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Research Daily

Wednesday, August 16, 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 Home Depot (HD), U.S. Bancorp (USB) and Alibaba (BABA).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 >>>

Home Depot's shares are up +10.3% over the last one year, matching the Zacks Retail sector (also up +10.3%) and marginally behind the broader market (S&P 500 up +12.7%) in that same time period. The company has been consistently gaining from its interconnected strategy, focus on Pro customers, and housing market recovery. These factors helped the company post a stellar second-quarter fiscal 2017 performance, which marked its highest ever quarterly sales and earnings.

Pro category sales continued to outperform, driven by constant efforts to enrich customers’ experiences. The sturdy first half performance and expectations of improved home prices encouraged the company to raise its fiscal 2017 view. However, gross margin remains plateaued, and is likely to fall 10 bps in fiscal 2017. Also, competition from online retailers may impact results.

(You can read the full research report on Home Depot here >>>).

Shares of U.S. Bancorp have underperformed the Zacks categorized Major Regional Banks industry over the last one year, gaining +22.6% vs. +34.2%. The company’s second-quarter 2017 earnings outpaced the Zacks Consensus Estimate. High interest income was recorded on rising rates. Increased average loans and deposits balances reflect organic growth.

But the Zacks analyst thinks the company’s prospects will likely get support from its solid business model, core franchise and diverse revenue streams. Additionally, the approval of Financial Choice Act is anticipated to support U.S. Bancorp’s profitability moving ahead. Notably, the bank received the Fed's approval for its 2017 capital plan. However, escalating expenses and litigations remain key concerns.

(You can read the full research report on U.S. Bancorp here >>>).

Alibaba's shares have outperformed the broader market as well as the peer e-commerce space over the last year (it is up more than +62.7%), with the trend expected to remain in place given continued growth in its core e-commerce business and growing cloud computing services. The company’s fiscal fourth-quarter results exceeded expectations on revenues but lagged the same on earnings.

The Zacks analyst likes its continued efforts to develop new products, international growth opportunities, strong financial position and growing cloud computing services. However, macro headwinds, continued investments and increasing competition from Tencent Holdings and Baidu remain the overhangs.

 (You can read the full research report on Alibaba here >>>).

Other noteworthy reports we are featuring today include CME Group (CME), Manulife (MFC) and Amphenol (APH).

Want to see all of today's Zacks Strong Buys? 
Today's 5 additions are just the appetizer. You are welcome to download the full, up-to-the-minute list of 220 Zacks Rank #1 stocks free of charge. There is no better place to start your own stock search. Plus you can also access the full list of must-avoid Zacks Strong Sells and other private research. See the stocks free >>.

Mark Vickery

Senior Editor

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>>>

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