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The Zacks Analyst Blog Highlights: Alibaba, Verizon Communications, Coca-Cola, Tesla and Charter Communications

Zacks Equity Research

For Immediate Release

Chicago, IL – May 6, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Alibaba Group BABA, Verizon Communications VZ, Coca-Cola KO, Tesla TSLA and Charter Communications CHTR.

Here are highlights from Tuesday’s Analyst Blog:

Q1 Scorecard and Analyst Reports for Alibaba, Coca-Cola, Verizon and Others

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 Alibaba Group, Verizon Communications and Coca-Cola. 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 >>>

Q1 Earnings Season Scorecard 

Including all of this morning's reports, we now have Q1 results from 320 S&P 500 members or 64% of the index's total membership that combined account for 78% of the index's total market capitalization.

Total earnings or aggregate net income is down -12.7% on +0.2% higher revenues, with 66.9% beating EPS estimates and 61.3% beating revenue estimates.

The two largest earnings contributors to the index, Finance & Technology, are having the opposite effect on the aggregate growth picture, with Finance dragging it down and Technology pushing it higher. Excluding the Finance drag, Q1 earnings would be down only -3.6% (vs. -12.7%). But without the Tech support, Q1 earnings growth would be -18.4% (vs. -12.7%). 

Estimates for 2020 Q2 and full-year 2020 are still coming down, with Q2 earnings now expected to be down -38.7% on -9.4% lower revenues. For 2020, earnigns are now expected to be down -21.5% on -6.4% lower revenues. This approximates to index 'EPS' of $127.25 for 2020 vs. $162.16 in 2019 and $160.13 in 2021.  

Alibaba shares have performed strongly lately, but have lagged the Zacks Internet Commerce industry over the past year (+3.7% vs. +7%). The Zacks analyst believes that Alibaba continues to benefit from strong growth in metrics. Further, Alibaba’s strengthening cloud business with its expanding customer base continues to drive its performance.

Its New Retail strategy is also gaining momentum. This is aiding growth in Tmall Import, Hema fresh food grocery business and Intime Department Stores. However, higher costs associated with new initiatives remain a major concern.

Also, uncertain economy and macro headwinds in China are major concerns. In addition, rising competition from e-commerce players poses a risk. However, the steady improvement in core commerce and strong cloud business remain positives.

Shares of Verizon have lost -6.1% over the past six months against the Wireless National industry’s fall of -13.4%. The Zacks analyst believes that Verizon’s focus on online content delivery, mobile video and online advertising will likely stoke future growth.

Despite worldwide mayhem induced by the coronavirus pandemic, Verizon started 2020 on a positive note, reporting relatively healthy first-quarter 2020 results primarily led by the wireless business. Verizon is also changing its revenue mix toward newer growth services like cloud, security and professional services.

However, the company continues to struggle in a competitive U.S. wireless market with muted demand and tweaked 2020 guidance amid the coronavirus-led turmoil. The company's wireline division is struggling with losses in access lines due to competitive pressure from VoIP service providers. In addition, Verizon is spending heavily on promotion and lucrative discounts to woo customers, which further erodes profitability.

Coca-Cola’s shares have lost -22.7% over the past three months against the Zacks Soft Drinks Beverages industry’s fall of -19.3%. The Zacks analyst believes that the company is gaining from the effective execution of strategies to evolve as a consumer-centric total beverage company.

Coca-Cola continued with its earnings beat streak for the second straight quarter in first-quarter 2020. Despite a beat, its top line declined in the first quarter as gains from a strong start to 2020 were offset by disruptions in the latter half of the quarter due to the coronavirus pandemic. It witnessed a decline in unit case volume, while price.mix and concentrate sales remained flat.

The company expects the pandemic to significantly hurt second-quarter results. Also, adverse currency impacts are likely to persist. However, innovation and investment in core categories and brands have been the key focus areas, which led to the expansion of retail value share. 

Other noteworthy reports we are featuring today include Tesla and Charter Communications.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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Verizon Communications Inc. (VZ) : Free Stock Analysis Report
 
Charter Communications, Inc. (CHTR) : Free Stock Analysis Report
 
Coca-Cola Company (The) (KO) : Free Stock Analysis Report
 
Tesla, Inc. (TSLA) : Free Stock Analysis Report
 
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
 
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