Top Research Reports For May 1, 2017
Zacks Investment Research | May 01, 2017 03:42AM ET
Monday May 1, 2017
Today's Research Daily features new research reports on 17 major stocks, including Microsoft (MSFT), Intel (INTC), 3M (MMM) and UPS (UPS).
Microsoft shares lagged the Zacks Tech sector through the fall, but have led the way over the last six months (up +15.2% versus +14.6%) on greater appreciation for the company's reorganization and repositioning. Microsoft reported impressive third-quarter fiscal 2017 results beating expectations on both lines.
The Zacks analyst stress that results demonstrated continuing enterprise strength, strong Office 365 adoption and robust penetration of Azure. Further, the addition of LinkedIn (NYSE:LNKD) has improved the company's presence in the social media market. The recently announced Dies acquisition and investment in Flipkart are other positives.
All in all, the company has emerged as a leader in the cloud space that promises momentum on a number of fronts. However, a strong U.S. dollar and stiff competition remain major concerns. (You can )
Shares of Intel have gained only +4.1% since election results were announced on Nov 8, lagging the broader Tech sector (up +12.8%) as well as the red-hot semiconductors space (up +21.9%). Intel’s first-quarter 2017 results demonstrated a turnaround in the company’s businesses after a long time.
The improving PC shipment data – as per Gartner and IDC – is positive for the company. The upcoming launch of Skylake is anticipated to benefit data center results in the second half. Moreover, the company revised up its 2017 revenue and EPS outlook based on improving average selling price (ASP).
The Zacks analyst sees the Data center business as promising. Further, growing clout in the Internet of Things (IoT) and autonomous driving market are key catalysts. (You can )
Buy rated 3M shares have gained +18.2% over the last six months, outperforming the Zacks Diversified Operations industry, which has gained +11.3% over the same period. 3M started 2017 on a positive note with strong first-quarter results. The Zacks analyst likes 3M's global footprint, diversified product portfolio and ability to penetrate different markets.
During 2016–2020, 3M expects 8–11% growth in earnings per share driven by an organic sales growth of 2–5%. 3M is standardizing its business processes through a new, global ERP system and expects $500 to $700 million in annual operational savings by 2020.
The company has raised its earlier guidance for 2017 on strong quarterly results and improved business outlook. However, the company is facing increased pension expenses as its workforce begins to retire. In addition, the company is susceptible to high commodity price risks. (You can )
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Shares of United Parcel Service (NYSE:UPS) shares rallied 2.6% in the last one year, underperforming the Zacks Transportation-Air Freight industry’s gain of 3.7% in the period. Shares of UPS have also lagged those of rival FedEx (NYSE:FDX), which have gained 13.2% in the same time span. However, United Parcel reported better-than-expected earnings and revenues in the first quarter of 2017.
The outperformance came despite headwinds like higher fuel costs and foreign exchange-related issues. Results were aided by the substantial increase in operating profit of the Supply Chain and Freight unit. Additionally, the Zacks analyst likes the company's efforts to reward shareholders. Moreover, United Parcel Service's expansion-related efforts raise optimism in the stock. (You can )
Other noteworthy reports we are featuring today include Starbucks (SBUX), Raytheon (RTN) and State Street (STT).
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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
The Zacks analyst thinks Northern Trust's rising revenue bolsters organic growth, while lower provisions boost bottom-line growth. Further, focus on initiating new business is commendable.
The covering analyst thinks State Street remains well poised for top line growth given its investment in new products and new business wins.
The Zacks analyst is bullish on C.R. Bard posting strong numbers in Q1 from a solid product portfolio. The company also gained prominence in the market on a series of regulatory approvals.
O'Reilly's first-quarter adjusted earnings and revenues missed estimates while comparable store sales growth was low.
Despite a better-than-expected Q1 show by Zimmer Biomet, the covering analyst is discouraged by its lowered 2017 guidance.
The Q3 earnings beat apart, the Zacks analyst believes that Lam's exposure to memory manufacturers and opportunity in logic and foundry segments are positives.
The covering analyst thinks the results demonstrated that the company continues to benefit from ongoing shift toward non-PC applications and growing exposure to the small and medium business space.n
The Zacks analyst thinks Northern Trust's rising revenue bolsters organic growth, while lower provisions boost bottom-line growth. Further, focus on initiating new business is commendable.
The covering analyst thinks State Street remains well poised for top line growth given its investment in new products and new business wins.
The Zacks analyst is bullish on C.R. Bard posting strong numbers in Q1 from a solid product portfolio. The company also gained prominence in the market on a series of regulatory approvals.
O'Reilly's first-quarter adjusted earnings and revenues missed estimates while comparable store sales growth was low.
Despite a better-than-expected Q1 show by Zimmer Biomet, the covering analyst is discouraged by its lowered 2017 guidance.
The Q3 earnings beat apart, the Zacks analyst believes that Lam's exposure to memory manufacturers and opportunity in logic and foundry segments are positives.
The covering analyst thinks the results demonstrated that the company continues to benefit from ongoing shift toward non-PC applications and growing exposure to the small and medium business space.n
New Upgrades/h6
The Zacks analyst thinks year over year improved performance led to Raytheon's better-than-expected Q1 results, with missile systems as a major contributor. Its raised outlook further buoys optimism
Roper's Q1 results were driven by growth across all segments. Per the covering analyst, Roper's distinctive business model, acquisitions, winning of key projects will continue to drive long term growth.
The Zacks analyst is bullish on Baxter's solid first quarter, wherein earnings beat the Zacks Consensus Estimate. Baxter's pipeline of IV solutions, APD cyclers and HOMECHOICE CLARIA boosted growth.
The Zacks analyst thinks year over year improved performance led to Raytheon's better-than-expected Q1 results, with missile systems as a major contributor. Its raised outlook further buoys optimism
Roper's Q1 results were driven by growth across all segments. Per the covering analyst, Roper's distinctive business model, acquisitions, winning of key projects will continue to drive long term growth.
The Zacks analyst is bullish on Baxter's solid first quarter, wherein earnings beat the Zacks Consensus Estimate. Baxter's pipeline of IV solutions, APD cyclers and HOMECHOICE CLARIA boosted growth.
New Downgrades/h6
Alkermes posted wider- than- expected loss and missed revenues. The company remains focused on pipeline candidates targeting schizophrenia, addiction, depression and multiple sclerosis.
KBR's Q1 adjusted earnings were in line with estimates. However, losses and reduced work on the Engineering & Construction projects, coupled with oil & gas market volatility, hurt its profits.
SBUX's Q2 earnings were in line with estimates but missed on revenues amid persistent decline in U.S. restaurant sales. The covering analyst is discouraged by its lowered fiscal 2017 EPS guidance.
Alkermes posted wider- than- expected loss and missed revenues. The company remains focused on pipeline candidates targeting schizophrenia, addiction, depression and multiple sclerosis.
KBR's Q1 adjusted earnings were in line with estimates. However, losses and reduced work on the Engineering & Construction projects, coupled with oil & gas market volatility, hurt its profits.
SBUX's Q2 earnings were in line with estimates but missed on revenues amid persistent decline in U.S. restaurant sales. The covering analyst is discouraged by its lowered fiscal 2017 EPS guidance.
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