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The Zacks Analyst Blog Highlights: Lockheed Martin, Mastercard, Colgate, Electronic Arts and McKesson

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For Immediate Release

Chicago, IL – February 5, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Lockheed Martin (LMT - Free Report) , Mastercard (MA - Free Report) , Colgate (CL - Free Report) , Electronic Arts (EA - Free Report) and McKesson (MCK - Free Report) .

Here are highlights from Friday’s Analyst Blog:

Top Stock Reports for Lockheed Martin, Mastercard and Colgate

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 Lockheed Martin, Mastercard and Colgate. These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

Strong Buy-rated Lockheed Martin’s shares have gained +40.4% over the last one year, underperforming the Zacks Aerospace Defense sector, which has gained +60.8% over the same period. However, Lockheed Martin ended 2017 on a solid note. Its fourth-quarter earnings as well as revenue figures comfortably exceeded expectations.

The recent tax reform adopted by the U.S. government had an adverse impact on the company’s year-over-year earnings growth, while revenues reflected an uptick. The Zacks analyst emphasizes that being the largest defense contractor in the world, Lockheed Martin experiences strong demand for high-end military equipment in both domestic as well as overseas markets.

Strong order growth has been a primary growth driver for this company. The latest $7-billion deal for the sustainment of F-22 air vehicle is one such order. Lockheed Martin continues to be a strong cash generator, helping it to take important cash deployment decisions. However, the F-35 program, despite being a prime defense project for the U.S. government, has been facing criticism for being overtly expensive, for past few years.

Shares of Mastercard have gained +62.3% over the past one year, outperforming the Zacks Financial Transaction Services industry which has gained +43.3% over the same period. Mastercard’s fourth-quarter earnings beat expectations, driven by higher switched transactions, increase in cross-border volume and gross dollar volume as well as gains from acquisitions. An increase in rebates and incentives from the prior-year quarter was a partial dampener.

The Zacks analyst likes Mastercard’s solid market position, ongoing expansion and digital initiatives. Further, there are significant opportunities from the secular shift toward electronic payments. The acquisitions of VocaLink and NuData Security complement the company’s efforts to participate in new payment flows and enhance its safety and security offerings. However, it continues to face increasing costs. Also, higher incentives and rewards will put pressure on the bottom line.

Colgate’s shares are up +11.2% over the last one year, outperforming the Zacks Consumer Staples sector, which has gained +10.5% over the same period. The Zacks analyst likes the progress on the Global Growth and Efficiency Program along with additional savings anticipated from the recent expansion of the program.

Moreover, the company has been infamous with investors for its meet or beat earnings track record. Notably, it delivered in-line earnings for the third consecutive quarter in fourth-quarter 2017. However, margins continue to be strained due to higher raw material and packaging costs, as well as advertising expenses. It anticipates advertising costs to remain high in 2018, which should hurt operating margin.

Colgate expects the backdrop to remain challenging in 2018 due to uncertain global markets and slowing category growth worldwide. Nonetheless, it remains confident of the brand building and productivity maximization initiatives, which are likely to boost results.

Other noteworthy reports we are featuring today include Electronic Arts and McKesson.

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