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Top Stock Reports for NextEra Energy, T-Mobile & Petrobras

Mark Vickery
Top Stock Reports for NextEra Energy, T-Mobile & Petrobras

Friday, March 15, 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 NextEra Energy (NEE), T-Mobile (TMUS) and Petrobras (PBR). 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 >>>

Buy-ranked NextEra Energy’s shares have outperformed the Zacks Electric Power industry in the past year, gaining +18.6% vs +14%. The Zacks analyst thinks NextEra Energy’s investments to strengthen its infrastructure and ongoing capital projects, on completion, will help in serving the expanding customer base more efficiently.

The expansion of business through strategic acquisitions has positively impacted earnings. However, the company’s nature of business is subject to complex and comprehensive federal, state and other regulations. Substantial investments are undertaken to ensure the safety of nuclear operations. That said, the risk of unplanned outages remains, which could derail its normal operations and impact profitability.

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

Shares of T-Mobile have outperformed the Zacks National Wireless industry over the past year, gaining +11.7% vs. +0.9%. T-Mobile has received shareholder approval for its merger with Sprint. This is a step forward in creating the New T-Mobile through which the wireless carrier aims to bring robust competition to the 5G era.

The New T-Mobile would have about 127 million customers and a strong closing balance sheet. The company has also collaborated with Ericsson and Nokia to accelerate the deployment of a nationwide 5G network. The Zacks analyst thinks T-Mobile’s network expansion strategy continues to be superior to its rivals.

However, a highly competitive and saturated U.S. wireless market remains a major headwind. Intensifying competition could limit the company’s ability to attract and retain customers and may adversely affect its operating results. T-Mobile launched several low-priced service plans which have enhanced revenues but not significantly improved the bottom line.

(You can read the full research report on T-Mobile here >>>).

Petrobras’ shares have outperformed the Zacks Emerging Markets Integrated Oil industry over the past three months, gaining +23.1% vs. +15.5%. While Petrobras recently reported weaker-than-expected Q4 earnings triggered by lower production, impairments and legal charges, results were strong overall.

In particular, Petrobras' upstream profit soared year over year thanks to steady commodity price recovery that lead to meaningful improvements in net income and EBITDA. The Zacks analyst thinks the largest oil company in South America also stands to benefit from Brazil’s economic growth and huge pre-salt oil reserves.

However, it was another quarter that production weakness clipped profits and cut into overall gains from rising oil prices. Moreover, the company's downstream business – consisting of the refining and marketing activities – suffered from weak oil products sales margins.

With the largest debt load in the oil industry, coupled with years of mismanagement and corruption, investors are advised to wait for a better entry point before buying shares.

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

Other noteworthy reports we are featuring today include Intuitive Keurig Dr Pepper (KDP), Carnival (CCL) and United Continental (UAL).

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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

Improving Economy, Investments Aid NextEra Energy (NEE)

Subscriber Growth to Drive T-Mobile (TMUS) Amid Competition

Pre-Salt Reserves Boosts Petrobras (PBR), Debt Pile Hurts

Featured Reports

Market Share Gains Aid Keurig Dr Pepper's (KDP) Top Line

Per the Zacks analyst, market share gains for Keurig Dr Pepper's CSD portfolio, single-serve coffee and cold beverage categories aided sales in 2018. Sales for 2019 are likely to improve 2%.

Passenger Revenues Aid United Continental (UAL), Costs Ail

The Zacks analyst likes the growth in passenger revenues driven by robust demand for air travel. High operating expenses and debts, however, raise concerns.

Promising Pipeline Fuels bluebird (BLUE) Amid Stiff Competition

Per the Zacks analyst, bluebird's pipeline of gene therapies and collaborations with big biotechs is a positive.

Inorganic Growth Aids RenaissanceRe (RNR), High Debt Hurts

Per the Zacks analyst, inorganic growth strategies such as the sale of U.S. based weather-related energy risk management unit should drive growth.

CommScope (COMM) Focuses on Network Convergence, Margins Ail

Per the Zacks analyst, CommScope is focusing on wireline and wireless network convergence, as exemplified by the proposed acquisition of ARRIS, while grappling with soft margins due to rising costs.

Lack of Debt Aids Amerisafe (AMSF), Product Concentration Hurts

Per the Zacks analyst, its debt-free balance sheet, which provides plenty of financial flexibility, poises it well for growth.

Upstream Business Aids Ecopetrol (EC), Refining Margin Weak

The Zacks analyst believes that upstream business will continue to help Ecopetrol generate handsome free cashflow.

New Upgrades

WEX (WEX) to Gain from Acquisition of Discovery Benefits

The Zacks analyst believes that acquisition of Discovery Benefits will boost WEX's position as a technology platform in the healthcare space and enhance its employee benefits platform.

Store Openings & Acquisitions Drive Lithia Motors (LAD)

Per the Zacks analyst, regular store openings and high-potential asset acquisitions are aiding Lithia Motors' business expansion and revenue growth.

Carnival (CCL) Rides on Higher Revenue Yield & Strong Demand

Despite increased expenses, the Zacks analyst is encouraged by Carnival's effort to enhance revenue yield from higher ticket prices amid increased demand.

New Downgrades

Higher SG&A Costs Likely to Hurt Ulta Beauty's (ULTA) Margins

Per the Zacks analyst, Ulta Beauty might witness strained operating margins due to higher SG&A expenses. These costs will be incurred toward store labor, growth initiatives and brand innovation.

Rising SD&A Costs Weigh on Acuity Brands' (AYI) Margins

Higher selling, distribution and administrative expenses (SD&A) due to rising freight and commission expenses, along with higher employee-related and acquisition-related costs pose concerns.

Infineon (IFNNY) Hurt by Increasing Investments & High Debt

Per the Zacks analyst, Infineon's need for large capital investments in retaining a competitive cost position is likely to limit margin expansion. Also, its leveraged balance sheet is a niggling woe.

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
United Continental Holdings, Inc. (UAL) : Free Stock Analysis Report
T-Mobile US, Inc. (TMUS) : Free Stock Analysis Report
Petroleo Brasileiro S.A.- Petrobras (PBR) : Free Stock Analysis Report
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
Keurig Dr Pepper, Inc (KDP) : Free Stock Analysis Report
Carnival Corporation (CCL) : Free Stock Analysis Report
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