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Research Daily

Monday May 15, 2017

Today's Research Daily features new research reports on 16 major stocks, including Apple (AAPL), Wells Fargo (WFC) and Procter & Gamble (PG). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today. You can see all of today’s research reports here >>>

On A Jet Plane: Global Week Ahead discusses the main issues and economic reports on deck for release this week.

Retail Sector’s Disappointing Earnings Results  takes stock of the sector’s sub-par quarterly results and what’s ahead for the space. This weekly report also provides the Q1 earnings season scorecard.

Apple shares are up +34.3% in the year-to-date period, handily outperforming the S&P 500 (up +7%) and the Zacks Technology sector (up +14.2%), with each of the last two earnings releases adding to the stock’s momentum. “Services” revenues, which includes the App store, Apple Music and Apple Pay grew +18%, with App store sales growing +40% year over year, in the March quarter. Also, the company announced an increase in the share repurchase authorization by $50 billion, taking total authorization to $300 million. Apple raised its quarterly dividend by 10.5%. Plus, the buzz surrounding iPhone 8, which is already labeled a super cycle, is expected to allay investors fear about iPhone sales trajectory. However, macroeconomic headwinds in some key regions like China and increasing competition remain concerns. (You can read the full research report on Apple here >>)

Wells Fargo shares continue to struggle, reflecting lingering issues pertaining to the customer accounts issue. The stock is down -3.4% in the year-to-date period, underperforming the Zacks Major Banks industry, which is up +1% in the same time period. Wells Fargo lacks investment banking and capital markets assets that were a big source of strength for many of its peers in the first quarter of the year. But the bigger issue for the bank has been the customer accounts issue. Troubles have intensified following the bank’s $190-million settlement last year to resolve regulators’ claims of illegally opening millions of illegal accounts. Recently, the Board of Directors released the findings of the independent investigation into the company’s retail banking sales practices which resulted in compensation actions, among the largest in corporate history. While the current crisis at the company will take some time to alleviate, the Zacks analyst thinks continued growth in loans and deposits, coupled with cost cuts (the bank plans $4 billion in cost cuts by 2019) should help support results. (You can read the full research report on Wells Fargo here >>)

Procter & Gamble outperformed the Zacks Consumer Staples sector in the past year (+5.5% vs. +2.9%). However, P&G shares have underperformed the S&P 500 index in the year-to-date period (up +2.5% vs. +7.1%). P&G’s fiscal third-quarter earnings beat expectations while revenues missed estimates. Organic sales growth declined in the last quarter reflecting weak market growth. The company has been struggling to boost market growth for the last few quarters. Also, significant negative forex impact has been hurting sales. But the Zacks analyst likes the fact that P&G is speeding up innovations and investments to counter softening industry growth. Its productivity improvements and aggressive cost-saving efforts are also consistently helping to boost profit levels. (You can read the full research report on Procter & Gamble here >>)

Other noteworthy reports we are featuring today include Celgene (CELG), Goldman Sachs (GS) and General Motors (GM).

Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.

One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>

Sheraz Mian

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 >>>

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