Today's Must Read
Visa Europe Buy Aids Visa (V), High Client Incentives Hurt
Nike's (NKE) Triple-Double Plan to Enhance Buyer Experience
Thursday, July 27, 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 AT&T (T), Visa (V) and Nike (NKE).These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Operators in the U.S. wireless industry have been suffering lately and AT&T is no different, even though it has done a tad bit better. The stock is down – 10.6% in the year-to-date period vs. -11% drop for the Zacks U.S. Wireless industry and -16.9% drop for Verizon (VZ). The saturated wireless market, losses in access lines, operating expenses, regulatory norms and union issues are acting as major headwinds.
AT&T posted strong second-quarter 2017 financial results, with 38.8 million video subscribers and 15.7 million broadband connections. On the diversification front, AT&T's Time Warner deal is being discussed by U.S. antitrust officials. The company's attractive dividend, currently yielding 5.2% appears safe, but these are nevertheless uncertain times in the wireless industry.
Visa’s shares have outperformed the Zacks Financial Transaction Services industry as well as MasterCard in the year-to-date period (Visa is up +29.2% vs. +26.8% gain for MA and +23.7% for the industry). Driving this momentum is the acknowledgement that Visa's brand, global network, and leading market share position it to be a key beneficiary of the secular global shift to electronic transactions.
Initial concerns about a changing competitive landscape, large on account of new payment options, have also started receding. Visa’s third-quarter fiscal 2017 earnings exceeded expectations and increased year-over-year. Results reflected solid payment volume growth, a double-digit increase in cross-border revenue and healthy operating metrics from every region. On the flip side, forex volatility, increased client incentives and global economic uncertainty are some of the headwinds.
Nike’s shares have outperformed the Zacks Consumer Discretionary sector in the last six months, gaining +10.4% vs. +8.1%. Shares of the footwear and apparel maker have been driven by a splendid surprise history, alongside focus on its “triple-double” and Consumer Direct Offense strategies. The company delivered its 20th straight earnings beat in fourth-quarter fiscal 2017. While the company also managed to report solid sales, its key North American market continues to suffer due to lackluster product assortments, increased promotions and intensified competition.
Additionally, growth of ecommerce has weighed on its wholesale business in the region. The Zacks analyst thinks the promotional environment will continue to hurt the segment’s sales. Further, the company provided a soft outlook for fiscal 2018 taking into account the operating environment, strategic changes and the foreign currency headwinds. First quarter estimates have witnessed a downtrend in the last 30 days.
Other noteworthy reports we are featuring today include DuPont (DD), Anthem (ANTM) and State Street (STT).
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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>>>