Top Analyst Reports For Verizon, McDonald's & TOTAL
Zacks Investment Research | Nov 05, 2019 03:57AM ET
Tuesday, November 5, 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 Verizon Communications Inc (NYSE:VZ). (VZ), McDonald's (MCD) and TOTAL (TOT). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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Verizon’s shares have outperformed the Zacks Wireless National industry year to date (19.1% vs. 6.5%). The Zacks analyst believes that Verizon has embarked on a new operating structure with Verizon 2.0 that aims to align the business model with evolving customer needs.
Focus on online content delivery, mobile video and online advertising will likely drive future growth. Verizon aims to cut costs through employee reduction and divestments as it ramps up investment in its next-generation 5G network, which is expected to be the next growth driver. The company has also upped the ante against rivals by launching 5G Ultra Wideband network in select locations of the country.
However, it continues to struggle in a competitive U.S. wireless market. The company's wireline division is struggling with losses in access lines due to competitive pressure from VoIP service providers. Verizon is spending heavily on promotion and lucrative discounts to woo customers, which contracts margins.
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Shares of McDonald's have lost 5.1% in the past six months against the Zacks Restaurants industry’s decline of 2.1%. The Zacks analyst believes that the company’s increased focus on delivery and accelerated deployment of EOTF restaurants in the United States is an added positive. These apart, efforts to drive growth in international markets are encouraging.
In second-quarter 2019, the company posted mixed results, wherein earnings missed the estimate but revenues beat the same. Notably, its various sales and digital initiatives as well as positive comps bode well. Furthermore, global comps at McDonald’s have been positive over the trailing 16 quarters.
However, high labor costs and currency headwinds woes linger. Additionally, revenues have been under pressure for quite some time. Even its heightened focus on refranchising might cut the capital requirements and facilitate EPS growth.
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TOTAL’s shares have gained 10.4% over the past three months against the Zacks International Integrated Oil industry’s rise of 3.1%. The Zacks analyst believes that Ongoing fluctuation in the commodity prices is hurting the company despite growth in production volumes.
TOTAL's operations in some politically-troubled regions and increasing competition might impact the company’s profitability. Due to its global presence, it is exposed to risks associated with pursuing business abroad. However, TOTAL continues to benefit from strong contribution from new startups and expanding upstream portfolio that has above industry-average exposure to the faster-growing hydrocarbon producing regions of the world.
Cost reduction initiatives will boost the margins of the company. Strategic acquisitions and divestment of assets that are not in sync with its long-term objectives are going to boost performance of the company.
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Other noteworthy reports we are featuring today include Amgen (AMGN), Broadcom (NASDAQ:AVGO) (AVGO) and UPS (UPS).
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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
Today's Must Read/h6
Featured Reports/h6
While Amgen's newer drugs are driving sales, biosimilar and brand competition for its legacy products is hurting the top-line, points out the Zacks analyst.
Per the Zacks analyst, Broadcom is benefiting from its expanding product portfolio and innovative pipeline.
The Zacks analyst likes the robust free cash flow generation at UPS. E-commerce growth is an added positive.
Per the Zacks analyst, label expansion of blockbuster drug Opdivo and blood thinner drug Eliquis maintain momentum for Bristol-Myers. However, increasing competition for Opdivo is a concern.
The Zacks analyst is bullish about the huge synergy benefit that CVS Health has been gaining from the $70 billion buyout of Aetna. Strong 2020 PBM selling season is another upside.
Rising drilling activities in the international market will continue to boost demand for Schlumberger's oilfield service.
Per the Zacks analyst, while continued loan growth and BB&T's inorganic growth efforts are expected to aid top line, its net interest margin will likely be hurt due to the recent decline in rates.
While Amgen's newer drugs are driving sales, biosimilar and brand competition for its legacy products is hurting the top-line, points out the Zacks analyst.
Per the Zacks analyst, Broadcom is benefiting from its expanding product portfolio and innovative pipeline.
The Zacks analyst likes the robust free cash flow generation at UPS. E-commerce growth is an added positive.
Per the Zacks analyst, label expansion of blockbuster drug Opdivo and blood thinner drug Eliquis maintain momentum for Bristol-Myers. However, increasing competition for Opdivo is a concern.
The Zacks analyst is bullish about the huge synergy benefit that CVS Health has been gaining from the $70 billion buyout of Aetna. Strong 2020 PBM selling season is another upside.
Rising drilling activities in the international market will continue to boost demand for Schlumberger's oilfield service.
Per the Zacks analyst, while continued loan growth and BB&T's inorganic growth efforts are expected to aid top line, its net interest margin will likely be hurt due to the recent decline in rates.
New Upgrades/h6
Per the Zacks analyst, Activision's foray into e-sports and user base expansion from strength in popular franchises are driving top-line growth.
Per the Zacks analyst, Ollie's Bargain business model of "buying cheap and selling cheap", focus on store productivity and expansion of customer reward program is likely to fuel top-line performance.
Per the Zacks analyst, solid growth in Service and Custodial segments continue to boost HealthEquity. Robust growth in HSA (Health Savings Account) members continues to buoy optimism in the stock.
Per the Zacks analyst, Activision's foray into e-sports and user base expansion from strength in popular franchises are driving top-line growth.
Per the Zacks analyst, Ollie's Bargain business model of "buying cheap and selling cheap", focus on store productivity and expansion of customer reward program is likely to fuel top-line performance.
Per the Zacks analyst, solid growth in Service and Custodial segments continue to boost HealthEquity. Robust growth in HSA (Health Savings Account) members continues to buoy optimism in the stock.
New Downgrades/h6
Per the Zacks analyst, soft own-beer volumes due to declines in China and the United States more than offset the growth in non-beer volumes, causing total volumes to decline in third-quarter 2019.
Per the Zacks analyst, sluggish global auto production remains a headwind for TE Connectivity's Transportation Solutions segment. Also, rising competition from Amphenol (NYSE:APH) and Molex is a risk.
Per the Zacks analyst, declining demand for heavy trucks is likely to mar its prospects in both domestic and international regions, going forward.
Per the Zacks analyst, soft own-beer volumes due to declines in China and the United States more than offset the growth in non-beer volumes, causing total volumes to decline in third-quarter 2019.
Per the Zacks analyst, sluggish global auto production remains a headwind for TE Connectivity's Transportation Solutions segment. Also, rising competition from Amphenol (NYSE:APH) and Molex is a risk.
Per the Zacks analyst, declining demand for heavy trucks is likely to mar its prospects in both domestic and international regions, going forward.
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