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Top Stock Reports for United Technologies, Lockheed Martin & NextEra Energy

Mark Vickery
Top Stock Reports for United Technologies, Lockheed Martin & NextEra Energy

Thursday, April 25, 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 United Technologies (UTX), Lockheed Martin (LMT) and NextEra Energy (NEE). 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 >>>

United Technologies’ shares have gained +21.3% in the past three months, outperforming the Zacks Diversified Operations industry, which has increased +17.7% over the same period. United Technologies’ first-quarter 2019 earnings and revenues surpassed expectations by wide margins. The Zacks analyst thinks strength in commercial aftermarket businesses and impressive contribution from its acquired Rockwell Collins business sales will continue to boost United Technologies’ near-term revenues.

Also, continued investment in innovation as well as launch of new products is expected to enhance revenues, going forward. However, rising costs of sales remain a concern. If unchecked, higher costs and operating expenses will prove detrimental to United Technologies’ margins and profitability.

Also, it is experiencing softness in its equipment orders at Carrier segment due to lower transport refrigeration orders. Moreover, increase in debt levels can raise its financial obligations.

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

Shares of Buy-ranked Lockheed Martin have gained +8.2% in the past six months, outperforming the Zacks Aerospace Defense industry, which has increased +5.6% over the same period. Lockheed Martin ended the first quarter of 2019 on an impressive note, wherein earnings and revenues surpassed expectations.

The Zacks analyst thinks that being the largest defense contractor in the world, the company enjoys a strong demand for its high-end military equipment in domestic as well as international markets. As a result, solid order growth has been a key catalyst to this company. F-35 continues to be a major revenue contributor for the company.

Of late, the company is witnessing increased demand for its THAAD missiles from the Kingdom of Saudi Arabia (KSA). Favorable funding provisions made for Lockheed Martin’s products in the fiscal 2020 budget proposal should bode well for this stock’s growth. However, the company’s higher debt-to-equity ratio reflects that the stock is highly leveraged when compared to its industry and thus bears higher chance of insolvency.

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

Buy-ranked NextEra Energy’s shares have outperformed the Zacks Electric Power industry in the past year, gaining +16.4% vs +11.3%. NextEra’s first-quarter earnings surpassed estimates primarily due to strong performance from all the segments.

The Zacks analyst thinks investments to strengthen renewable operations through “30 by 30” plan will aid the company to continue as a market leader in renewable power generation. Focus on expanding operation in natural gas pipelines, and further expansion of business through acquisitions and organic growth positively impacted earnings. 

However, its 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, if planned outages last longer than expected or there is an unplanned outage, the company’s normal operations and profitability might be hindered.

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

Other noteworthy reports we are featuring today include Blackstone (BX), Stryker (SYK) and Kimberly-Clark (KMB).

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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

Strong Aerospace Business Boosts United Technologies (UTX)

Order Growth, Revised Outlook to Drive Lockheed Martin (LMT)

Investment in Renewables and Infrastructure Aid NextEra (NEE)

Featured Reports

Glaxo's (GSK) Pipeline Growing Amid Generic Woes for Advair

The Zacks analyst likes Glaxo's efforts to boost its pipeline, especially oncology. However, a generic of its top-selling drug, Advair was approved in February which can erode its sales in 2019.

Inflows Aid Blackstone's (BX) Asset Growth, High Costs a Woe

Per the Zacks analyst, continued net inflows will boost Blackstone's assets under management, thereby lifting the top line. Yet, higher costs due to its investment in franchise might hurt profits.

End-Market Strength, Expanding Portfolio Aids Amphenol (APH)

Per the Zacks analyst, Amphenol's top-line benefits from improved end-market demand, new product rollouts, and market share gains.

Productivity Actions Aid Celanese (CE), Weak Demand Ails

Per the Zacks analyst, operational cost savings through productivity actions will drive Celanese's profitability in 2019. However, lower global demand will hurt the company's volumes.

Lower Mortgage Rates Bode Well for PulteGroup (PHM)

The recent declines in mortgage rates and moderate home prices have been helping PulteGroup to generate higher traffic, thereby resulting in improved absorption rate.

ProPetro (PUMP) to Gain from Cheap Local Sand Usage

The Zacks analyst believes that shift to cheaper regional sand should boost ProPetro's supply chain economics by lowering costs and downtime.

Regular Investments Aids Hexcel (HXL), Competition Hurts

Per the Zacks analyst, Hexcel invests in major innovations for future aircraft platforms and other composite applications.

New Upgrades

Solid Prospects in Mako Robotics Platform Aid Stryker (SYK)

Per the Zacks analyst Stryker's flagship Mako robotics platform continues to provide the company with a competitive edge in the MedTech space. Mako is the key driver of the core Orthopaedic segment.

Kimberly-Clark's (KMB) Restructuring Plans to Aid Earnings

Kimberly-Clark expects cost savings of $400-$450 million in 2019, from its FORCE Program and 2018 Global Restructuring Program. Per the Zacks analyst, this is most likely to aid the bottom line.

Edwards (EW) Rides on Solid THV Sales and Global Prospects

Per the Zacks analyst, Edwards strong transcatheter heart valve sales in domestic and global markets is a major positive. The company is firming its hold in Asia especially Japan which buoys optimism.

New Downgrades

Exposure to Catastrophe Loss Hurts Berkshire Hathaway (BRK.B)

Per the Zacks analyst, Berkshire's property and casualty insurance business, which generate maximum return on equity, is exposed to catastrophe losses that in turn induce volatility in earnings.

Gartner (IT) Grapples With Rising Operating Expenses

The Zacks analyst believes that continuous investments in value drivers to retain a competitive edge and fend off competition have resulted in higher operating expenses for Gartner.

Stressed Margins & Stiff Competition Hurt Henry Schein (HSIC)

Henry Schein has been witnessing dented margins in recent times. The Zacks analyst is apprehensive about stringent price competition in the dental and animal health market.

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United Technologies Corporation (UTX) : Free Stock Analysis Report
Stryker Corporation (SYK) : Free Stock Analysis Report
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
Kimberly-Clark Corporation (KMB) : Free Stock Analysis Report
The Blackstone Group L.P. (BX) : Free Stock Analysis Report
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