Today's Must Read
JPMorgan's (JPM) Weak Trading Income to Hurt Q2 Revenue Growth
Intel Corp (INTC) Hurt By Increasing ARM-based Competition
MasterCard (MA) Grows on Pacts, Digitalization
Monday June 5 2017
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 ExxonMobil (XOM), JPMorgan (JPM), Intel (INTC) and MasterCard (MA).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 >>>
ExxonMobil’s shares tracked the S&P 500 index through year-end 2016, but have lagged the broader index as well as the peer super majors group in the year-to-date period, likely reflecting the company's perceived defensiveness that disadvantages it relative to its 'oilier' peers. Exxon's resilient integrated business model has long been the industry gold standard, which makes it an attractive and relatively low-risk Energy sector option for many investors. A fortress balance sheet, an attractive and totally safe dividend and a history of returning excess cash to shareholders are some of the other positives in the Exxon story.
The company has been investing heavily in its chemical and refining businesses, which will likely help it counter downturns in upstream businesses owing to volatile commodity prices. However, the integrated player’s oil and gas output is well below the production levels 10 years ago. The Zacks analyst discusses the pros and cons of investing in Exxon shares in the updated research report issued today. (You can read the full research report on ExxonMobil here >>>).
Shares of JPMorgan have lost -1.0% over the past six months vs. a -0.8% decline for the Major Banks industry. The Zacks analyst likes the company’s steady capital deployment activities (dividend hike and share buyback), which reflects its strong balance sheet position.
The company remains well positioned to benefit from the improved rate scenario and rising loan demand. Synergies from retail banking performance and cost-containment efforts will help improving its profitability, going forward. However, a persistent fee income growth challenge remains a major headwind. Also, litigation hassles remain a concern. (You can read the full research report on JPMorgan here >>>).
Intel’s shares have gained only +4.9% since election results were announced on Nov 8, lagging the broader Tech sector (up +18.1%) as well as the red-hot semiconductors space (up +28.4%). Top-PC makers like HP, Lenovo, and Asus are set to launch PCs based on Qualcomm’s ARM-based Snapdragon processor, which intensifies competition for Intel. Additionally, increasing competition from AMD is also a headwind. Moreover, PC shipments are expected to remain sluggish due to increasing DRAM and NAND prices, which will hurt Intel’s top-line growth going ahead in 2017.
Nevertheless, the Zacks analyst thinks IBM’s upcoming launch of Skylake will drive data center results in the second half. Moreover, the company revised its 2017 revenue and EPS outlook upward based on improving average selling price (ASP). Further, anticipated improvement in cost structure and lower spending, primarily due to improving operational efficiency will aid in expansion of margins going forward. Additionally, aggressive share buyback will boost the bottom line in 2017. (You can read the full research report on Intel here >>>).
Shares of MasterCard have outperformed the Zacks Financial Services Transaction sector over the last one year (up +29.8% vs. +18.4%) and is also ahead of rival Visa (up +19.5%) The company remains well positioned for growth on the back of its solid market position, ongoing expansion and digital initiatives and significant opportunities from the secular shift towards electronic payments.
The acquisition of VocaLink and NuData Security complement the company’s efforts to participate in new payment flows and enhance its safety and security offerings. However, escalating costs, a challenging forex environment and legal issues remain concerns. (You can read the full research report on MasterCard here >>>).
Other noteworthy reports we are featuring today include Broadcom (AVGO), Starbucks (SBUX) and CVS Health (CVS).
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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>>>