Top Analyst Reports For Comcast, Deere & Exelon
Zacks Investment Research | Feb 28, 2019 05:01AM ET
Thursday, February 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 Comcast (CMCSA), Deere (DE) and Exelon (EXC). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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Comcast’s shares have outperformed the S&P 500 in the past year, gaining +6.4% vs. +2.9%. The Zacks analyst thinks Comcast is benefiting from solid growth in residential high-speed Internet customers. Expanding Wi-Fi coverage along with innovative xFi control features is improving customer experience. The company’s Xfinity Mobile is now used by more than one million customers.
Additionally, Green Book’s Best Picture Oscar win bodes well for Comcast division Universal Pictures. Further, the Sky acquisition expands Comcast’s international reach. Notably, the company will enter the streaming market through NBCUniversal’s upcoming service.
However, the streaming market is highly competitive and significant investment is needed to gain footprint. Hence, incremental spending on content can hurt Comcast’s margin expansion. Moreover, the company continues to lose voice and video subscribers due to cord-cutting. Additionally, high debt level is a headwind.
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Shares of Deere have increased +11.7% over the past six months, outperforming the S&P 500, which has declined -3.6% over the same period. Deere’s first-quarter fiscal 2019 adjusted earnings and revenues rose on a year-over-year basis aided by demand growth in key markets. Earnings missed expectations while revenues beat the same.
For fiscal 2019, Deere projects net sales growth of 7% year over year and net income of $3.6 billion. The Zacks analyst thinks the company will benefit from improving construction markets and growing replacement demand for agricultural equipment. The acquisition of Wirtgen, which enhances Deere's exposure to global transportation infrastructure, will be a catalyst. Introduction of advanced technologies in its products will fuel growth.
Raw material cost inflation, elevated expenses and unfavorable foreign currency impact will hurt margins in the near term. Nevertheless, Deere remains well poised for long-term growth backed by population and urbanization growth.
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Exelon’s shares have gained +30.4% in the past year, outperforming the S&P 500 which has gained +2.9% over the same period. Although Exelon’s earnings per share during the fourth quarter were in line with estimates, the bottom line improved from the year-ago level. The improvement was due to new rates at PHI and higher energy efficiency earnings at ComEd.
The Zacks analyst thinks Exelon is likely to benefit from its $23-billion planned capital investment, focus on zero-emission electricity generation and cost savings. The company continues with its hedging program to manage market risks and protect the value of its generation. Strong cash flow generation capacity will help it lower debt levels and increase value of its shareholders.
However, Exelon is subject to the impact of commodity price volatility and price fluctuation in the wholesale markets. Stringent government regulation is also a cause of concern.
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Other noteworthy reports we are featuring today include Monster Beverage (MNST), Hormel Foods (HRL) and Newmont (NEM).
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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
Today's Must Read/h6
Featured Reports/h6
Per the Zacks analyst, Monster Beverage sports strength at its energy drinks category, mainly driven by Monster Energy brand.
The Zacks analyst is impressed with Newmont's efforts to reduce debt and improve efficiency.
The U.S. launch of BioMarin's newest rare disease drug Palynziq's is progressing well. Its growing pipeline focus towards gene therapy agents encourages the Zacks analyst.
Per the Zacks analyst, Entergy's disciplined investments in growth projects bolsters growth prospects.
Per the Zacks analyst, Twilio's firm focus on introducing products is leading to a robust expansion of its existing clientele and first-time deals with the new ones, thereby aiding its topline.
Per Zacks analyst Atmos Energy's planned $9-$10B investment in next five years, along with expansion in customer volumes and new rates will drive performance of the company.
The Zacks analyst believes that expansion of connected cars fleet has helped Avis Budget streamline operations and reduce costs.
Per the Zacks analyst, Monster Beverage sports strength at its energy drinks category, mainly driven by Monster Energy brand.
The Zacks analyst is impressed with Newmont's efforts to reduce debt and improve efficiency.
The U.S. launch of BioMarin's newest rare disease drug Palynziq's is progressing well. Its growing pipeline focus towards gene therapy agents encourages the Zacks analyst.
Per the Zacks analyst, Entergy's disciplined investments in growth projects bolsters growth prospects.
Per the Zacks analyst, Twilio's firm focus on introducing products is leading to a robust expansion of its existing clientele and first-time deals with the new ones, thereby aiding its topline.
Per Zacks analyst Atmos Energy's planned $9-$10B investment in next five years, along with expansion in customer volumes and new rates will drive performance of the company.
The Zacks analyst believes that expansion of connected cars fleet has helped Avis Budget streamline operations and reduce costs.
New Upgrades/h6
The Zacks analyst is bullish about Chemed's Roto-Rooter arm seeing consistent growth on strength in the core plumbing and drain cleaning service segments as well as solid water restoration business.
Strong growth in Service and Custodial segments boost HealthEquity. The Zacks analyst is also optimistic about solid growth in HSA (Health Savings Account) members.
Per the Zacks analyst, Hormel Foods' refrigerated foods and international units are gaining from buyouts. Notably, the buyouts of Columbus and Fontanini are expected to continue fueling performance.
The Zacks analyst is bullish about Chemed's Roto-Rooter arm seeing consistent growth on strength in the core plumbing and drain cleaning service segments as well as solid water restoration business.
Strong growth in Service and Custodial segments boost HealthEquity. The Zacks analyst is also optimistic about solid growth in HSA (Health Savings Account) members.
Per the Zacks analyst, Hormel Foods' refrigerated foods and international units are gaining from buyouts. Notably, the buyouts of Columbus and Fontanini are expected to continue fueling performance.
New Downgrades/h6
Per the Zacks analyst, weakness in few major markets and huge availability of off-lease used vehicles lowered sales generated by AutoNation's new vehicle retail unit.
Per the Zacks analyst, A. O. Smith is struggling with low sales of electric water heaters & air purifiers with high selling, general & administrative costs in China. Rise in steel prices is a concern.
Per the Zacks analyst, increasing costs mainly due to rise in personal expenses are likely to hurt KeyCorp's bottom-line growth. Moreover, substantial exposure to real estate loans remains a concern.
Per the Zacks analyst, weakness in few major markets and huge availability of off-lease used vehicles lowered sales generated by AutoNation's new vehicle retail unit.
Per the Zacks analyst, A. O. Smith is struggling with low sales of electric water heaters & air purifiers with high selling, general & administrative costs in China. Rise in steel prices is a concern.
Per the Zacks analyst, increasing costs mainly due to rise in personal expenses are likely to hurt KeyCorp's bottom-line growth. Moreover, substantial exposure to real estate loans remains a concern.
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