatility in market prices of fuel, electricity and other renewable energy commodities could create operational risks.

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

General Dynamics’ shares have lost 11.3% in the past six months, underperforming the S&P 500's decrease of 3.5%. General Dynamics boasts a strong position in the U.S. defense space and overseas. The budgetary amendments, which were made last year, have been in favor of the company’s business line.

The Zacks analyst thinks that apart from solid demand for its varied defense products leading to organic growth, a notable acquisition strategy also adds significant value to General Dynamics’ inorganic growth. However, the company is susceptible to interest rate risk related to the issuance of debt.

A material rise in long-term interest rates is a major risk for capital intensive stocks like General Dynamics. With the current U.S. economy being in favor of the expanding interest rate, the credit market may not be too favorable for General Dynamics.

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

Other noteworthy reports we are featuring today include Hewlett Packard (HPE), PACCAR (PCAR) and Rockwell Automation (ROK).

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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

Adoption of Cloud, Security & Analytics Solutions Aids IBM

Investment Plan Aids Duke Energy (DUK), Commodity Prices Hurt

Rising Demand Aids General Dynamics (GD), Rising Cost Hurts

Featured Reports

Robust Truck Demand Drives PACCAR (PCAR) Amid High Costs

Per the Zacks analyst, strong truck demand backed by growing economies and freight transport activity drives PACCAR. However, material and labor costs due to supplier constraints are woes.

Industrial Spending Drives Rockwell (ROK), Higher Costs Ail

Per the Zacks analyst, higher industrial capital spending, investment in new products and acquisitions will likely drive growth despite higher material costs.

High Expenses Hurt Copart (CPRT) Amid Network Expansion

Per the Zacks analyst, rise in general and administrative expenses, due to acquisitions is a concern before Copart.

Teleflex's (TFX) Urolift Adoption Robust, New Buyouts Aid

The Zacks analyst looks forward to Teleflex's NeoTract business that is showing impressive growth momentum banking of global adoption of Urolift system.

ONETractor Initiative to Drive Tractor Supply's (TSCO) Sales

Per the Zacks analyst, Tractor Supply's investments in the ONETractor initiative should aid top line growth in the long run.

Investments, Clean Energy Focus Aid Alliant Energy (LNT)

Per the Zacks analyst Alliant Energy's plan to invest $5B for strengthening its electric, natural gas distribution lines and produce more power from clean sources will boost its performance.

Restructuring Initiatives to Aid Molina Healthcare (MOH)

Per the Zacks analyst, its restructuring plans should improve its efficiency by streamlining organizational structure.

New Upgrades

Hewlett Packard (HPE) Benefits From Intelligent Edge Growth

Per the Zacks analyst, solid growth in Aruba Services is driving Hewlett Packard's Intelligent Edge segment, which is helping it maintain its leadership position in the high growth-opportunity market.

Lease Fleet Growth, Dividends, Buybacks Aid Trinity (TRN)

The Zacks analyst likes the company's efforts to reward shareholders through dividends & buybacks. Growth of its lease fleet also raises optimism in the stock.

Fleet Upgrade & Ticket Revenues Aid Norwegian Cruise (NCLH)

The Zacks analyst appreciates the company's efforts to modernize its fleet. Increase in passenger ticket revenues on the back of robust demand for cruise travel also raises optimism in the stock.

New Downgrades

Teva (TEVA) Hurt by Copaxone Generics and Generic Unit Woes

Teva's challenges in the form of generic competition for Copaxone and some other branded drugs, pricing erosion in the U.S. generics business and a massive debt load worry the Zacks analyst.

Rising Costs & Forex Woes Impede Henry Schein's (HSIC) Growth

The Zacks analyst is worried about Henry Schein's declining gross and operating margins due to higher expenses. Also, unfavorable foreign exchange continues to hurt revenues.

Higher Input Costs Weigh on Gibraltar's (ROCK) Margins

Per the Zacks analyst, higher input cost inflation has been compressing Gibraltar's margin to some extent. The steel and aluminum tariffs announced in 2018 continues to impact its material costs.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Rockwell Automation, Inc. (ROK) : Free Stock Analysis Report
PACCAR Inc. (PCAR) : Free Stock Analysis Report
International Business Machines Corporation (IBM) : Free Stock Analysis Report
Hewlett Packard Enterprise Company (HPE) : Free Stock Analysis Report
General Dynamics Corporation (GD) : Free Stock Analysis Report
Duke Energy Corporation (DUK) : Free Stock Analysis Report
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