Top Stock Reports for Microsoft, Union Pacific & Duke Energy
Tuesday, June 23, 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 Microsoft (MSFT), Union Pacific (UNP) and Duke Energy (DUK). 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 >>>
Microsoft’s shares have outperformed the S&P 500 over the past year (+46.9% vs. +5.9%). The Zacks analyst believes that Microsoft is benefiting from momentum in Azure, impressive Teams user growth led by coronavirus-induced work-from-home wave, uptick in Surface devices and significant demand for Windows 10 PCs.
Moreover, the company is gaining from growing user base of its different applications like Office 365 commercial, and Dynamics. Azure’s expanding customer base remains a key catalyst. Furthermore, it is well poised to expand the total addressable market through acquisitions of GitHub and PlayFab.
However, broader macroeconomic weakness and lower spend on advertising owing to the coronavirus outbreak are likely to weigh on LinkedIn and Search revenues. Further, delays in consulting business contract renewals and supply chain constraints in China are anticipated to limit growth.
(You can read the full research report on Microsoft here >>>)
Shares of Union Pacific have lost -5.6% over the past six months against the Zacks Rail industry’s fall of -6.5%. The Zacks analyst believes that the uptick in e-commerce demand in these coronavirus-ravaged times is aiding the company's parcel business immensely.
Union Pacific’s cost-cutting measures are aiding its bottom line. The company's ability to generate free cash flow is also a positive and supports its shareholder-friendly activities as well. In this respect, Union Pacific’s decision to continue paying out dividends despite the current turbulence is reflective of its strong cash flow-generating ability.
However, due to coronavirus-led disruptions, second-quarter 2020 volumes are expected to plunge close to 20%. Moreover, operating ratio will not improve in the June quarter despite the cost-controlling measures. Notably, the company withdrew its 2020 view with respect to operating ratio, headcount, volumes and buybacks due to the coronavirus woes.
(You can read the full research report on Union Pacific here >>>)
Duke Energy’s shares have gained +14.8% over the past three months against the Zacks Electric Power industry’s rise of +16.8%. The Zacks analyst believes that its unfavorable financial ratios indicate that the company may face difficulty in paying off its debt obligations, at least in the near term.
Duke Energy invests heavily in infrastructure and expansion projects. The company expects to invest $42.7 billion in its overall growth projects within the 2020-2024 time frame. Backed by its clean energy initiatives, the company plans to at least double its portfolio of renewables by 2025.
Duke Energy has been an industry leader in driving down methane emissions, which also forms part of its transition toward clean energy. However, the coronavirus pandemic has started to affect the company’s operations since the beginning of the second quarter. For 2020, the company expects a decline of 3-5% in total retail volumes.
(You can read the full research report on Duke Energy here >>>)
Other noteworthy reports we are featuring today include Apple (AAPL), Applied Materials (AMAT) and UBS Group (UBS).
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Sheraz Mian
Director of Research
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 & Office 365 Strength Aid Microsoft (MSFT)
E-Commerce Boosts Union Pacific (UNP) Amid Volume Weakness
Investment Plan Aids Duke Energy (DUK), Commodity Prices hurt
Featured Reports
Apple (AAPL) Banks on Services to Counter Weak iPhone Demand
Per the Zacks analyst, Apple's top line is expected to benefit from strength in the Services segment as iPhone sales are likely to decline due to negative impact of COVID-19.
Applied Materials (AMAT) Rides on Logic Spending, Risk Remain
Per the Zacks analyst, strength in semiconductor equipment and strong customer spending in foundry and logic remain growth drivers. However, slowdown in memory spending is a concern.
UBS Group (UBS) Exhibits Cost Control, Low Rates a Concern
Per the Zacks analyst, UBS Group's cost saving measures to drive operational efficiency are encouraging.
Productivity Actions, New Products to Aid DuPont (DD)
While DuPont faces headwind from muted demand in certain end-markets, it should gain from productivity improvement actions, per the Zacks analyst.
Energy Drinks Category Aids Growth at Monster Beverage (MNST)
Per the Zacks analyst, Monster Beverage is experiencing continued strength in its energy drinks category, which also aided results amid the coronavirus pandemic.
Eni (E) Banks on Offshore Agogo Oil Field, Debts High
Eni strengthens upstream operations with the commencement of production from the offshore Agogo oil field.
Macao to Aid Las Vegas Sands (LVS), Low Visitation a Concern
The Zacks analyst believes revenue diversification efforts and planned investment in new projects in Macao bode well for Las Vegas Sands.
New Upgrades
New Virtual Solutions Launch Aids Align (ALGN) amid Pandemic
Amid coronavirus mayhem, the Zacks analyst is bullish on Align's latest launches of two virtual clear aligner solutions that can help connect and provide care to existing Invisalign patients remotely.
WestRock (WRK) Bets on E-Commerce Demand & Acquisitions
Per the Zacks analyst, WestRock will gain on robust e-commerce demand amid the pandemic as well as KapStone and other acquisitions which have boosted its product offerings and geographic presence.
Acquisitions and Expansion Actions to Aid U.S. Silica (SLCA)
Per the Zacks analyst, U.S. Silica will benefit from expansion actions in the Permian Basin. Sandbox and EP Minerals buyouts will also support its margins.
New Downgrades
Store Closures and Rent Collection Woes to Hurt Simon (SPG)
The Zacks analyst is worried about shrinking traffic at Simon's retail assets, store shutdowns and tenant bankruptcy.
Disruptions Caused by Coronavirus Outbreak Hurts Jabil (JBL)
Per the Zacks analyst, weakness in Electronics Manufacturing Services (EMS) segment due to sluggish demand in automotive print and retail hurts Jabil.
Macy's (M) Top-Line Bears the Brunt of Store Closure
Per the Zacks analysts, coronavirus-induced store closure hurt Macy's business activities. The company posted soft preliminary numbers for first-quarter fiscal 2020, wherein net sales declined 45.2%.
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Union Pacific Corporation (UNP) : Free Stock Analysis Report
UBS Group AG (UBS) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Duke Energy Corporation (DUK) : Free Stock Analysis Report
Applied Materials, Inc. (AMAT) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
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