Today's Must Read
Disney+ Drives Disney (DIS) Amid Coronavirus-Led Disruption
Digitization, New Branches Aid BofA (BAC) amid Lower Rates
Tuesday, September 22, 2020
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 Mastercard (MA), Disney (DIS) and Bank of America (BAC). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Mastercard shares have outperformed the Zacks Financial Transaction Services industry in the year to date period (+9.8% vs. +1.7%). The Zacks analyst believes that Mastercard’s strategic acquisitions, alliances and technology upgrades, along with product-diversification and geographic-expansion initiatives augur well for the long term.
It is gaining from an increased demand for digital and contactless solutions owing to the COVID crisis. Investment in technology keeps it at the forefront of the rapidly-evolving payments industry. It is also witnessing buoyant demand for its Data & Analytics and Cyber solutions.
Mastercard’s solid capital position enables investment in business and returning value to shareholders. However, escalating costs might put pressure on the company’s margins. It also cancelled its annual 2020 outlook for net revenues and operating expense due to coronavirus-induced business loss.
Shares of Disney have lost -5.3% over the past year against the Zacks Media Conglomerates industry’s fall of -7.2%. The Zacks analyst believes that Disney has been benefiting from the growing popularity of Disney+, owing to a strong content portfolio and a cheaper bundle offering despite stiff competition.
The availability of Mulan on Disney+ is expected to boost app downloads. Moreover, upcoming launches in the Nordics, Belgium, Luxembourg, Portugal and Latin America are expected to rapidly expand Disney+’s subscriber base. However, Disney’s businesses continue to be affected by the coronavirus pandemic.
Shanghai Disney Resort re-opened in May and Hong Kong Disneyland Resort, despite reopening in late June, was closed again in July. The pandemic affected Disney’s third-quarter segmental operating income by $3.5 billion. Moreover, a leveraged balance sheet is a significant headwind.
Bank of America’s shares have gained +35.3% over the past six months against the Zacks Major Regional Banks industry’s rise of +23.7%. The Zacks analyst believes that opening of new branches, steady improvement in digital offerings and efforts to manage expenses will likely aid profitability.
A strong balance sheet and liquidity position are expected to continue supporting the company's financials amid economic slowdown. However, near-zero interest rates and no near-term chance of any change in the same are expected to hurt the bank’s margins and interest income.
Also, coronavirus-induced concerns will likely continue to hamper business activities. Thus, loan growth is expected to be muted. Further, dependence on capital markets performance is another concern, given its cyclical nature.
Other noteworthy reports we are featuring today include Johnson & Johnson (JNJ), Coca-Cola (KO) and Cisco Systems (CSCO).
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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>>>