Thursday, March 28, 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 JPMorgan (JPM), Disney (DIS) and Citigroup (C). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
JPMorgan’s shares have outperformed the Zacks Major Regional Banks industry in the past year (-9.5% vs. -10.8%). The company has an impressive earnings surprise history, having surpassed expectations in three of the trailing four quarters.
The Zacks analyst thinks expansion into new markets by opening branches, focus on strengthening credit card business, higher rates and improving loan balance will continue supporting its revenues. Also, the bank's steady capital deployment plans reflect a strong balance sheet position. However, dismal mortgage banking performance (owing to lower origination volume and refinancing activities) remains a major concern.
The company's significant dependence on capital markets revenues is another worry. These are expected to hurt the bank's fee income growth to an extent.
Shares of Disney have gained +9.8% over the past year, outperforming the Zacks Media Conglomerates industry’s gain of +6.7% during the same period. The Zacks analyst thinks Disney’s strong film slate will boost its Studio Entertainment segment results. Recently released Captain Marvel became the third-highest domestic release of all times in the month of March and the seventh highest MCU debut film.
Additionally, future releases including Avengers 4 may aid top-line growth. Moreover, with the completion of the Fox acquisition, Disney can strengthen its TV slate and expand its international presence and DTC offerings. Disney’s upcoming streaming service Disney+, supported by content strength from Disney and Fox, may give tough competition to Netflix (NASDAQ:NFLX) and Amazon (NASDAQ:AMZN).
However, higher programming costs at ESPN and heavy investments in streaming services continue to hurt profitability. Moreover, softness experienced in tourism in China negatively impacted Shanghai Disney Resort results.
Citigroup's shares have outperformed the Zacks Major Regional Banks industry in the past three months (+16.7% vs. +6.8%). Also, the company possesses an impressive earnings surprise history, beating expectations in all the trailing four quarters.
The Zacks analyst thinks the company’s restructuring and streamlining efforts along with strategic investments in core business bode well for the long-term. Also, declining costs base supports bottom-line improvement.
Recently, the company entered the booming digital consumer payments industry, thereby expanding sources of revenues. Nevertheless, pending litigation issues might keep legal expenses elevated. Moreover, muted fee income growth, due to dismal performance of investment banking revenues, keeps its topline under pressure.
Other noteworthy reports we are featuring today include Intuitive Crown Castle (CCI), PNC Financial (PNC) and Twitter (TWTR).
Zacks' Top 10 Stocks for 2019
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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>>>
Per the Zacks analyst, Twitter's efforts to add features and strengthen its security measures to lure users are expected to fuel the company's top line.
Per the Zacks analyst, growing revenues driven by strategic initiatives such as the buyout of Meridian Health Plans of Michigan and Illinois plus MeridianRx has led to significant growth.
Per the analyst, Middleby is witnessing robust demand from restaurant chain customers and increased sales of ventless cooking products. But margins are pressured due to acquisition-related costs.
Per the Zacks analyst, strong backlog in most end markets, acquisitions and solid commercial execution will drive growth.
Per the Zacks analyst, Aerie's lead drug, Rhopressa continues to gain traction.
Per the Zacks analyst, Astec Industries will benefit from improving construction markets, focus on capital-allocation strategy and cost-structure optimization despite raw material inflation.
Per the Zacks analyst, Agenus is focussing on the developemnt of its pipeline candidates. However, the company faces stiff competition.
Per the Zacks analyst, Crown Castle's efforts to expand its fiber business will boost long-term results. Further, healthy leasing activity amid high demand for infrastructure is a tailwind.
The Zacks analyst believes that the PNGTS pipeline and other expansions projects like Portland XPress and Westbrook XPress will drive earnings and DCF of TC PipeLines, going forward.
Per the Zacks analyst, Element Solutions is witnessing strong growth in organic sales, which should support its margins. Moreover, the company should gain from its strategic acquisitions in 2019.
The Zacks analyst believes Pfizer revenues in 2019 will be hurt by loss of exclusivity of key drugs, mainly Lyrica in the United States, and currency headwinds.
Per Zacks analyst, technology and business infrastructure investments keep PNC Financial's costs high. Also, substantial exposure to commercial loans, depicting lack of diversification, is a concern.
Per the Zacks analyst, PVH Corp's Calvin Klein North America business suffers due to fashion miss-related issues at the Jeans business. This is weighing on overall sales for the past few quarters.
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