Top Research Reports For ExxonMobil, AT&T & Wells Fargo
Zacks Investment Research | Jan 10, 2018 02:53AM ET
Thursday, January 10, 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 ExxonMobil Corp. (XOM), AT&T Inc. (NYSE:T) and Wells Fargo & Co. (WFC). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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ExxonMobil’s shares have underperformed the Zacks Integrated Oil industry (+5% vs. +9.1%) as well as peer Chevron (NYSE:CVX) (+7.1%) in the last three months. The company has a leading position in the energy industry owing to the size and diversity of its asset base, both in terms of business mix and geographical footprint.
With a stable cash position, the company’s balance sheet is one of the best in the industry, reflecting declining debt load over the first nine months of 2017. The Zacks analyst appreciates ExxonMobil’s plans to combine its refining & marketing businesses as this will allow the company to take better decisions and boost performance.
ExxonMobil will generate more cashflow from downstream activities, also helping it counter the volatility in its upstream business. ExxonMobil’s decision to invest in the pre-salt Carcara oil field, comprising as much as 2 billion barrels of high-quality recoverable oil reserves, will boost the company’s production. Moreover, the sixth oil discovery off the coast of Guyana further enhances the prospects of the integrated energy player.
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Shares of AT&T have decreased -1.9% over the past three months, underperforming the Zacks Wireless National industry's fall of -1.3%. AT&T continues to struggle in the competitive U.S. wireless market. Loss in access lines, operating expenses, marketing costs associated with attractive discounts and union issues are other risks. AT&T-Time Warner extended their proposed deal closure deadline to Jun 21, 2018 to clear-off regulatory issues.
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However, the Zacks analyst is optimistic about AT&T’s wireless growth opportunities from the launch of standards-based mobile 5G services in 2018 and the FirstNet project. AT&T’s DIRECTV NOW reported more than 1 million subscribers, despite cord-cutting. Vyatta buyout boosts AT&T’s SD-WAN suite.
AT&T-Verizon have teamed up with Tillman to build cell towers in the United States. AT&T’s NetBond is planning to offer multiple cloud connections. AT&T is exploring a strategic option to sell a major part of its Latin American pay-TV operations.
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Wells Fargo’s shares have outperformed the Zacks Major Banks industry in the last three months, increasing +11.9% vs. a gain of +9.6%. Further, the company has an impressive earnings surprise history. The company surpassed the Zacks Consensus Estimate for earnings in three of the trailing four quarters. Wells Fargo plans $4 billion of cost cuts by 2019.
Rising rates are easing margin pressure to an extent. Notably, following the recent Federal Reserve interest rate hike by 25 bps, Wells Fargo raised its prime lending rate from 4.25% to 4.50%. While the current crisis related to the revelation of illegally opening millions of illegal accounts last year at the company will take some time to alleviate, the Zacks analyst believes that consistent growth in loans and deposits and expansions will likely support its growth profile.
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Other noteworthy reports we are featuring today include ConocoPhillips (NYSE:COP), Honda Motor (HMC) and ABB (ABB).
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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
Per the Zacks analyst, Nucor should gain from its efforts to expand production capacity and grow through acquisitions.
Per the Zacks analyst, Zoetis' industry leading dermatology portfolio with products like Apoquel and Cytopoint, Simparica, and other new companion animal products should drive further growth
The Zacks analyst is bullish about the Chiltern buyout solidifying LabCorp's position in clinical development and accelerating revenue within Covance.
Per the Zacks analyst, prudent acquisitions, such as Sybenetix buyout, will continue to be accretive to Nasdaq's operational performance, thereby resulting in overall growth.
Per the Zacks analyst, Twitter's (TWTR) growing live video initiatives are helping it boost user growth rate, which, in turn, is bringing more ad dollars.
Per the Zacks analyst, impressive performance of ABB's Electrification Products business will continue to lend momentum to the company.
The Zacks analyst believes Orbital ATK will continue to benefit from its research & development work, plus its rising backlog shows the acceptance of its wide variety products among customers.
Per the Zacks analyst, Nucor should gain from its efforts to expand production capacity and grow through acquisitions.
Per the Zacks analyst, Zoetis' industry leading dermatology portfolio with products like Apoquel and Cytopoint, Simparica, and other new companion animal products should drive further growth
The Zacks analyst is bullish about the Chiltern buyout solidifying LabCorp's position in clinical development and accelerating revenue within Covance.
Per the Zacks analyst, prudent acquisitions, such as Sybenetix buyout, will continue to be accretive to Nasdaq's operational performance, thereby resulting in overall growth.
Per the Zacks analyst, Twitter's (TWTR) growing live video initiatives are helping it boost user growth rate, which, in turn, is bringing more ad dollars.
Per the Zacks analyst, impressive performance of ABB's Electrification Products business will continue to lend momentum to the company.
The Zacks analyst believes Orbital ATK will continue to benefit from its research & development work, plus its rising backlog shows the acceptance of its wide variety products among customers.
New Upgrades/h6
Per the Zacks analyst, Kimberly-Clark remains on track with its cost saving program, entitled "FORCE". Further, management predicts the program to reap savings worth $425 to $450 million in 2017.
The Zacks analyst believes that huge acreage holdings in the prospective Eagle Ford Shale play will drive ConocoPhillips' oil production.
Per the Zacks analyst, Diageo is set to keep gaining from focus on acquisitions. Buyouts of Casamigos and Don Julio are likely to boost market share in tequila category and fuel spirit brands sales.
Per the Zacks analyst, Kimberly-Clark remains on track with its cost saving program, entitled "FORCE". Further, management predicts the program to reap savings worth $425 to $450 million in 2017.
The Zacks analyst believes that huge acreage holdings in the prospective Eagle Ford Shale play will drive ConocoPhillips' oil production.
Per the Zacks analyst, Diageo is set to keep gaining from focus on acquisitions. Buyouts of Casamigos and Don Julio are likely to boost market share in tequila category and fuel spirit brands sales.
New Downgrades/h6
Per the Zacks analyst, slowdown in trading revenue, fall in interest income and uncertainty related to Brexit continue hurting Barclays' revenues. Higher legal provisions further hamper profitability.
Per the Zacks analyst, frequent recalls for various reasons, including faulty Takata airbags, have hurt Honda. Also, high R&D expenses associated with Vision 2030 strategy is a concern.
The Zacks analyst believes that the bankruptcy of Toys "R" Us will negatively impact Hasbro's revenues and operating profit in the near term as it constituted almost 10% of the company's sales.
Per the Zacks analyst, slowdown in trading revenue, fall in interest income and uncertainty related to Brexit continue hurting Barclays' revenues. Higher legal provisions further hamper profitability.
Per the Zacks analyst, frequent recalls for various reasons, including faulty Takata airbags, have hurt Honda. Also, high R&D expenses associated with Vision 2030 strategy is a concern.
The Zacks analyst believes that the bankruptcy of Toys "R" Us will negatively impact Hasbro's revenues and operating profit in the near term as it constituted almost 10% of the company's sales.
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