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The Zacks Analyst Blog Highlights: Microsoft, Amazon, Facebook and Shell

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For Immediate Release

Chicago, IL – February 6, 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 Microsoft (MSFT - Free Report) , Amazon (AMZN - Free Report) , Facebook and Shell .

Here are highlights from Monday’s Analyst Blog:

Top Research Reports for Microsoft, Amazon, Facebook and Shell

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 17 major stocks, including Microsoft, Amazon, Facebook and Shell. These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

Buy-rated Microsoft’s shares have outperformed the Zacks Technology sector over the last one year (up +44.2% versus +25%) Microsoft reported stellar second-quarter results. Both earnings and revenues increased year over year, due to strategic growth investments in cloud business and AI along with robust sales implementation.

The company recently unveiled Surface LTE and a new generation of Windows 10 PCs from its OEM partners. Also, Microsoft’s recent blockchain deals with Hapoalim and Accenture and its Coco framework are tailwinds. The Zacks analyst thinks rapid adoption of Azure and Office 365 will remain the key catalysts in the near future. Azure has been selected by the likes of United Technologies and Columbia Sportswear.

Additionally, collaborations with the likes of Amazon, Red Hat, Symantec, Cray and PAREXEL are positive for the company's growth prospects. Further, Microsoft’s strategic initiatives to enter the augmented reality and virtual reality market will be positives.

Shares of Amazon have outperformed the broader market in the last one year (the stock is up +77% vs. the +21.1% gain for the S&P 500 as a whole). Amazon is benefiting from strong growth in all its businesses and especially the retail business remains very hard to beat on price, choice and convenience.

Amazon has a solid loyalty system in Prime and its FBA strategy and content addition continue to add selection to Prime memberships. AWS generates much higher margins than retail, thus significantly impacting Amazon’s profitability.

Devices and IoT are also potential growth areas. However, increased operating expenses to support expansion of its business into new markets and territories, localize the availability of products and grow its content will keep margins under pressure.

Buy-rated Facebook’s shares have outperformed the S&P 500 index over the past year, gaining +44.1% vs. +21.1%. The Zacks analyst likes Facebook's efforts in mobile and live videos, which continue to pay off in a big way. Instagram remains another important revenue stream.

Apart from mobile and video, the monetization opportunities of the company’s other subsidiaries – Messenger, WhatsApp and Oculus – and a huge user base/higher engagement levels are expected to drive growth going ahead. Facebook is also dabbling in AR/VR and AI technologies, which bodes well for long-term growth.

However, the recent uproar caused by apparent use of the platform by Russian elements for interfering in the presidential elections has put Facebook in a spot. As a result, Facebook CEO has said that it will make sizable investments to tighten security on the platform, which, along with continued investments in video, AR/VR and AI, will dent operating margins going forward.

Shares of Buy-rated Shell have outperformed the Zacks Integrated Oil industry over the last year (+24% vs. +11.6%). The performance was supported by the company’s impressive earnings surprise history, having surpassed expectations in three of the trailing four quarters.

Shell ended 2017 on a solid note with the integrated behemoth's fourth-quarter upstream unit profit soaring from the year-ago period thanks to steady commodity price recovery. The Hague-based supermajor was also able to reduce operating costs on increased synergies with BG Group, apart from progressing on its large divestment program.

Importantly, the Anglo-Dutch company generated healthy cash flows yet again, allowing it to cut debt and cover its cash dividend.  Consequently, the Zacks analyst thinks Shell offers substantial upside potential from the current price levels and views it as a preferred energy play to own now.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performancefor information about the performance numbers displayed in this press release.


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