Today's Must Read
Chevron (CVX) Boosts Permian Position with Noble Buy
Focus on Core Operations Aid Citigroup (C), Legal Woes Linger
Thursday, February 25, 2021
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 Amazon.com (AMZN), Chevron (CVX) and Citigroup (C). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Amazon shares have outperformed the broader S&P 500 index over the past year (+58.6% vs. +28.1%), though the stock has lagged lately in solidarity with other large-cap Tech stocks in response to the uptrend in long-term interest rates. The Zacks analyst remains optimistic about the company's long-term prospects on the back of solid Prime momentum owing to ultrafast delivery services and an expanding original content portfolio.
The company reported impressive fourth-quarter results wherein both earnings and revenues topped the estimates and grew on a year-over-year basis. Robust holiday performance of the company was a major positive. Further, strengthening AWS services and its growing adoption rate contributed well.
However, accelerating coronavirus related expenses remain headwinds for the company’s margin expansion in the near term. Also, rising cloud competition from Microsoft and Google poses a risk.
Shares of Chevron have gained +22% in the last six months against the Zacks Integrated Oil industry’s gain of +30.2%. The Zacks analyst believes that Chevron’s Noble Energy takeover has expanded its footprint in the region and the DJ Basin along with the addition of cash-generating offshore assets in Israel.
While the company has struggled with depressed demand stemming from the coronavirus pandemic, it has reiterated its commitment to its dividend on a number of occasions. Consequently, Chevron is viewed a preferred energy major to own now.
Furthermore, it seems one of the best-placed global integrated oil firms to achieve sustainable production ramp-up. America’s No. 2 energy company’s existing project pipeline is among the best in the industry, thanks to its premier position in the lucrative Permian Basin.
Citigroup shares have gained +20.1% over the past three months against the Zacks Major Regional Banks industry’s gain of +24.5%. The Zacks analyst believes that Citigroup’s streamlining efforts, along with strategic investments in core business, bode well.
Also, net interest revenues will likely be supported by loan growth and mix, despite the low interest-rate environment. Further, manageable debt level makes Citigroup less likely to default interest and debt repayment obligations in case of any economic downturn.
Notably, the company announced the resumption of buybacks in first-quarter 2021. However, pending litigation issues might keep legal expenses elevated for the company. Additionally, a subdued consumer banking business might dent Citigroup's fee income base to some extent.
Other noteworthy reports we are featuring today include AT&T (T), Medtronic (MDT) and Morgan Stanley (MS).
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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>>>