Top Stock Reports For Visa, JPMorgan & Bank Of America
Zacks Investment Research | Feb 21, 2020 04:58AM ET
Friday, February 21, 2020
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), JPMorgan Chase (JPM) and Bank of America (BAC). 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 over the past year (+45% vs. +43.2%). The Zacks analyst believes that shift in payments to new methods, such as mobile, cards, online and via wearables bodes well for the long haul. The acquisition of Visa Europe is a long-term growth strategy for the company.
Visa’s earnings of $1.46 per share matched the Zacks Consensus Estimate and were up 7.7% year over year. Results were driven by growth in payments volume, cross-border volume and processed transactions.
Numerous acquisitions and alliances plus technology upgrades and effective marketing paved the way for long-term growth and consistently increased revenues. However, high client incentives and expenses weigh on the operating margin. Also, adverse foreign exchange volatility imparts instability to the company’s earnings.
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Shares of JPMorgan have gained +26.5% in the past six months against the Zacks Major Regional Banks’ rise of +20.4%. The Zacks analyst believes that decent loan demand, improving economy, the acquisition of InstaMed, new branch openings and focus on credit card business will continue to aid financials.
The bank has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. Improvement in non-interest income and lower provisions supported fourth-quarter 2019 results, while decline in net interest income was an undermining factor.
While the Fed’s accommodative policy, challenges in expanding mortgage operations and the company’s significant dependence on capital markets revenues make us apprehensive about top-line growth to some extent, enhanced capital deployment plan reflects strong balance sheet position and will enhance shareholder value.
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Bank of America’s shares have gained +5% over the past three months against the Zacks Major Regional Banks’ rise of +0.3%. The Zacks analyst believes that opening branches in new regions, improved digital offerings, decent loan demand and efforts to control costs will aid profitability despite lower interest rates.
Bank of America has an impressive earnings surprise history, having outpaced the Zacks Consensus Estimate in each of the trailing four quarters. Improved capital markets performance and decent loan growth aided fourth-quarter 2019 results.
Efforts to focus more on consumer banking business have started bearing fruit. The company's enhanced capital deployment actions reflect a solid liquidity position. However, significant dependence on capital markets performance makes us apprehensive, given its cyclical nature. This is likely to hurt the company’s fee income growth, and in turn negatively affect the top line.
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Other noteworthy reports we are featuring today include Citigroup (C), AstraZeneca (AZN) and Duke Energy (DUK).
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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
Per Zacks analyst, Citigroup is working hard on streamlining activities and is focused on cost management.
The Zacks analyst says that AstraZeneca's cancer drugs, Lynparza, Tagrisso and Imfinzi, should drive revenues in 2020 amid rising competitive/pricing pressures on diabetes/respiratory drugs.
Per the Zacks Analyst, the company's robust five-year capital plan will drive earnings base growth.
Strength in credit card and online-banking operations, solid loan growth and inorganic expansion efforts will support Capital One.
Per the Zacks analyst, Analog Devices is benefiting from strengthening momentum of Battery Management System solutions in electric vehicles despite softness in automotive end market.
Per the Zacks analyst, business streamlining by selling low returning business, and focusing on high growth businesses are driving revenues; cost control measures are aiding underwriting margins.
DexCom has been gaining consistently from the Sensor and Transmitter segments. The Zacks Analyst is however apprehensive about the Receiver Sales which were soft lately.
Per Zacks analyst, Citigroup is working hard on streamlining activities and is focused on cost management.
The Zacks analyst says that AstraZeneca's cancer drugs, Lynparza, Tagrisso and Imfinzi, should drive revenues in 2020 amid rising competitive/pricing pressures on diabetes/respiratory drugs.
Per the Zacks Analyst, the company's robust five-year capital plan will drive earnings base growth.
Strength in credit card and online-banking operations, solid loan growth and inorganic expansion efforts will support Capital One.
Per the Zacks analyst, Analog Devices is benefiting from strengthening momentum of Battery Management System solutions in electric vehicles despite softness in automotive end market.
Per the Zacks analyst, business streamlining by selling low returning business, and focusing on high growth businesses are driving revenues; cost control measures are aiding underwriting margins.
DexCom has been gaining consistently from the Sensor and Transmitter segments. The Zacks Analyst is however apprehensive about the Receiver Sales which were soft lately.
New Upgrades/h6
The Zacks analyst is bullish about BP's strong portfolio of upstream projects which has been backing impressive production growth.
Per the Zacks analysts, strong Barbie sales along with efforts like product innovation, marketing and digitization coupled with structural simplification and capital light programs bode well.
Per the Zacks analyst, a series of buyouts have helped it boost its portfolio, leading to significant growth. Moreover, its reducing expenses on the back of its solid business rejig also contributes.
The Zacks analyst is bullish about BP's strong portfolio of upstream projects which has been backing impressive production growth.
Per the Zacks analysts, strong Barbie sales along with efforts like product innovation, marketing and digitization coupled with structural simplification and capital light programs bode well.
Per the Zacks analyst, a series of buyouts have helped it boost its portfolio, leading to significant growth. Moreover, its reducing expenses on the back of its solid business rejig also contributes.
New Downgrades/h6
Per the Zacks analyst, Kraft Heinz has been seeing high supply-chain costs in Rest of World unit. Management expects 2020 EBITDA to be hurt by inflated supply chain costs in Canada and Rest of World.
Per the Zacks analyst, IPG Photonics' significant exposure to the materials processing markets, dependency on few customers and substantial China exposure amid coronavirus crisis are key negatives.
Per the Zacks Analyst, extended tariff on aluminum import leads to high input costs that poses concern for Hexcel's growth. It also faces intense competition from both existing and new competitors.
Per the Zacks analyst, Kraft Heinz has been seeing high supply-chain costs in Rest of World unit. Management expects 2020 EBITDA to be hurt by inflated supply chain costs in Canada and Rest of World.
Per the Zacks analyst, IPG Photonics' significant exposure to the materials processing markets, dependency on few customers and substantial China exposure amid coronavirus crisis are key negatives.
Per the Zacks Analyst, extended tariff on aluminum import leads to high input costs that poses concern for Hexcel's growth. It also faces intense competition from both existing and new competitors.
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