Top Stock Reports For McDonald's, 3M & Stryker
Zacks Investment Research | Jul 26, 2017 06:07AM ET
Wednesday July 26 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 McDonald’s (MCD), 3M (MMM) and Stryker (SYK). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see
Buy rated McDonald’s’ shares have gained +28.9% over the last six months easily outperforming many of its peers which have been struggling to survive the restaurant space’s tough operating environment lately. McDonald’s Q2 earnings and revenues exceeded expectations, but revenues fell year over year mainly due to the impact of refranchising.
Meanwhile, the company recorded the eighth consecutive quarter of global comps growth. In fact, McDonald’s grew sales and guest counts in each of its top nine markets, for the first time since 2008. The Zacks analyst likes McDonald’s attempts to reinforce its position worldwide via various sales and digital initiatives.
Also, increased focus on refranchising is expected to reduce its capital requirements, thereby facilitating EPS growth and ROE expansion in the long run. Yet, higher costs along with currency headwinds may hurt profits while a soft industry backdrop in the U.S. and macroeconomic concerns in some parts of the world might limit sales growth.
(You can) .
3M’s shares are up +12.4% in the year-to-date period, outperforming the S&P 500 index (up +10.8%) and the Zacks Conglomerates sector (down -1.4%). Driven by broad-based organic growth across all segments, 3M reported strong second-quarter results with healthy year-over-year increase in earnings and revenues, although it missed expectations on both counts.
The company has raised its earlier guidance for 2017 on strong quarterly results and improved business outlook. The Zacks analyst likes 3M's global footprint, diversified product portfolio and ability to penetrate different markets. However, increased pension expenses remain a significant headwind for 3M and erode its profitability.
Sustained strength in the U.S. dollar will further continue to negatively impact earnings, as exports consume a significant part of the company’s operations and growth prospects. Given its international presence, adverse foreign currency translations are also likely to affect 3M’s ability to realize projected growth rates in its sales and earnings.
(You can ) .
Stryker’s shares have gained +18.5% over the last six months, outperforming the Zacks Medical Products industry, which has gained +17.8% over the same period. The Zacks analyst thinks Stryker's performance is likely to be affected by supply-side headwinds. The company has been grappling with issues in its spine business for long and this is expected to affect performance in the second quarter.
Get The News You Want
China might prove to be a challenging market for the company. Additionally, challenging global economic conditions and rising competition raise concerns. Estimate movement has also been mixed ahead of its second quarter earnings release. However growing adoption of MAKO will drive sales in the orthopedic and reconstructive surgery market. The acquisitions of Sage Products and Physio Control and the tie-up with Indo UK Institute of Health's Medicity Program are also major positives.
(You can ) .
Other noteworthy reports we are featuring today include Goldman Sachs (GS), Colgate-Palmolive (CL) and Kinder Morgan (NYSE:KMI) (KMI).
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure.
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
As per the Zacks analyst, legal issues leading to higher expenses remain a concern for Goldman. Further, challenging environment depicting lower trading income add to the woes.
The Zacks analyst believes Noble Energy (NYSE:NBL) is well poised to gain from its strategic acquisitions and improving returns from its global asset base.
Kinder Morgan expects to generate majority of its cash flow from stable fee-based contracts in 2017. However, high dependence on debt financing could hurt the company, per the covering analyst.
Per the Zacks analyst, Quest Diagnostics (NYSE:DGX) is gaining on new tie-ups with hospitals and integrated delivery networks. Also promising long term growth outlook based on two-point strategy buoys optimism.
Cadence expects hardware business to improve in the second-half of 2017. The Zacks analyst believes that the strong adoption of S1 FPGA product will drive this growth.
Per the Zacks analyst, the company's merchant acquiring services remains strong given growth in direct businesses and higher sales productivity.
Per the Zacks analyst Everest Re is well poised for growth banking on its global presence, product diversification and traditional risk management capabilities.
As per the Zacks analyst, legal issues leading to higher expenses remain a concern for Goldman. Further, challenging environment depicting lower trading income add to the woes.
The Zacks analyst believes Noble Energy (NYSE:NBL) is well poised to gain from its strategic acquisitions and improving returns from its global asset base.
Kinder Morgan expects to generate majority of its cash flow from stable fee-based contracts in 2017. However, high dependence on debt financing could hurt the company, per the covering analyst.
Per the Zacks analyst, Quest Diagnostics (NYSE:DGX) is gaining on new tie-ups with hospitals and integrated delivery networks. Also promising long term growth outlook based on two-point strategy buoys optimism.
Cadence expects hardware business to improve in the second-half of 2017. The Zacks analyst believes that the strong adoption of S1 FPGA product will drive this growth.
Per the Zacks analyst, the company's merchant acquiring services remains strong given growth in direct businesses and higher sales productivity.
Per the Zacks analyst Everest Re is well poised for growth banking on its global presence, product diversification and traditional risk management capabilities.
New Upgrades/h6
Per the Zacks analyst, Centene's Health Net acquisition boosted revenue growth and consequently drove the margin. Its operational efficiency that resulted in solid cash flow generation, impresses.
Per the Zacks analyst, Regions Financial's efforts to reduce expenses through consolidation of 100-150 branches are impressive. Such move is expected to improve its financials in the near-term.
Per the Zacks analyst, V.F. Corp. should continue gaining from its direct-to-consumer business that grew 14% in the second quarter. Management also raised its DTC sales view, reflecting its prospects.
Per the Zacks analyst, Centene's Health Net acquisition boosted revenue growth and consequently drove the margin. Its operational efficiency that resulted in solid cash flow generation, impresses.
Per the Zacks analyst, Regions Financial's efforts to reduce expenses through consolidation of 100-150 branches are impressive. Such move is expected to improve its financials in the near-term.
Per the Zacks analyst, V.F. Corp. should continue gaining from its direct-to-consumer business that grew 14% in the second quarter. Management also raised its DTC sales view, reflecting its prospects.
New Downgrades/h6
The Zacks analyst remain apprehensive about Skechers' bottom line performance that has been declining since the past five straight quarters due to rise in selling and general & administrative expenses
Per the Zacks analyst, deteriorating asset quality largely due to higher provisions remains a key concern for CIT Group. Also, persistent rise in personnel expenses is likely to hurt its financials.
The Zacks analysts are apprehensive about Colgate's weak organic sales trends in first-half 2017 due to softness in North America and challenges in Asia-Pacific. It cut organic sales view for 2017.
The Zacks analyst remain apprehensive about Skechers' bottom line performance that has been declining since the past five straight quarters due to rise in selling and general & administrative expenses
Per the Zacks analyst, deteriorating asset quality largely due to higher provisions remains a key concern for CIT Group. Also, persistent rise in personnel expenses is likely to hurt its financials.
The Zacks analysts are apprehensive about Colgate's weak organic sales trends in first-half 2017 due to softness in North America and challenges in Asia-Pacific. It cut organic sales view for 2017.
Zacks Investment Research
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.