Friday, February 10 2017

We are sharing today analyst reports on 16 major stocks in today’s Research Daily, including reports on Morgan Stanley (MS), General Motors (GM) and Prudential Financial (PRU). These reports have been hand-picked from amongst the 70 or so stock research reports published by our analyst team today. You can see all of today’s research reports here >>

In addition to these stock research reports, we are also giving you a real-time scorecard of the ongoing Q4 earnings season. You can see our latest Earnings Trends report here - Positive Earnings Picture

Q4 Earnings Scorecard (as of Friday, February 10^th)

The bulk of the Q4 earnings season is now behind us, with results from 359 S&P 500 members, or 71.7% of the index’s total membership, already out. With another 53 index members on deck to report results next week, we will have seen results from 82% of the index’s members by then. Total earnings for the 359 index members that have reported results already are up +6.1% on +4.7% higher revenues, with 68.8% beating EPS estimates and 54.6% beating revenue estimates.

This is better earnings and revenue growth performance than we have seen from this group of 359 S&P 500 members in other recent periods, even after adjusting for the strong growth from the Finance sector (earnings growth would be +4.6% excluding the Finance sector on +4.6% higher revenues).

As we have been pointing out all along since the start of this reporting cycle, not only is Q4 growth on track to be the highest in two years, but the overall level of total earnings is also on track to reach an all-time quarterly record.

Importantly, while estimates for the current period are coming down, they aren’t coming down as much as has historically been the case.

Today's Analyst Reports

Morgan Stanley shares have outperformed the Zacks Finance sector over the last six months, gaining +52.7% versus the sector’s +15.1% increase, with the company’s better than expected fourth-quarter results adding to the stock's positive momentum (Goldman Sachs shares are up +47.3% in that time period). The analyst likes the company’s efforts to offload its non-core assets to lower balance-sheet risks and shift focus toward less capital-intensive businesses. Further, the company’s expense saving initiatives by implementing significant infrastructure expense reductions by 2017 are commendable. However, equity trading income distress, new regulatory requirements and intense pricing competition are concerns though the regulatory burden is expected to come down going forward. (You can read the full research report on Morgan Stanley here >>)

General Motors shares have been strong performers over the past year (the stock is up +30.8% vs. +28.1% for the Zacks Auto sector & +11.8% for Ford), though they have struggled lately despite strong quarterly results. The analyst likes the stock and points to its record of positive earnings surprises in recent quarters and improved outlook in emerging markets on the back of increasing capacity investments in those markets. It is also focused on investment in innovative technologies and vehicles for sustained growth. However, series of recalls, scaling down or shutting manufacturing operations in some regions and challenging South American market are headwinds for the company. (You can read the full research report on General Motors here >>)

Prudential shares have gained +4.2% in the year-to-date period, outperforming the Zacks Multiline Insurance industry, which has gained +1.1%% over the same period. Prudential’s fourth-quarter earnings beat expectations and also improved year over year on the back of higher revenues, investment income and lower expenses. The analyst likes its high performing asset management business, widespread international operations and deeper reach in the pension risk transfer market. It has also been growing its pension risk transfer business. Expanded international presence, mainly in Japan, Korea and China, provides it with better organic growth opportunities than peers. A strong balance sheet and efficient capital management are other tailwinds. (You can read the full research report on Prudential here >>)

Other noteworthy reports we are featuring today include Exelon (EXC), Cardinal Health (CAH) and Sanofi (SNY).

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Sheraz Mian

Director of Research

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 Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here >>>