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The Zacks Analyst Blog Highlights: Home Depot, Phillip Morris, United Parcel Service, V.F. and Shopify

Zacks Equity Research

For Immediate Release

Chicago, IL – May 24, 2019 – 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: Home Depot HD, Phillip Morris PM, United Parcel Service UPS, V.F. Corp VFC and Shopify SHOP.

Here are highlights from Thursday’s Analyst Blog:

Top Analyst Reports for Home Depot, Philip Morris and UPS

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 Home Depot, Phillip Morris and United Parcel Service. 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 >>>

Home Depot’s shares have lost -1.4% over past three months, outperforming the Zacks Retail Building Products industry’s -2.7% decline. The company reported soft comps in first-quarter fiscal 2019, which lagged analysts’ expectations. The Zacks analyst thinks tough year-over-year comparisons owing to hurricane-related sales hurt comps.

The company’s top-line performance in the fiscal first quarter was also hurt by adverse weather in February and continued deflation in lumber prices. Further, stiff competition from other leading players remains an added concern. Nevertheless, Home Depot retained its five-year long trend of earnings beat in the fiscal first quarter, with positive sales surprise in nine of the last 11 quarters.

Results gained from strength in both Pro and DIY categories. The company’s efforts to provide an interconnected shopping experience to customers with localized and innovative products, and improved productivity also aided its quarterly performance.

Shares of Phillip Morris have gained +5.2% in the past year, outperforming the Zacks Tobacco industry's decline of -8.2%. The Zacks analyst thinks the company is benefiting from advancement in RRPs arena, which was fueled further when the FDA allowed the company to sell IQOS heating devices.

Further, strong growth in heated tobacco units aided the company’s top line in the first quarter of 2019. Efficient pricing boosted performance in the first quarter, which is expected to be a key catalyst in the forthcoming periods.

However, headwinds in the cigarette category are a concern. Markedly, revenues in the combustible unit declined year over year in the first quarter, while shipment volumes were flat. Stringent policies and fading consumer interests are weighing on cigarette sales. Further, management expects sales volumes in the unit to continue declining in 2019.

United Parcel Service’s shares have outperformed the Zacks Transportation - Air Freight and Cargo industry over the past year, losing -16.4% vs. -24.1%. The Zacks analyst likes UPS' efforts to reward its shareholders through dividends and buybacks. Evidently, the company rewarded $4.2 billion to its shareholders in 2018.

Continuing its shareholder-friendly approach, in February 2019, UPS increased its quarterly dividend by 5.5% to 96 cents per share. In the first quarter of 2019, the company paid approximately $867 million as dividends to its shareholders, up 5.5%. Additionally, it bought back 2.4 million shares for $250 million.

UPS’ growth is hugely supported by the e-commerce development. The company anticipates cross-border e-commerce volume to grow by 28% over the next three years. However, the company's high capital expenditures are limiting bottom-line growth. Trade-war related uncertainty and high debts pose further challenges.

Other noteworthy reports we are featuring today include V.F. Corp and Shopify.

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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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Shopify Inc. (SHOP) : Free Stock Analysis Report
The Home Depot, Inc. (HD) : Free Stock Analysis Report
V.F. Corporation (VFC) : Free Stock Analysis Report
Philip Morris International Inc. (PM) : Free Stock Analysis Report
United Parcel Service, Inc. (UPS) : Free Stock Analysis Report
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