Today's Must Read
St Jude Synergy, New Products Boost Abbott (ABT)
Passenger Revenue Growth Buoys Delta (DAL) Amid High Costs
Wednesday June 14 2017
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 United Technologies (UTX), Abbott (ABT), and Delta Air (DAL).These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Buy rated United Technologies shares have outperformed the Zacks Conglomerates sector as well as the S&P 500 index in the year-to-date period (the stock is up +9.5% vs. +3.1% gain for the sector) on the back of a revamped aerospace unit and improved growth outlook through strategic acquisition opportunities. While questions remain about the new administration's ability to ramp up defense spending, this favorable expectation is nevertheless a positive for the company. The improving outlook for the global economy is another macro tailwind for UTX. The company remains in excellent financial health and pays a stable dividend (currently yielding 2.2%), but value-oriented investors will likely have issues with the stock's current elevated valuation.
Abbott shares have outperformed the Zacks Medical sector in the year-to-date period (the stock is up +24.2% vs. +17.9% gain for the sector) on the back of greater appreciation for the company's strategic repositioning through acquisitions/divestitures. A case in point is the St. Jude Medical buyout that complements the company cardiovascular devices business. All in all, market participants like management's strategic focus on core therapeutic areas. On the flip side, the analyst identifies weakness in the nutrition business in China and sluggish growth in the Venezuelan market as areas of concern.
Delta Air Lines shares rallied +10.4% over the last three months, handily outperforming the Zacks Airline industry's +6.4% gain. However, the stock has underperformed fellow airline heavyweight, American Airlines, which have gained +17.4% in the same time frame. Delta, however, received encouraging news recently on the passenger unit revenue front. The metric registered 3.5% year over year growth in May. The company's decision to hike quarterly dividend is also reassuring. Moreover, the Zacks analyst likes Delta’s employee-friendly approach as well as expansion and debt-reduction efforts. However, increasing costs are likely to once again hurt bottom-line growth in the second quarter of 2017.
Other noteworthy reports we are featuring today include Equity Residential (EQR), Ross Stores (ROST) and Concho Resources (CXO).
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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>>>