Analyst Reports For GM, VMware And Southwest Airlines
Zacks Investment Research | Jun 08, 2017 12:41AM ET
Thursday June 8, 2017
Today's Research Daily features new research reports on 16 major stocks, including General Motors (GM), VMware (VMW), and Southwest Airlines (LUV). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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General Motors shares have been strong performers over the past year (the stock is up +17% vs. +11.4% for the Zacks Auto sector & -16.6% for Ford), though they have struggled lately. The Zacks analyst likes the company’s capital allocation strategy, investments in plants in the U.S. and emerging markets, product launches and focus on technology development. Moreover, the company's focus on capital deployment is expected to boost shareholder returns. However, the automaker is under pressure due to lower U.S. vehicles sales in 2016, a recent settlement related to the 2014 ignition switch recall and a large fine by China for monopolistic pricing behavior. General Motors’ quarterly earnings estimate has been going up lately.
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VMware shares have gained +17.9% year to date, underperforming the Zacks Software industry (up +21.5%) but outperforming the S&P 500 (up +7.2%). VMware’s revenues continue to register strong growth driven by its innovative product offerings like NSX, AirWatch, vSphere and vSAN. The Zacks analyst likes its innovative product pipeline, strategic partnerships, frequent contract wins and robust international sales. The company continues to benefit from its strength in the virtualization and hybrid cloud market. VMware’s impressive first-quarter results and positive fiscal year guidance (up from the previous guidance) driven by expanding product portfolio, partnerships and continuing enterprise deal wins will help the stock maintain momentum in the rest of fiscal 2018. However lackluster IT spending and mounting competition are headwinds.
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Southwest Airlines shares have been standout performers this year; they are up +19.5% in the year-to-date period vs. +11.5% gain for the Zacks Airline industry and +8% gain for the S&P 500 index. The stock's positive momentum has been particularly notable since mid-March, which got a boost from the company's quartelry report when it modestly came short of estimates but raised guidance and announced a dividend hike and raised the buyback authorization.
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Other noteworthy reports we are featuring today include Johnson Controls (NYSE:JCI), Intuitive Surgical (NASDAQ:ISRG) and ArcelorMittal (MT).
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Sheraz Mian
Director of Research
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
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Featured Reports/h6
The Zacks analyst believes new orders of $1.6B, boosted Orbital ATK's backlog to $14.8B. Its R&D expenses are helping to churn new and high quality products assuring a steady flow of orders.
While Cabot's cost management and attractive Marcellus program bode well, the covering analyst would prefer to wait for further natural gas price recovery before recommending investors purchase shares.
The Zacks analyst believes that Hawaiian Holdings continues to gain from unit revenue growth, smoother labor relations and impressive punctuality record with fewer flight cancellations.
Per the Zacks analyst, a well-balanced portfolio and focus on strategic investments should benefit MAA.
Despite competition and deflationary pressure, United Natural's buyout strategies, efforts to grow market share and margin improvement initiatives remain its strength, per Zacks analyst.
The covering analyst believes that the company will benefit from its ongoing expansions. However, business deconsolidation and currency headwinds are concerns for the company.
Per the Zacks analyst, strategy to internationalize the bank and focus on less risky products remained a key strength at Itau Unibanco.
The Zacks analyst believes new orders of $1.6B, boosted Orbital ATK's backlog to $14.8B. Its R&D expenses are helping to churn new and high quality products assuring a steady flow of orders.
While Cabot's cost management and attractive Marcellus program bode well, the covering analyst would prefer to wait for further natural gas price recovery before recommending investors purchase shares.
The Zacks analyst believes that Hawaiian Holdings continues to gain from unit revenue growth, smoother labor relations and impressive punctuality record with fewer flight cancellations.
Per the Zacks analyst, a well-balanced portfolio and focus on strategic investments should benefit MAA.
Despite competition and deflationary pressure, United Natural's buyout strategies, efforts to grow market share and margin improvement initiatives remain its strength, per Zacks analyst.
The covering analyst believes that the company will benefit from its ongoing expansions. However, business deconsolidation and currency headwinds are concerns for the company.
Per the Zacks analyst, strategy to internationalize the bank and focus on less risky products remained a key strength at Itau Unibanco.
New Upgrades/h6
The Zacks analyst is bullish on Intuitive Surgical gaining the FDA nod for its prime product da Vinci X following its European CE Mark in April. High international investment is also encouraging.
Per the Zacks analyst, Pentair will gain from industry strength, dealer wins, product innovations and the sale of the Valves & Controls business. Focus on price increases will help mitigate inflation.
Endocyte's restructuring initiative, including reduction in workforce, and shift in pipeline focus to CAR -T bi-specific adaptor program will boost its cash position, according to the Zacks analyst.
The Zacks analyst is bullish on Intuitive Surgical gaining the FDA nod for its prime product da Vinci X following its European CE Mark in April. High international investment is also encouraging.
Per the Zacks analyst, Pentair will gain from industry strength, dealer wins, product innovations and the sale of the Valves & Controls business. Focus on price increases will help mitigate inflation.
Endocyte's restructuring initiative, including reduction in workforce, and shift in pipeline focus to CAR -T bi-specific adaptor program will boost its cash position, according to the Zacks analyst.
New Downgrades/h6
The covering analyst thinks Donaldson's sales will continue to be hurt by prolonged weakness in the gas turbine market. Also, soft demand for industrial filtration solutions is making matters worse.
The Zacks analyst believes that the concentration of Maxim's mobility revenues, which are largely dependent on Samsung (KS:005930), is a concern and could only be mitigated through its diversification strategy.
While ArcelorMittal should gain from its efforts to cut debt & costs, it remains hamstrung by demand weakness in Europe and China and is still exposed to cheap steel imports, per the Zacks analyst.
The covering analyst thinks Donaldson's sales will continue to be hurt by prolonged weakness in the gas turbine market. Also, soft demand for industrial filtration solutions is making matters worse.
The Zacks analyst believes that the concentration of Maxim's mobility revenues, which are largely dependent on Samsung (KS:005930), is a concern and could only be mitigated through its diversification strategy.
While ArcelorMittal should gain from its efforts to cut debt & costs, it remains hamstrung by demand weakness in Europe and China and is still exposed to cheap steel imports, per the Zacks analyst.
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