Today's Must Read
Activision's (ATVI) Increasing Digital Revenues to Drive Growth
AIG (AIG) to Grow on Business Restructuring, New Leadership
Wednesday, July 5, 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 MasterCard (MA), Activision (ATVI) and AIG (AIG).These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Buy-rated MasterCard’s shares have outperformed the Zacks Financial Services Transaction sector over the last year (up +40% vs. +21.7%) and is also ahead of rival Visa (up +27%) 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. Earnings estimates for 2017 have also been revised upwards over the past 60 days.
Shares of Buy-rated Activision have been strong performers this year, with the stock up +55.9% in the year-to-date period vs. the Zacks gaming industry's +36.1% gain in that same time period. The Zacks analyst likes Activision’s enviable product portfolio and increasing digital revenues, both of which should continue to drive growth.
Moreover, the company stands to benefit further from the acquisition of King Digital. The company’s attempts to become a broad-based media company are also prudent. Apart from launching a movie studio and consumer products division, the company is strengthening its presence in the lucrative e-sports market. However, the "hit"-driven and competitive nature of the video game industry begets caution.
Buy-rated AIG’s shares have underperformed the Zacks Insurance - Multi Line industry over the last three months, losing -3.5% vs. +5.4%. AIG recently appointed its new CEO, who the Zacks analyst believes will speed up turnaround activities at the company.
The company has been taking up several measures like strategic divestitures, asset sales, increase in share buybacks, dividend hikes, personnel changes, cost control, reinsurance deals, and lowering of hedge fund investments in order to deliver better earnings result by curbing possible volatilities. Though some of these efforts have paid off to some extent several other changes are required to effect a turnaround. The company's commercial lines business has also underperformed. Regulatory uncertainty and exposure to catastrophes are other headwinds.
Other noteworthy reports we are featuring today include Eaton (ETN), Monster Beverage (MNST) and Ecolab (ECL).
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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>>>