Monday, April 3, 2017

Today's Research Daily features new research reports on 16 major stocks, including Microsoft (MSFT), Tesla (TSLA) and PNC Financial (PNC).

Microsoft shares lagged the Zacks Tech sector through the fall, but have led the way over the last six months (up +15.3% versus +8.9%) on greater appreciation for the company's reorganization and repositioning. The Zacks analyst points to the company's continuing enterprise strength, benefits from the Office 365 subscription model, strong growth prospects of Azure and promising new products. The recent announcement of Xbox Game Pass, a subscription-based gaming service, will help Microsoft to win market share from the likes of GameStop.

All in all, the company has emerged as a leader in the cloud space that promises momentum on a number of fronts. Estimates have been stable lately ahead of the company’s fiscal Q3 earnings release. However, a strong U.S. dollar and stiff competition remain major concerns. (You can read the full research report on Microsoft here.)

Shares of Tesla have been standout performers lately, with the stock up +22.6% over the past three months vs. +0.3% gain for the Zacks Automotive - Domestic industry. The company is focused on geographical expansions and acquisitions for growth. Tesla also remains on track with its Model 3 production. Tesla reported record deliveries in the first quarter of 2017.

The company continues to generate a lot of passion among investors; it has an avid fan base, but also plenty of detractors. The detractors simply don't see any justification for the stock's lofty valuation given the niche nature of the product and the well-known operational and strategic headwinds facing the company. (You can read the full research report on Tesla here.)

PNC Financial outperformed the Zacks Regional Banks industry, over the last six months gaining +32.9% vs. +30.2%. The Zacks analyst likes the company’s efforts to generate positive operating leverage through its cost-saving initiatives. Also, management projects revenues to rise at a mid-single digit rate in 2017, aided by loan growth. Further, its deal to acquire the commercial and vendor finance business of ECN Capital is expected to be marginally accretive to earnings in 2017.

Further, given its strong balance sheet, the company’s capital deployment activities are impressive. Though the company increased its prime lending rate to 4.00% following the latest Fed rate hike, margin pressure is not expected to ease drastically in the upcoming quarters. Also, stringent regulatory requirements will likely hurt the company’s profitability and business flexibility in the near term. (You can read the full research report on PNC Financial here.)

Other noteworthy reports we are featuring today include Caterpillar (CAT), Praxair (PX) and NextEra Energy (NEE).

More Stock News: 8 Companies Verge on Apple-Like Run
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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 >>>