Today's Must Read
NVIDIA (NVDA) Rides on Multiple AI Projects and Partnerships
FMS Aids Raytheon (RTN), Reliance on Fixed-Price Deals Hurt
Monday, August 14, 2017
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including United Technologies (UTX), NVIDIA (NVDA) and Raytheon (RTN). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
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 +6.6% vs. -2.2% declined for the sector) on the back of a revamped aerospace unit and improved growth outlook through strategic acquisition opportunities. United Technologies reported healthy second quarter results, surpassing earnings expectations. Management also raised its guidance for 2017 on favorable growth dynamics.
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 2.3%).
Shares of Strong Buy-rated NVIDIA have surged over the last year, gaining in excess of +147% versus the Zacks General Semiconductors industry’s +28.4% gain. NVIDIA posted impressive second-quarter fiscal 2018 results and provided encouraging third quarter revenue guidance.
The Zacks analyst likes NVIDIA’s sustained efforts toward attaining robust position in several emerging domains such as Artificial Intelligence (AI), deep learning and driverless cars. NVIDIA’s innovative product pipeline and strength in gaming and high-end notebook GPUs remain positives. The company’s focus on GRID platforms can increase GPU adoption in data centers, giving it an advantage against its competitors.
Raytheon shares have risen around +26.3% year-to-date, outperforming the Zacks Defense Equipment industry, which has increased +19.8% over the same period. Raytheon’s second-quarter earnings and revenues have surpassed expectations, on the back of improved year-over-year performance. However, the company’s declining backlogs is a worry. Nevertheless, buoyed by better-than-expected results and expectations to carry on such performance in the days ahead, Raytheon raised its 2017 outlook.
The Zacks analyst stresses that the company is one of the best-positioned large-cap defense players due to its non-platform-centric focus. On the flip side, factors like tough competition, budget deficits and political uncertainty continue to be major headwinds for Raytheon. Moreover, a comparative analysis of the company’s historical EV/EBITDA ratio reflects a relatively gloomy picture that might be a cause for investors’ concern.
Other noteworthy reports we are featuring today include Ventas (VTR), Simon Property (SPG) and Energy Transfer Partners (ETP).
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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>>>