Top Stock Reports For Facebook, Alibaba & Mastercard
Zacks Investment Research | Dec 27, 2019 01:36AM ET
Friday, December 27, 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 Facebook (NASDAQ:FB) (FB), Alibaba (NYSE:BABA) Group (BABA) and Mastercard (MA). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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Facebook’s shares have outperformed the S&P 500 year to date (+58.5% vs. +27.9%). The Zacks analyst believes that growth in Instagram Stories and Feed, and Facebook News Feed is expected to aid mobile ad revenues.
The company’s initiatives to improve privacy, transparency and authenticity of ads are likely to boost user trust and engagement. The launch of Facebook View app, Facebook Pay and catalogs in the WhatsApp Business app aimed at small businesses is noteworthy. Further, partnerships with ESPN and Fox for sports-related streaming on Facebook Watch are a positive.
However, a persistent mix shift toward Stories is anticipated to hurt ARPU. Also, the company’s rising regulatory headwinds, including the antitrust investigation and the EU’s investigation of Libra, are concerns.
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Shares of Alibaba have gained +29.4% in the past three months against the Zacks Internet Commerce industry’s rise of +13.4%. The Zacks analyst believes that Alibaba is benefiting from steady improvement in core commerce along with strong growth in metrics.
Further, Alibaba’s strengthening cloud business with its expanding customer base continues to drive its performance. Its New Retail strategy is also gaining significant momentum in the market. This is aiding growth in its Tmall Import, Hema fresh food grocery business and Intime Department Stores.
Additionally, the consolidation of Ele.me and Cainiao Network is acting as a tailwind. However, the company’s increasing investments, uncertain economy and macro headwinds in China are major concerns. Also, rising competition poses a risk.
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Mastercard's shares have gained +13.1% over the past six months against the Zacks Financial Transaction Services industry's rise of +8.4%. The Zacks analyst believes that the company's revenues are gaining from higher switched transactions, increase in cross-border volume and gross dollar volume.
Numerous acquisitions made over the years have fueled its inorganic growth. The company is benefiting from shifts in payments, from physical to digital. Investment in technology has also kept the company at the forefront of the rapidly changing payments industry. Its solid capital position enables investment in business.
The Zacks Consensus Estimate for current-year earnings has been revised 1.1% upward over the last 60 days. However, escalating costs might put pressure on margins. In order to gain customers and new business, Mastercard has been incurring high levels of costs under rebates and incentives, which remain a concern.
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Other noteworthy reports we are featuring today include Citigroup (C), Abbott Laboratories (NYSE:ABT) (ABT) and Philip Morris International (PM).
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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 Zacks analyst, Citigroup is working hard on streamlining activities and is focused on cost management.
The Zacks analyst is hopeful about the long-term growth prospects of Abbott's Structural Heart business.
Per the Zacks analyst, Phillip Morris is gaining from reduced risk product sales, which grew 63.4% in the third quarter.
While the ramp up of production at Shanghai Gigafactory is a positive for Tesla, the Zacks analyst is worried about high capex and R&D costs, which may dent profits.
While the impressive production ramp-up at its Fort Hills bodes well for Suncor, the Zacks analyst is worried over pipeline construction in Canada failing to keep pace with the rising domestic oil.
Per the Zacks analyst Exelon's $22.6 billion long term investment plan to strengthen its infrastructure and consistent cash flow generation capability will assist to lower debts and fund growth.
While Dow faces a challenging demand environment in certain markets including agriculture and automotive, it should gain from cost synergy savings and productivity initiatives, per the Zacks analyst.
Per Zacks analyst, Citigroup is working hard on streamlining activities and is focused on cost management.
The Zacks analyst is hopeful about the long-term growth prospects of Abbott's Structural Heart business.
Per the Zacks analyst, Phillip Morris is gaining from reduced risk product sales, which grew 63.4% in the third quarter.
While the ramp up of production at Shanghai Gigafactory is a positive for Tesla, the Zacks analyst is worried about high capex and R&D costs, which may dent profits.
While the impressive production ramp-up at its Fort Hills bodes well for Suncor, the Zacks analyst is worried over pipeline construction in Canada failing to keep pace with the rising domestic oil.
Per the Zacks analyst Exelon's $22.6 billion long term investment plan to strengthen its infrastructure and consistent cash flow generation capability will assist to lower debts and fund growth.
While Dow faces a challenging demand environment in certain markets including agriculture and automotive, it should gain from cost synergy savings and productivity initiatives, per the Zacks analyst.
New Upgrades/h6
The Zacks analyst believes that Berry Global's business restructuring moves will help it offer better services to customers. Also, the RPC Group buyout will continue to lend momentum to the company.
Per the Zacks analyst, product launches, marketing efforts and e-commerce plans for Leadership Brands should keep driving Helen of Troy's sales.
Per the Zacks analyst, improved pharmacy network at EnvisionRxOptions, higher prescription count at retail pharmacies and tight expense control are likely to aid Rite Aid's earnings in fiscal 2020.
The Zacks analyst believes that Berry Global's business restructuring moves will help it offer better services to customers. Also, the RPC Group buyout will continue to lend momentum to the company.
Per the Zacks analyst, product launches, marketing efforts and e-commerce plans for Leadership Brands should keep driving Helen of Troy's sales.
Per the Zacks analyst, improved pharmacy network at EnvisionRxOptions, higher prescription count at retail pharmacies and tight expense control are likely to aid Rite Aid's earnings in fiscal 2020.
New Downgrades/h6
Per the Zacks Analyst, low 737 deliveries as a result of the worldwide grounding of 737 Max jets hurts sales.
Per the Zacks analyst, Arista's fourth-quarter 2019 revenues are likely to fall by almost 8% year over year due to a shift in procurement strategy with lower demand from a significant cloud customer.
Per the Zacks analyst, lower interest rates will put pressure on Associated Banc-Corp's net interest margin. Further, mounting operating expenses will likely hamper profitability in the near-term.
Per the Zacks Analyst, low 737 deliveries as a result of the worldwide grounding of 737 Max jets hurts sales.
Per the Zacks analyst, Arista's fourth-quarter 2019 revenues are likely to fall by almost 8% year over year due to a shift in procurement strategy with lower demand from a significant cloud customer.
Per the Zacks analyst, lower interest rates will put pressure on Associated Banc-Corp's net interest margin. Further, mounting operating expenses will likely hamper profitability in the near-term.
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