Top Analyst Reports For UBS Group, Accenture & Sinopec
Zacks Investment Research | Sep 18, 2017 04:48AM ET
Monday, September 18, 2017
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 UBS Group (UBS), Accenture (ACN) and Sinopec (SNP). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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Shares of UBS Group AG have underperformed the industry on the NYSE in the last six months (+5.7% vs. +8.4%). The company’s profitability continues to be challenged by negative interest rates in the domestic economy and strict regulatory framework. However, UBS Group remains focused on building capital levels, global expansion and executing restructuring initiatives. Moreover, management anticipates to achieve CHF 2.1 billion in net cost reductions by the end of 2017. Further, the company’s strong capital position remains a tailwind.
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Buy-rated Accenture has outperformed the industry over the past year, gaining (+22.5% vs. +21.2%). The company offers management consultancy, technology and outsourcing services. Optimism remains over Accenture’s latest product additions in the analytics application space, given the increasing demand for digital solutions. Moreover, Accenture’s strategy of growing through partnerships like Apple (NASDAQ:AAPL) and acquisitions like IBB and VERAX are encouraging. The strategies have enabled Accenture to enter new markets, diversify and broaden its product portfolio, and maintain its leading position.
Nonetheless, Accenture’s recent announcement of creating 15K new jobs by 2020 and investment plan of $1.4 billion for employee training and opening of 10 innovation centers across the U.S. cities may dent its bottom-line results. Furthermore, increasing competition from peers and an uncertain macroeconomic environment may deter its growth to some extent.
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Sinopec’s price chart reveals that it has significantly outperformed the industry year to date, increasing (+10.5% vs. +5%). Through its refinery business, Sinopec has been able to withstand the crude price weakness to a large extent. During first-half 2017, consumption of refined petroleum products jumped almost 6% from the prior-year comparable period. Also, declining long-term debt load along with a rapidly rising cash balance reflect balance sheet strength. Sinopec has also made large-scale oil discoveries, especially in the Shengli field, which will support long-term production.
However, it is expected that Sinopec’s matured domestic oil fields and associated rising costs will remain an overhang on its operations. Sinopec’s operating expenses during the first half of 2017 increased nearly 40%. Moreover, overdependence on downstream operations might limit Sinopec’s growth prospects. Given these factors, it is wise to wait for a better entry point.
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Other noteworthy reports we are featuring today include TE Connectivity (TEL), Wells Fargo (WFC) and Restaurant Brands International (QSR).
New Report: An Investor’s Guide to Cybersecurity
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The cybersecurity industry is expanding quickly in response to these threats. In fact, a projected $170 billion per year will be spent to protect consumer and corporate assets. Zacks has just released Cybersecurity: An Investor’s Guide to Locking Down Profits which reveals 4 promising investment candidates.
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
Featured Reports
Per the Zacks analyst, Alnylam's deep pipeline with most candidates under its promising RNAi technology poises the company for growth.
The Zacks analyst believes Buckeye Partners existing midstream assets in key geographical areas drive its performance and developing midstream projects once completed will further boost earnings.
The Zacks analyst is impressed by the company's efforts to expand its global footprint through the impending Scripps buyout.
Per the Zacks analyst, Nucor should gain from efforts to expand production capacity and grow through acquisitions. But negative impact of higher steel imports may weigh on its Q3 earnings.
Per the Zacks analyst, Sun Life's expansion in international market bode well for growth. It is focusing on Asian markets that are expected to yield better than the North American markets.
The Zacks analyst is bullish on Chemed's Roto-Roote's strong performance within plumbing, drain cleaning and water restoration.
Per the Zacks analyst, TransUnion's revenues are likely to improve as increased risk of identity theft due to data breaches are propelling the demand for its products.
New Upgrades
Per the Zacks analyst, strong prospects in transportation business, driven by a rise in global auto production and impressive heavy truck business in end markets, should boost TE Connectivity's sales.
Per the Zacks analyst, Lululemon's top-line is gaining from its 2020 strategy. The plan focuses on product innovation, digital growth, enhancing North American store base and international expansion.
Per the Zacks Analyst, Restaurant Brands' (QSR) efficient expansion strategies in allowing all of its brands to disperse in existing and new markets globally have led to revenue growth.
New Downgrades
Per the Zacks analyst, Wells Fargo's bottom line continues to hurt in the absence of significant improvement in cost management. Moreover, retail sales practice' scam issues remain a concern.
Per the Zacks analyst, rising expenses on digitization moves continues to impact First Republic Bank's bottom line. Moreover, further investments in digital initiatives might escalate costs.
The Zacks analyst notes that rising wages and costs related to initiatives could weigh on Cracker Barrel's profits, amid an already challenging sales environment in both retail and restaurant spaces.
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