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Research Daily

Mark Vickery

Monday's Top Research Reports: DIS, VZ, CVX & More

CVX PNC VZ TJX DIS AVGO

Trades from $3

Monday, February 27 2017

Today's Research Daily features new research reports on 16 major stocks, including Disney (DIS), Verizon (VZ) and Chevron (CVX).

Disney's shares have outperformed the Zacks Media Conglomerates sector over the past three months, gaining 11.4% vs. 9.3%, driven by the blockbuster performance of its movies. The company reported better-than-expected earnings in first-quarter fiscal 2017 but revenues missed expectations for the second straight quarter.

The Zacks analyst likes Disney's movie business and the parks & resorts division. But over the last few quarters, Disney has been weighed down by concerns about ESPN whose future growth has been clouded by the evolving media landscape as a result of 'cord cutting' and the steady migration of subscribers to online and digital platforms. Identical to performances in the past few quarters, ESPN has disappointed in the first quarter again. (You can read the full research report on Disney here.)

Verizon shares have been laggards over the past year- the stock is down -0.3% over the past 12 months vs. AT&T's +14.6% gain and the +21.6% gain for the S&P 500 index.  Verizon has revised its deal to acquire Yahoo’s core assets at a discount of $350 million for $4.48 billion. Verizon is set to begin 5G user trails in 11 markets in the first half of 2017. The LQD WiFi LLC buyout and ‘IoT Fast Track’ services boosts Verizon’s IoT prospects.

FCC approval for the XO Comm. buyout, license to install FiOS in Boston along with small cell densification and expansion of dark fiber hint at Verizon’s steps in the fiber space. But it will likely take a while before these actions bear fruit. In the updated research report issued today, the Zacks analyst discusses the pros & cons of investing in Verizon shares at this stage. (You can read the full research report on Verizon here.)

Shares of Chevron have gained +31.9% over the last one year, handily outperforming the Zacks Oil & Gas-International Integrated industry, which rose just +13.8% over the same time period, as well as larger rival Exxon Mobil. Adding to the bullish sentiment, the No. 2 energy company in the U.S. swung to a Q4 profit from a year-ago loss. Rebounding oil and gas prices, together with lower operating expenses helped Chevron report a quarterly profit.

Importantly, despite being free-cash-flow negative, the deficit has narrowed considerably and Chevron is hoping to be cash flow neutral this year. Anticipated production growth from its extensive footprint in the Permian Basin is another positive. Still, the Zacks analyst thinks there is limited upside potential for shares as weak downstream operations will hamper CVX’s near-term results. (You can read the full research report on Chevron here.)

Other noteworthy reports we are featuring today include Broadcom (AVGO), TJX Companies (TJX) and PNC Financial (PNC).

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

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