Top Stock Reports For Chevron, Glaxo & T-Mobile
Zacks Investment Research | Jun 12, 2018 11:00PM ET
Wednesday, June 13, 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 Chevron (CVX), Glaxo (GSK) and T-Mobile (TMUS). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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Strong Buy-ranked Chevron’s shares have risen +19.3% in the past year, nearly in line with the Zacks Integrated Oil industry's +19.5% increase, while larger rival Exxon Mobil (NYSE:XOM) has seen its scrip go up a meagre +0.4% over the same time period. Shares of the company, which has survived the worst oil crash in more than 50 years, now sit near 52-week highs.
The blue-chip energy company is up more than 100% off its August 2015 lows and poised for further capital appreciation, riding on its healthy earnings growth prospects. Chevron’s existing oil and gas development project pipeline is among the best in the industry, targeting volume growth of 4-7% in 2018.
The Zacks analyst thinks production increase will be driven by Australian LNG megaprojects, as well as Chevron’s stellar Permian operations. Chevron has been able to bolster its cash from operations, allowing it to recently raise its dividend.
The company’s balance sheet seems healthy enough and the dividend yield of nearly 4% should remain safe going forward. Apart from rising commodity prices, conservative capital spending and cost control would ensure rapidly improving cash flow.
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Shares of Glaxo have outperformed the Zacks Large Cap Pharmaceuticals industry year to date, gaining +16.1% versus the industry’s -4.4% decline. The Zacks analyst likes Glaxo’s efforts to develop its pipeline. Performance of new products has been encouraging.
Meanwhile, back-to-back approvals of three new products – Trelegy Ellipta, Shingrix and Juluca – and the agreement to buy out Novartis’ shareholding in the Consumer Healthcare JV – have strengthened Glaxo’s competitive position. However, persistent challenges like stiff competition, genericization, pricing pressure and slowing growth in emerging markets have been hurting sales.
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Pricing pressure and competitive dynamics are hurting sales in Glaxo’s inhaled respiratory products, particularly the older products. Meanwhile, its top-selling product, Advair is also expected to face generic competition in the United States this year, which will further hurt sales. The slowdown in sales of the Consumer Healthcare segment is also a concern.
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T-Mobile’s shares have underperformed the Zacks National Wireless industry over the last three months, losing -10.3% vs. -3.3%. T-Mobile has rolled out 600 MHz wireless spectrum in its footprints and has conducted Narrowband Internet of Things tests.
T-Mobile and Sprint have agreed to merge. The Zacks analyst thinks the deal will help to accelerate development of faster 5G wireless networks. The combined company would have about 127 million customers. It will have the network capacity to rapidly create a nationwide 5G network. T-Mobile’s innovative network expansion methodologies continue to be faster and technologically sounder.
A competitive and saturated wireless market and high costs of the low-priced promotional plans remain major headwinds. The company has increased its top-line by adding customers but compromised its profitability. Industry consolidation and intense competition could limit T-Mobile’s ability to attract and retain customers and may adversely affect its operating results.
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Other noteworthy reports we are featuring today include Delta Air Lines (NYSE:DAL), Consolidated Edison (ED) and American Water Works (AWK).
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Today's Must Read/h6
Featured Reports/h6
Per the Zacks analyst, Consolidated Edison's systematic investment plan aids in its infrastructural development. Yet adverse ruling related to the latest winter storm cost may hurt the stock.
Quality Systems' acquisitions of Entrada and Eagle Dream have proven to be accretive. The Zacks analyst is bearish about the stiff competition in the MedTech space.
Per the Zacks analyst, Greif is poised to gain from focus on capital-expansion projects and elevated demand. However, significant increase in steel prices due to tariffs will thwart its performance.
The Zacks analyst believes that TripAdvisor's growth in non-hotel business, Instant Booking initiative and partnerships will drive growth going forward.
Per the Zacks analyst international opportunities and a diversified suite of trading products has led to high trading volumes driving revenues.
The Zacks analyst stresses that RH's shift from a promotional to a membership business model has enhanced customer experience and reduced costs.
Per the Zacks analyst, Federal Realty's efforts to revamp properties and expand portfolio position it well for growth.
Per the Zacks analyst, Consolidated Edison's systematic investment plan aids in its infrastructural development. Yet adverse ruling related to the latest winter storm cost may hurt the stock.
Quality Systems' acquisitions of Entrada and Eagle Dream have proven to be accretive. The Zacks analyst is bearish about the stiff competition in the MedTech space.
Per the Zacks analyst, Greif is poised to gain from focus on capital-expansion projects and elevated demand. However, significant increase in steel prices due to tariffs will thwart its performance.
The Zacks analyst believes that TripAdvisor's growth in non-hotel business, Instant Booking initiative and partnerships will drive growth going forward.
Per the Zacks analyst international opportunities and a diversified suite of trading products has led to high trading volumes driving revenues.
The Zacks analyst stresses that RH's shift from a promotional to a membership business model has enhanced customer experience and reduced costs.
Per the Zacks analyst, Federal Realty's efforts to revamp properties and expand portfolio position it well for growth.
New Upgrades/h6
The Zacks analyst believes American Water Works rising customer base through organic and inorganic means and investment of $8.0-$8.6 billion between 2018 to 2022 will boost its performance.
The Zacks analyst is impressed by Whiting Petroleum's top-tier acreage in the Bakken shale play, which has been boosting its production growth and helping in strong cash-flow generation.
Per the Zacks analyst, BJ's Restaurants' streamlined and innovative menu along with various technology-driven initiatives like hand-held ordering tablets are driving top and bottom-line growth.
The Zacks analyst believes American Water Works rising customer base through organic and inorganic means and investment of $8.0-$8.6 billion between 2018 to 2022 will boost its performance.
The Zacks analyst is impressed by Whiting Petroleum's top-tier acreage in the Bakken shale play, which has been boosting its production growth and helping in strong cash-flow generation.
Per the Zacks analyst, BJ's Restaurants' streamlined and innovative menu along with various technology-driven initiatives like hand-held ordering tablets are driving top and bottom-line growth.
New Downgrades/h6
Per the Zacks analyst, inability to recover uninsured wildfire-related costs may affect SCE's financial condition. Also, adverse regulatory decisions for its 2018 GRC application may hurt performance.
The Zacks analyst is concerned about the rise in fuel costs, which should limit bottom-line growth. Moreover, expenses on the labor front are also likely to weigh on the bottom line.
The Zacks analyst is concerned about Itron's margin performance which is likely to be weighed down by industry supply chain headwinds, pricing issues and elevated expenses.
Per the Zacks analyst, inability to recover uninsured wildfire-related costs may affect SCE's financial condition. Also, adverse regulatory decisions for its 2018 GRC application may hurt performance.
The Zacks analyst is concerned about the rise in fuel costs, which should limit bottom-line growth. Moreover, expenses on the labor front are also likely to weigh on the bottom line.
The Zacks analyst is concerned about Itron's margin performance which is likely to be weighed down by industry supply chain headwinds, pricing issues and elevated expenses.
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