Wednesday, June 14, 2017

Top Analyst Reports for Amazon, Visa, Verizon & Citigroup

Tuesday, June 13, 2017

The Zacks Research Daily presents the best research output of our analyst team. Today’s Research Daily features new research reports on 17 major stocks, including Amazon (AMZN), Visa (V), Verizon (VZ) and Citigroup (C).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 >>>

Amazon’s shares have outperformed the broader market in the year-to-date period (the stock is up +30.6% vs. the +8.8% gain for the S&P 500 as a whole). The company delivered strong first quarter results with both earnings and revenues beating expectations.

The Zacks analyst likes the company’s solid loyalty system in Prime and its FBA strategy, and content addition continues to add selection to Prime memberships. Also, the AWS generates much higher margins than retail, so it has a very positive impact on Amazon’s profitability. Devices and IoT is also a potential growth area. However, Prime saturation in the U.S. market and competition in online retail remains concern.

(You can read the full research report on Amazon here >>>) . 

Shares of Visa have outperformed the Zacks Financial Transaction Services industry as well as MasterCard in the year-to-date period (Visa is up +21.2% vs. +18.5% gain for MA and +15.7% for the industry). Driving this momentum is the acknowledgement that Visa’s brand, global network, and leading market share position it to be a key beneficiary of the secular global shift to electronic transactions. Initial concerns about a changing competitive landscape, large on account of new payment options, have also started receding.

The company’s strong results in recent quarters reflect this favorable backdrop. On the flip side, forex volatility, increased client incentives and global economic uncertainty are some of the headwinds.

(You can read the full research report on Visa here >>>).

Verizon’s shares have been laggards over the past year — the stock is down 11.9% over the past 12 months vs. AT&T’s 3.5% decline and the +17% gain for the S&P 500 index. Verizon’s latest deal to acquire Straight Path Communications for $3.1 billion is part of its recent efforts to maintain its wireless leadership while branching out into adjacent opportunities.

The company’s decision to launch FiOS Prepaid plan, FiOS Internet service and to zero-rate its data on FiOS Mobile App should help it gain subscribers while unlimited data plans have heated up the wireless industry.

The Verizon-Yahoo deal underwent a discount revision of $350 million, but is part of the company’s efforts to add content; a TV streaming service is reportedly being contemplated. In the updated research report issued today, the Zacks analyst discusses the pros & cons of investing in Verizon shares at this stage.

(You can read the full research report on Verizon here >>>).

Shares of Citigroup have gained around +8.8% year to date, outperforming the Zacks Major Banks industry, which has gained +2.8% over the same period. The Zacks analyst likes the company’s restructuring and streamlining efforts, strategic investments in core business and expense management. Recently, the firm has entered into an agreement to vend its Fixed Income Analytics and Index Businesses to London Stock Exchange Group plc in order to focus on core operations.

Moreover, the recently approved Financial Choice Act which seeks to eradicate a number of core financial regulations will act as a tailwind for the company in coming quarters. However, several issues including a substantial litigation burden remain concerns.

(You can read the full research report on Citigroup here >>>).

Other noteworthy reports we are featuring today include Morgan Stanley (MS), Walgreens (WBA) and Duke Energy (DUK).

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Mark Vickery

Senior Editor

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>>>

Featured Reports

CBRE (CBG) to Acquire Caledon, Global Uncertainty Remains

Per the Zacks analyst, CBRE Group’s efforts to broaden its service offerings and focus on strategic acquisitions are aiding it. But, uneasiness in certain global economies is a concern.

Duke Energy’s (DUK) Infrastructural Plans Will Drive Growth

Per the Zacks analyst, Duke Energy invests heavily in infrastructure and expansion projects. Its current investment plan will support the company’s targeted earnings growth rate of 4%-6% through 2021.

Kinder Morgan (KMI) to Grow on Fee-Based Deals, Debts High

Kinder Morgan expects majority of its cash flow in 2017 to be generated from stable fee-based contracts. However, high dependence on debt financing could hurt the company, per the covering analyst.

Diversification Efforts Buoy DISH (DISH), Customer Loss a Woe

Per the Zacks analyst, DISH’s efforts to diversify its business from a satellite-TV operator to an Internet TV operator looks impressive.

Margin Growth and Buyouts to Aid Parker-Hannifin (PH)

Per the Zacks analyst, Parker-Hannifin’s revamped “Win Strategy” will continue to boost margins, going ahead.

Electronic Arts (EA) to Benefit from Strong Digital Business

The covering analyst opines that growing digital business, strength in franchises (like EA Sports titles, Battlefield and Star Wars) and cost optimization initiatives will boost revenues going forward.

Dollar Tree (DLTR) to Gain from Family Dollar’s Integration

Per the Zacks analyst, Family Dollar’s integration, store expansion and renovation plans should benefit Dollar Tree.

New Upgrades

Royal Caribbean (RCL) Rides on Bookings, Double-Double Plan

Per the Zacks analyst, solid booking trends are likely to lead to revenue growth at Royal Caribbean in 2017. Its Double-Double program is helping to control costs and improve revenue yields.

Volume Growth, Cost Cut Efforts Drive Norfolk Southern (NSC)

The covering analyst likes the improving coal scenario, which is aiding overall volumes at Norfolk Southern. The company’s prudent cost management and shareholder-friendly moves also raise optimism.

Morgan Stanley’s (MS) Project Streamline To Boost Profits

Per the Zacks analyst, Morgan Stanley remains on track to reduce expenses through the implementation of its cost control plan, Project Streamline, thus improving profitability in the quarters ahead.

New Downgrades

Legg Mason’s (LM) Continued AUM Outflow Raises Concern

Per the Zacks analyst, Legg Mason has experienced equity AUM outflows over the last few years due to poor investment management performance. Also, strict regulations in the industry remain a headwind.

Manulife Financial (MFC) Hurt By Soft Canadian Operations

Per the covering analyst Manulife Financial’s earnings will be weighed on by soft Canadian operations as the segment’s core earnings will be impacted in the near term due to lower group benefit sales.

Walgreens (WBA) – Rite Aid Deal in Doubt under FTC Hassle

The Zacks analyst worries about the unclear fate of the impeding Walgreens- Rite Aid merger. If the deal fails, it will be a big blow as the merger expects a synergy of $1 billion.

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
Walgreens Boots Alliance, Inc. (WBA): Free Stock Analysis Report
Verizon Communications Inc. (VZ): Free Stock Analysis Report
Visa Inc. (V): Free Stock Analysis Report
Morgan Stanley (MS): Free Stock Analysis Report
Duke Energy Corporation (DUK): Free Stock Analysis Report
Citigroup Inc. (C): Free Stock Analysis Report, Inc. (AMZN): Free Stock Analysis Report
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Zacks Investment Research

June 14, 2017 at 05:09AM

from Mark Vickery