Thursday, March 1, 2018
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including United Technologies (UTX), Netflix (NFLX) and Schlumberger (SLB). 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 13.3% over the last three months, outperforming the Zacks Diversified Operations industry, which has lost -3.2% over the same period. United Technologies serves various end-markets, which allows it to remain profitable even during tough economic times.
The company has offered bullish guidance for 2018 on healthy demand trends and is likely to deliver sustainable earnings growth in future with Rockwell merger. However, macroeconomic conditions and fluctuations in foreign currency exchange rates affect the company’s bottom-line growth.
A disruption in deliveries from suppliers, capacity constraints, production disruptions, price changes, or decreased availability of raw materials or commodities is likely to have an adverse effect on its ability to meet delivery schedules, thereby increasing its operating costs.
(You can read the full research report on United Technologies here >>>).
Shares of Netflix have increased 54.5% over the last three months, significantly outperforming the Zacks Broadcast Radio and Television industry’s gain of 22% during the same period. The company’s efforts to attract viewers through investing in more regional programming are leading to robust addition of international subscribers.
The company remains confident of adding more subscribers as the trend of binge viewing is catching up fast. Netflix now has 117.58 million subscribers globally. We believe continuing subscriber addition and expanding content portfolio are the key catalysts that will help Netflix to sustain growth going forward.
However, increasing market spends and higher investments on original/acquired content will continue to hurt profitability, at least in the near term. Rising competition is also a major concern.
(You can read the full research report on Netflix here >>>).
Schlumberger’s shares have outperformed the Zacks Oil and Gas - Field Services industry over the past three months, gaining 7.7% vs -4.3%. Schlumberger is the largest oilfield services player in the world with presence in every energy market across the world. Also, in all the operating business segments, the company is among the top players.
The firm has been banking on growing hydraulic fracturing work in the North American land market. Schlumberger’s consistent efforts toward strengthening technologies helped it serve complex oilfield services projects globally. The company is also expected to generate significant cashflow from the Palliser Block project where it is assisting Torxen Energy in setting up more than 1,600 oil wells.
However, since 2015, Schlumberger’s long-term debt load increased considerably. Moreover, the company’s cash balance declined 45% year-over-year in 2017, reflecting significant balance sheet weakness.
(You can read the full research report on Schlumberger here >>>).
Other noteworthy reports we are featuring today include Lennar (LEN), Rockwell Collins (COL) and Paychex (PAYX).
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
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
United Technologies (UTX) Core Focus Marred By Margin Woes
Schlumberger's (SLB) Higher Fracking Work Offsets Debt Load
Netflix (NFLX) Rides on Solid Original Content Portfolio
Higher Investments on Marketing Hurts MercadoLibre (MELI)
Per the Zacks analyst MercadoLibre's consumer-centric approach is commendable. However, increasing investments on consumer acquisition and branding is negatively impacting margins.
Lennar (LEN) Gross Margin Suffers From Rising Land Costs
The Zacks analyst believes labor shortage along with rising land and labor costs pose a threat to the company's margins.
Universal Forest (UFPI) to Gain From Rising Demand & Buyouts
Per a Zacks analyst, Universal Forest (UFPI) is poised to gain from rising demand for products and services due to solidifying U.S. housing market.
Paychex (PAYX) Gains on Product Refreshes & HROI Buyout
The Zacks analyst thinks that Paychex's sustained focus on investing in product development will continue to drive top- and bottom-line performance over the long run.
Order Growth Aids Rockwell Collins (COL) Amid Stiff Rivalry
Per the Zacks analyst, recent order growth will enable Rockwell Collins to generate higher revenues.
Captisol Technology to Drive Ligand's (LGND) Long-Term Growth
Ligand's Captisol technology led to partnerships with big healthcare companies that provide it with funds and royalties. This may drive the company's long-term growth believes the Zacks analyst.
Wireless & IPTV Growth Drives Telephone & Data Systems (TDS)
Per the Zacks analyst, Telephone & Data Systems' IPTV is faring well, evident from subscriber growth. The company's wireless division also performed well in fourth-quarter 2017.
Chesapeake's (CHK) High Debt & Decreasing Cash Huge Concern
The Zacks analyst feels that the company's high debts and low cash balances restricts its ability to gain capital from markets and also reduces its credibility to shareholders.
Competition in Radiation-Oncology Space Ails Accuray (ARAY)
Per the Zacks Analyst, Accuray is exposed to significant competition in the radiation oncology market, which is characterized by rapid technological changes. This is will keep margins under pressure.
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 Technologies Corporation (UTX) : Free Stock Analysis Report
Schlumberger Limited (SLB) : Free Stock Analysis Report
Paychex, Inc. (PAYX) : Free Stock Analysis Report
Netflix, Inc. (NFLX) : Free Stock Analysis Report
Lennar Corporation (LEN) : Free Stock Analysis Report
Rockwell Collins, Inc. (COL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research