Top Stock Reports For Facebook, UPS & PepsiCo
Zacks Investment Research | Dec 12, 2017 04:40AM ET
Tuesday, December 12, 2017
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), UPS (UPS) and PepsiCo (PEP). 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 index over the past year, gaining +48.8% vs. +17.3%. Facebook's efforts in mobile and live videos continue to pay off in a big way. Instagram remains another important revenue stream. Apart from mobile and video, the monetization opportunities of the company’s other subsidiaries – Messenger, WhatsApp and Oculus – and a huge user base/higher engagement levels are expected to drive growth going ahead.
Facebook is also dabbling in AR/VR and AI technologies, which bodes well for long-term growth. However, the recent uproar caused by apparent use of the platform by Russian elements for interfering in the presidential elections has put Facebook in a spot. As a result, Facebook CEO has said that it will make sizable investments to tighten security on the platform, which, along with continued investments in video, AR/VR and AI, will dent operating margins going forward.
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Shares of UPS have underperformed the Zacks Air Freight and Cargo industry as well as rival FedEx (NYSE:FDX) on a year-to-date basis. While UPS has gained +2.9% of its value, the industry it belongs to and FedEx have rallied +11.6% and +28.1%, respectively, in the same period.
Moreover, the ongoing holiday season might prove to be a dampener for UPS due to the unprecedented surge in demand. Order volumes have surged courtesy the rapid e-commerce growth. UPS, however, is also leaving no stone unturned to meet the demand increase.
Despite its efforts, high delivery costs might hurt the company’s fourth-quarter results. However, the Zacks analyst is encouraged by the company’s efforts to reward shareholders through buybacks and dividend payments. The company's efforts to expand globally also raise optimism in the stock.
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PepsiCo’s shares have gained +12.2% year to date, underperforming the Zacks Soft Beverages industry, which has increased +13.9% over the same period. PepsiCo has been doing well on the back of significant innovation, continued momentum in Frito-Lay business, revenue management strategies, improved productivity and cost-saving initiatives, along with better market execution.
An improving economy, better industry pricing dynamics and consistency in positive innovation bode well. It rolled out several products recently which management believes will drive sales and profits in 2017. That said, growing health awareness has been hurting the CSD category, resulting in a 4% volume decline in the first nine months of 2017 in North America. Again, rising volatility in global markets and increasing currency headwinds may dampen growth.
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Other noteworthy reports we are featuring today include AT&T (T), Costco (COST) and NextEra (NEE).
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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 likes Delta's performance with respect to unit revenues. Efforts to reward shareholders are also encouraging.
Per the Zacks analyst, although RenaissanceRe's top line grows on premiums, continuously rising level of debt weighs on the company's bottom line.
Per the Zacks analyst, Navistar is gaining from new products & improved Class 8 lineup. Also, cost-saving initiatives like engine restructuring and reductions in discretionary spending are aiding the
Per the Zacks analyst, International Paper intends to invest $300 million through 2017 to improve product quality and reduce costs to counter volatility in raw material prices and pension headwinds.
Costco boasts impressive comparable sales run. Per the Zacks analyst, better price management and operational efforts should fuel sales.
Per the Zacks analyst, higher net inflows should continue to aid Blackstone's assets under management growth.
New drug approvals are also expected to boost growth for Valeant and offset the weakness in the dermatology segment.
The Zacks analyst likes Delta's performance with respect to unit revenues. Efforts to reward shareholders are also encouraging.
Per the Zacks analyst, although RenaissanceRe's top line grows on premiums, continuously rising level of debt weighs on the company's bottom line.
Per the Zacks analyst, Navistar is gaining from new products & improved Class 8 lineup. Also, cost-saving initiatives like engine restructuring and reductions in discretionary spending are aiding the
Per the Zacks analyst, International Paper intends to invest $300 million through 2017 to improve product quality and reduce costs to counter volatility in raw material prices and pension headwinds.
Costco boasts impressive comparable sales run. Per the Zacks analyst, better price management and operational efforts should fuel sales.
Per the Zacks analyst, higher net inflows should continue to aid Blackstone's assets under management growth.
New drug approvals are also expected to boost growth for Valeant and offset the weakness in the dermatology segment.
New Upgrades/h6
The Zacks analyst believes investments made by NextEra to strengthen its clean energy portfolio and consistent rise in customer count is going to boost its performance.
The Zacks analyst believes Intuitive Surgical has been gaining significantly on the CE Mark and FDA approval for da Vinci X Robotic Platform. The company is spending on product development of late.
The Zacks analyst believes that the agreement to receive guaranteed payments worth $3.2 billion for the Vogtle nuclear plant by Dec 15 will help Southern Company (NYSE:SO) reduce its financing costs.
The Zacks analyst believes investments made by NextEra to strengthen its clean energy portfolio and consistent rise in customer count is going to boost its performance.
The Zacks analyst believes Intuitive Surgical has been gaining significantly on the CE Mark and FDA approval for da Vinci X Robotic Platform. The company is spending on product development of late.
The Zacks analyst believes that the agreement to receive guaranteed payments worth $3.2 billion for the Vogtle nuclear plant by Dec 15 will help Southern Company (NYSE:SO) reduce its financing costs.
New Downgrades/h6
Per the Zacks analyst since American Electric Power enters into contracts to sell power in the spot market, it faces the risk of volatile market prices, which could affect its margins and revenues.
The Zacks Analyst is pessimistic about AT&T's struggle in the competitive U.S. wireless market. Regulatory norms and threat from online video streaming service providers are others risks.
The Zacks analyst believes labor shortage along with rising land and labor costs pose a threat to the company's margins.
Per the Zacks analyst since American Electric Power enters into contracts to sell power in the spot market, it faces the risk of volatile market prices, which could affect its margins and revenues.
The Zacks Analyst is pessimistic about AT&T's struggle in the competitive U.S. wireless market. Regulatory norms and threat from online video streaming service providers are others risks.
The Zacks analyst believes labor shortage along with rising land and labor costs pose a threat to the company's margins.
Zacks Investment Research
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