Top Research Reports For Comcast, ConocoPhillips & Delta Air Lines
Zacks Investment Research | Oct 30, 2018 11:39PM ET
Wednesday, October 31, 2018
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), ConocoPhillips (NYSE:COP) and Delta Air Lines (NYSE:DAL). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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Buy-ranked Comcast’s shares have outperformed the Zacks Cable Television industry year to date, losing -5.8% vs. -11.4% in the space. Comcast’s third-quarter 2018 results benefited from solid growth in the number of residential high-speed Internet customers.
Advertising revenues also increased due to higher spending on political advertising. Moreover, strong adoption of Xfinity Home drove top-line growth. The Zacks analyst thinks the nationwide rollout of the DOCSIS 3.1 technology and the completion of the nationwide rollout of Comcast’s wireless services under the Xfinity Mobile brand will continue to boost subscriber base. Partnerships with the likes of Charter, Netflix (NASDAQ:NFLX) and Amazon (NASDAQ:AMZN) Prime are other positives.
The Sky acquisition expands Comcast’s international reach. Sky’s content portfolio strength is a major growth driver. However, the company continues to lose voice and video subscribers due to cord-cutting and stiff competition. Additionally, high debt level is a headwind.
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Shares of Buy-ranked ConocoPhillips are up +33.5% over the past year, outperforming the Zacks U.S. Integrated Oil industry, which has gained +13.7% over the same period. In terms of production and proved reserves, ConocoPhillips is the largest oil and gas exploration and production (E&P) player in the world.
The company recently reported strong third-quarter 2018 results, courtesy of higher oil realizations and strong volumes from unconventional assets. The Zacks analyst thinks there are significant opportunities for the upstream energy player in the Eagle Ford where it owns about 3,400 undrilled locations. In fact, a strong focus on two other prospective resources like Delaware basin and Bakken shale is expected to help ConocoPhillips achieve its target of 22% CAGR of production through 2017 to 2020.
Importantly, through 2017, the firm had lowered its debt load by 30%, thereby enhancing its credit rating. Consequently, ConocoPhillips offers substantial upside potential from the current price levels and is a preferred E&P company to own now.
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Delta Air Lines’ shares have lost -1.5% year to date, outperforming the Zacks Airline industry's -21.8% decline. The stock has also outperformed fellow airline heavyweight, American Airlines, which has declined -33.4% in the same time frame. Delta performed impressively in the third quarter of 2018, despite high fuel costs. Both earnings and revenues surpassed the respective estimates and improved year over year.
Strong demand for air travel aided results, causing passenger revenues to increase 8.2%. Anticipating travel demand to remain strong, Delta raised its view pertaining to revenue growth for 2018. The Zacks analyst is also impressed by the company's efforts to reward its shareholders.
Despite the robust third-quarter performance, the threat posed by rising fuel costs, which increased 32.1% in the third quarter, is a major concern. Also, its fuel bill rose 35% in the quarter. Fuel costs are anticipated to be between $2.47 and $2.52 per gallon in the final quarter of 2018. Expenses on the labor front might also limit bottom-line growth.
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Other noteworthy reports we are featuring today include ServiceNow (NOW), Xcel Energy (XEL) and Zimmer Biomet (ZBH).
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Per the Zacks analyst, ServiceNow benefits from expanding Global 2000 (G2K) customer base undergoing digital transformation. Further, strategic alliances with the likes of Microsoft (NASDAQ:MSFT) are a tailwind.
Per the Zacks analyst long-term investment plans and improving economic conditions in service territories will strengthen Xcel Energy's existing operations.
Per Zacks analyst, with focus on quality remediation, product launches and supply recovery efforts, Zimmer Biomet sees growth within S.E.T arm. Adverse currency movements continue to dent revenues.
Per the Zacks Analyst, strategic investments in infrastructure projects will drive DTE Energy's future performance.
Per the Zacks analyst, Check Point is benefiting from strong growth in security subscriptions.
The Zacks analyst is encouraged by the increase in domain name base, renewal of the .com contract and price hikes for the .com and .net domain names.
Per the Zacks analyst, loan growth, rise in interest rates, focus on non-interest income and global expansion aid SVB Financial.
New Upgrades
The Zacks analyst is impressed with the strong uptake of Omnicell's XT series which is helping it to gain good momentum in automation and analytics business. New strategic deals should drive growth.
Per the Zacks analyst, the strategy to develop products with superior design and alignment of production to demand, is aiding Cooper Tire. Also, its plans to curb manufacturing costs are helping it.
Per the Zacks analyst, the increase in finance charges, driven by continued growth in consumer loans are expected to continue supporting Credit Acceptance's revenues.
New Downgrades
Per the Zacks analyst, Altra Industrial Motion is struggling with poor performance of Electromagnetic Clutches & Brakes business. Also, constrained margins and high operating costs concerns remain.
Per the Zacks analyst, sluggishness in client compute hard drives, slower-than-expected trends in flash market pricing and stiff competition are key negatives.
Cerner saw lackluster performance in its Licensed Software unit. The Zacks analyst is also pessimistic about decline in the company's Subscription revenues.
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