Thursday, May 17, 2018
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 Parcel Service (UPS), TOTAL (TOT) and Ford (F). 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 Parcel Service’s shares have underperformed the Zacks Air Freight and Cargo industry in the past year, gaining +13.1% vs +23%. Despite this unimpressive price performance, the company’s earnings per share and revenues surpassed expectations in first-quarter 2018. Both metrics also improved year over year.
Results were aided by the strong performance of its international segment. Robust e-commerce growth is a positive too. In February 2018, UPS had hiked quarterly dividends by 10%. The Zacks analyst thinks that a further uptick in such shareholder-friendly activities cannot be ruled out, in the light of the savings induced by the Tax Cuts and Jobs Act. In fact, UPS' solid free cash flow in first-quarter supports the possibility of a dividend hike in the near future.
However, high operating expenses continue limiting bottom-line growth. Also, UPS' 2018 capex forecast, which is higher than 2017 levels, is expected to weigh on the bottom line.
(You can read the full research report on United Parcel Service here >>>).
Shares of TOTAL have gained +17% in the last six months, outperforming the Zacks Integrated International Oil industry which has increased +14.4% over the same period. TOTAL’s earnings per share in the first quarter lagged expectations but surpassed the year-ago quarter’s earnings, due to strong operational performance, cost control and contribution from new projects.
The Zacks analyst thinks TOTAL is gaining from higher oil production and the improvement in commodity prices. Going forward, the company will benefit further from upstream startups and cost management initiatives. It continues to gain from the strategic acquisitions and non-core asset divestures. The company is utilizing its strong cash flow generating capacity to strengthen its balance sheet, pay dividend and buy back shares.
However, operations in some politically troubled regions and increasing competition could impact the company’s profitability. Due to its global presence, it is also exposed to risks associated with doing business abroad.
(You can read the full research report on TOTAL here >>>).
Ford’s shares have outperformed the Zacks Domestic Automotive industry over the last three months (+7.8% vs -6.4%). In first-quarter 2018, Ford’s adjusted earnings and revenues surpassed expectations. Both earnings and revenues were higher on a year over year basis.
The company’s fitness initiatives have identified an additional $11.5 billion of cost and efficiency opportunities, promising a better future. Also, Ford is focusing more on building up a winning portfolio and investing more on trucks, utilities and commercial vehicles. Also the acquisitions of Autonomic and TransLoc are critical for its mobility strategy.
However, frequent vehicle recalls to fix safety issues are adding to Ford's expenses and is also reducing consumers’ confidence in the brand. Also, rising metal prices are hurting its profit.
(You can read the full research report on Ford here >>>).
Other noteworthy reports we are featuring today include TD Ameritrade (AMTD), American Electric (AEP) and TELUS (TU).
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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
International Unit, Dividends & Buybacks Aid UPS, Costs Ail
Upstream Startups, Ongoing Cost Savings Drives TOTAL (TOT)
Ford (F) Rides on Fitness Initiatives and Winning Portfolio
Customer Growth Aids Pinnacle West Capital (PNW), Costs Ail
The Zacks analyst believes Pinnacle West Capital's ability to expand its customer base will drive its performance. However, increasing expenses in a concern.
Investments Aid American Electric (AEP), Adverse Rules Ail
Per the Zacks analyst, solid capital investment strategy allows American Electric to finance its high-growth utility projects. Yet adverse rulings for rate revisions may hurt the company's growth.
Montney Focus Buoys Encana (ECA) Amid Inflationary Pressures
While the Zacks analyst believes that Montney and Permian production ramp up will aid Encana maintain its revenue and cash flow growth trajectory, service cost inflation may limit the margins.
Higher Premiums Aid CNA Financial (CNA), Cat Loss Ails
Per the Zacks analyst, improving premiums continue to boost CNA Financial's top line, thereby resulting in the company's overall growth. However, exposure to catastrophe losses raise concerns.
Operational Efficiency & Organic Growth Bolsters TELUS (TU)
Per the Zacks analyst, organic growth in wireless and wireline businesses due to efficient execution of operational plans will continue to benefit TELUS.
Buyouts to Drive Hanesbrands (HBI), High Input Costs a Worry
Per the Zacks analyst, acquisitions contributed $32 million to Hanesbrands' top line in first quarter and are likely to continue boosting sales. .
Digital Innovations Aid TD Ameritrade (AMTD), High Cost Ails
Per Zacks analyst, TD Ameritrade's improved digital platforms have helped it witness higher client activities, thus aiding revenues.
Cheniere Energy's (LNG) Gas Export Dominance Bodes Well
The Zacks analyst likes Cheniere Energy's competitive advantage of being the only natural gas exporter in the U.S. market and its excellent cash flow visibility on the back of long-term contracts.
Ubiquiti (UBNT) Aided by Proprietary Network Strength
Per the Zacks analyst, Ubiquiti maintains a competitively priced network and proprietary network communication platform that is extremely well-equipped to meet end-market customer needs.
AMETEK (AME) Banks on Strong Product Portfolio, Acquisitions
Per the Zacks analyst, AMETEK's top-line growth continues to benefit from strategic acquisitions and strong performance of its analytical instruments and ultra precision technologies.
Ailing Construction Sales & Rising Costs Drag SABESP (SBS)
Per a Zacks analyst, SABESP (SBS) is grappling with adverse impacts of rising costs and expenses. Also, persistent weakness in construction business is concerning.
High Expenses Weigh on Pool Corporation's (POOL) Margins
Per the Zacks analyst, Pool Corporation is plagued with increased expenses from labor, delivery and technological initiatives which is turn is weighing on the company's margins lately.
Growing Rivalry May Dent Bruker's (BRKR) BioSpin's Growth
The Zacks analyst is worried about fierce competition from companies offering magnetic resonance spectrometers that may adversely impact Bruker's core BioSpin division's growing revenues.
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United Parcel Service, Inc. (UPS) : Free Stock Analysis Report
TELUS Corporation (TU) : Free Stock Analysis Report
TOTAL S.A. (TOT) : Free Stock Analysis Report
Ford Motor Company (F) : Free Stock Analysis Report
TD Ameritrade Holding Corporation (AMTD) : Free Stock Analysis Report
American Electric Power Company, Inc. (AEP) : Free Stock Analysis Report
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