Top Stock Reports: Mastercard, Verizon, Coca-Cola & More
Zacks Investment Research | Aug 04, 2019 11:36PM ET
Monday, August 5, 2019
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features updated research reports on 16 major stocks, including Mastercard (MA), Verizon (VZ) and Coca-Cola (KO). These reports have been hand-picked from roughly 70 reports published by our analyst team today.
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Mastercard’s shares have increased +33.7% in the past year, outperforming the Zacks Financial Transaction Services industry’s rally of +24%. Mastercard’s earnings beat expectations and increased year over year. Better-than-expected results were primarily backed by higher switched transactions, increase in cross-border volumes and gross dollar volumes, and gains from acquisitions. Such gains were partly offset by an increase in rebates and incentives compared to the year-ago quarter. The Zacks analyst thinks the company is poised for growth, given its solid market position, ongoing expansion, digital initiatives and opportunities from the shift toward electronic payments. However, escalating costs will put pressure on margins. Also, in order to gain new customers and business, Mastercard has been incurring high level of costs.
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Shares of Verizon have gained +6% in the past year, outperforming the Zacks Wireless National industry’s increase of +5.4% during the same period. Driven by healthy traction in the wireless business, Verizon reported solid second-quarter 2019 results. The telecom giant has embarked on a new operating structure with Verizon 2.0 that aims to align the business model with evolving customer needs. The Zacks analyst thinks the company’s focus on online content delivery, mobile video and online advertising will likely drive future growth. Furthermore, the company has upped the ante against its rivals by launching 5G Ultra Wideband network in select locations of the country and remains well poised to benefit from the 5G boom. However, it continues to struggle in a competitive U.S. wireless market. The company's wireline division is struggling with losses in access lines due to competitive pressure from VoIP service providers. Verizon is spending heavily on promotion and lucrative discounts to woo customers, which will contract margins.
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Coca-Cola’s shares have increased +12.2% in the past year versus the Zacks Soft Drinks Beverages industry's -1.7% decline. The Zacks analyst thinks this is largely attributable to the effective execution of strategies to evolve as a consumer-centric total beverage company. This has bolstered its quarterly performances as is evident from a robust surprise trend. Second-quarter 2019 marked the company’s eighth positive earnings surprise in the last nine quarters and eighth straight sales beat as well. The Zacks analyst thinks ongoing productivity efforts and disciplined growth strategies as well as robust performance across segments are aiding its top and bottom lines. Innovation and investment in core categories and brands have been the key focus area, which has led to the expansion of retail value share. Its global re-franchising initiatives are expected to boost margins. However, it expects adverse currency rates to significantly mar comparable revenues and operating income in the third quarter and the rest of 2019.
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Other noteworthy reports we have featured today include PNC Financial (PNC), S&P Global (NYSE:SPGI) and Merck (MRK).
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Featured Reports/h6
The Zacks analyst believes Keytruda has strong growth prospects based on increased utilization, recent approvals for new indications and potential additional approvals worldwide.
The Zacks analyst likes S&P Global's strategy of inorganic growth. However, operation in a highly competitive market for credit rating, research, investment and advisory services is a concern.
Per the Zacks analyst, execution of strategic initiatives and attractive business profile helps PNC improve its topline. However, rising costs due to investment in technology remains a headwind.
Per the Zacks analyst, Progressive is poised for growth given solid policies in force, strong retention ratio and compelling product portfolio, However, exposure to cat loss ails.
Per the Zacks analyst, record Model 3 sedan delivery is aiding Tesla overcome waning sales of Model S.
Per the Zacks analyst, Cognizant is benefiting from domain expertise as well as its ability to harness the ongoing digital transition.
Per the Zacks analyst, Motorola aims to augment its position in the public safety domain through a holistic growth model and diligent execution of operational plans.
The Zacks analyst believes Keytruda has strong growth prospects based on increased utilization, recent approvals for new indications and potential additional approvals worldwide.
The Zacks analyst likes S&P Global's strategy of inorganic growth. However, operation in a highly competitive market for credit rating, research, investment and advisory services is a concern.
Per the Zacks analyst, execution of strategic initiatives and attractive business profile helps PNC improve its topline. However, rising costs due to investment in technology remains a headwind.
Per the Zacks analyst, Progressive is poised for growth given solid policies in force, strong retention ratio and compelling product portfolio, However, exposure to cat loss ails.
Per the Zacks analyst, record Model 3 sedan delivery is aiding Tesla overcome waning sales of Model S.
Per the Zacks analyst, Cognizant is benefiting from domain expertise as well as its ability to harness the ongoing digital transition.
Per the Zacks analyst, Motorola aims to augment its position in the public safety domain through a holistic growth model and diligent execution of operational plans.
New Upgrades/h6
Per the Zacks analyst, Booz Allen is seeing backlog growth, a shift in talent to more technical expertise and strong performance in the global commercial market through implementation of Vision 2020.
Per the Zacks analyst, Theravance's COPD drug, Yupelri is witnessing strong launch uptake. Moreover, its pipeline programs look promising as they target highly competitive therapeutic areas.
The Zacks analyst is impressed by the surge in the carrier's passenger revenues on the back of strong air travel demand. Additionally, the airline's focus on capacity discipline is encouraging.
Per the Zacks analyst, Booz Allen is seeing backlog growth, a shift in talent to more technical expertise and strong performance in the global commercial market through implementation of Vision 2020.
Per the Zacks analyst, Theravance's COPD drug, Yupelri is witnessing strong launch uptake. Moreover, its pipeline programs look promising as they target highly competitive therapeutic areas.
The Zacks analyst is impressed by the surge in the carrier's passenger revenues on the back of strong air travel demand. Additionally, the airline's focus on capacity discipline is encouraging.
New Downgrades/h6
Per the Zacks analyst, its escalating expenses over the past many years continue to weigh on the margins. Moreover, its long term debt, which has been increasing since 2011, also bothers.
Per the Zacks analyst, strategic investments will boost its core and non-core businesses. However, shifting of some of the manufacturing supply chain to other countries could disrupt operations.
Per the Zacks analyst, currency headwinds are likely to hurt Avon's revenues in the near term. In second-quarter 2019, currency hurt revenues by 8%, which missed estimates for third time.
Per the Zacks analyst, its escalating expenses over the past many years continue to weigh on the margins. Moreover, its long term debt, which has been increasing since 2011, also bothers.
Per the Zacks analyst, strategic investments will boost its core and non-core businesses. However, shifting of some of the manufacturing supply chain to other countries could disrupt operations.
Per the Zacks analyst, currency headwinds are likely to hurt Avon's revenues in the near term. In second-quarter 2019, currency hurt revenues by 8%, which missed estimates for third time.
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