Top Research Reports For Visa, Bank Of America & Lockheed Martin
Zacks Investment Research | Jul 24, 2019 02:50AM ET
Wednesday, July 24, 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 Visa (V), Bank of America (BAC) and Lockheed Martin (LMT). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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Visa’s shares have outperformed the Zacks Financial Transaction Services industry in the past year, gaining +26.7% vs. a +23.3% increase. Visa's earnings beat expectations and grew 14% year over year, led by growth in payments volume, cross-border volume and processed transactions.
The Zacks analyst thinks numerous acquisitions and alliances plus technology upgrades and effective marketing have paved the way for long-term growth and consistent increase in revenues. The acquisition of Visa Europe is a long-term growth driver for the company. Its international business has been expanding and adds diversification benefits.
The company’s strong capital position facilitates business investments. However, high client incentives and expenses are weighing on its operating margin. Foreign exchange volatility imparts instability to the company’s earnings.
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Shares of Bank of America have outperformed the Zacks Major Regional Banks in the year-to-date period, gaining +23.2% vs. +17.8%. The bank's earnings have surpassed expectations in each of the trailing four quarters. Its second-quarter 2019 results reflected strong consumer banking performance amid a tough operating backdrop.
The Zacks analyst thinks opening of branches in new regions, improved digital offerings, decent loan growth and efforts to control costs will aid profitability despite the Fed’s dovish monetary policy stance. Its enhanced capital deployment actions are likely to result in a strong balance sheet position.
However, dismal performance of capital markets continues to hurt the company’s investment banking and trading businesses, which in turn will hamper fee income growth. Litigation issues related to business misconduct in the pre-crisis period are likely to lead to higher legal costs.
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Lockheed Martin’s shares have gained +11.7% in the past year, outperforming the Zacks Aerospace Defense industry which has gained +5.2% over the same period. Lockheed Martin ended second-quarter 2019 on an impressive note, with both earnings and revenues surpassing their respective expectations.
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The Zacks analyst thinks that being the largest defense contractor in the world, the company enjoys strong demand for its high-end military equipment in domestic and international markets. As a result, it witnesses solid order growth. However, the company’s high debt-to-equity ratio shows that the stock is highly leveraged when compared with its industry.
Lockheed Martin also faces intense global competition for its broad portfolio of products and services. Additionally, suspension of the Turkish contract for the F-35 program may hurt the company’s operating results.
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Other noteworthy reports we are featuring today include U.S. Bancorp (USB), Morgan Stanley (NYSE:MS) and Goldman Sachs (GS).
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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 Zacks analyst, U.S. Bancorp is poised to enhance interest income driven by steady growth in loans and rising interest rates. However, increasing costs are an unfavorable factor.
Per the Zacks analyst, Goldman's cost control efforts are driving operational efficiency. Yet, legal issues and persistent weak fixed-income trading revenues remain concerns.
Per the Zacks analyst, efforts to strengthen wealth management business and corporate lending will support Morgan Stanley. However, slump in trading and investment banking will hamper growth.
The Zacks analyst expects acquisitions to help IHS Markit expand its offerings and strengthen its international footprint.
Per the Zacks analyst, cost savings from restructuring actions should support PPG Industries' margins.
The Zacks analyst is concerned that a conservative approach to capital expenditure from North American E&P operators will result in declining demand for Halliburton's services.
Per the Zacks analyst, acquisitions and cost-saving initiatives bode well for RPM.
Per Zacks analyst, U.S. Bancorp is poised to enhance interest income driven by steady growth in loans and rising interest rates. However, increasing costs are an unfavorable factor.
Per the Zacks analyst, Goldman's cost control efforts are driving operational efficiency. Yet, legal issues and persistent weak fixed-income trading revenues remain concerns.
Per the Zacks analyst, efforts to strengthen wealth management business and corporate lending will support Morgan Stanley. However, slump in trading and investment banking will hamper growth.
The Zacks analyst expects acquisitions to help IHS Markit expand its offerings and strengthen its international footprint.
Per the Zacks analyst, cost savings from restructuring actions should support PPG Industries' margins.
The Zacks analyst is concerned that a conservative approach to capital expenditure from North American E&P operators will result in declining demand for Halliburton's services.
Per the Zacks analyst, acquisitions and cost-saving initiatives bode well for RPM.
New Upgrades/h6
Per the Zacks analyst, MPLX will gain heavily from the Andeavor Logistics buyout, which is expected to result in increased project backlog and boost its export capabilities.
Per the Zacks analyst, Blueprint Medicines' lead candidate, avapritinib, holds great potential to treat several types of cancers. Other pipeline candidates too are progressing well.
Per the Zacks analyst, Alibaba continues to benefit from its strong core e-commerce business, new investments in Asia, international growth opportunities and growing cloud computing services.
Per the Zacks analyst, MPLX will gain heavily from the Andeavor Logistics buyout, which is expected to result in increased project backlog and boost its export capabilities.
Per the Zacks analyst, Blueprint Medicines' lead candidate, avapritinib, holds great potential to treat several types of cancers. Other pipeline candidates too are progressing well.
Per the Zacks analyst, Alibaba continues to benefit from its strong core e-commerce business, new investments in Asia, international growth opportunities and growing cloud computing services.
New Downgrades/h6
Per the Zacks analyst, exposure to a competitive reinsurance market and rising debt, which induces high interest expenses, are major concerns. Exposure to cat loss induces underwriting volatility.
Per the Zacks analyst, Synopsys is bothered by the rising competition from EDA vendors, such as Cadence Design (NASDAQ:CDNS) Systems. Moreover, Sino-U.S trade spat persists as a key headwind.
Per the Zacks analyst, higher costs due to inorganic growth efforts are likely to hurt Bank OZK's bottom-line growth to an extent. Also, continued pressure on net interest margin remains a concern.
Per the Zacks analyst, exposure to a competitive reinsurance market and rising debt, which induces high interest expenses, are major concerns. Exposure to cat loss induces underwriting volatility.
Per the Zacks analyst, Synopsys is bothered by the rising competition from EDA vendors, such as Cadence Design (NASDAQ:CDNS) Systems. Moreover, Sino-U.S trade spat persists as a key headwind.
Per the Zacks analyst, higher costs due to inorganic growth efforts are likely to hurt Bank OZK's bottom-line growth to an extent. Also, continued pressure on net interest margin remains a concern.
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