Today's Must Read
Visa (V) Grows on Europe Acquisition, High Incentives Hurt
Coca-Cola (KO) to Gain From $3.8 Billion Cost Saving Plan
Tuesday, September 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 Apple (AAPL), Visa (V) and Coca-Cola (KO). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Apple’s shares are up +43.2% in the year-to-date period, handily outperforming the S&P 500 (up +12.5%) and the Zacks Technology sector (up +20.5%). Apple’s growth is being driven by the impressive Service segment performance as well as steady iPhone sales.
Upbeat guidance for the quarter ending September widely alleviated fears of a delay in the launch of the next edition iPhone, dubbed as iPhone 8. Apple is expected to unveil the mega edition on Sep 12, 2017 at its big event.
Recently, Apple signed a deal with Accenture to create innovative business solutions for iOS. Apple’s continued focus on penetrating the enterprise business is another positive.
The Zacks analyst thinks Apple’s foray into fast-growing technologies like AI & AR/VR and strengthening of presence in emerging markets like India will emerge as long-term growth catalysts. However, company’s China troubles and increasing competition continues to be a concern.
Shares of Visa have outperformed the Zacks Financial Transaction Services industry as well as MasterCard in the year-to-date period (Visa is up +32.8% vs. +28.9% gain for MA and +26.2% 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, largely on account of new payment options, have also started receding. A solid balance sheet position ensures effective capital deployment. On the flip side, forex volatility, increased client incentives and global economic uncertainty are some of the headwinds.
Coca-Cola’s shares have gained +12.2% in the year-to-date period outperforming the Zacks Consumer Staples sector as a whole, which has gained +11.8%. The Zacks analyst likes Coca-Cola’s increased marketing investments which are driving volume growth in stable markets like North America.
Moreover, the company is on track to achieve total annualized productivity saving target of approximately $3.8 billion by 2019 from the initiatives implemented under this program since its beginning. Also, Coca-Cola’s new revenue platforms should drive growth over the long term.
However, sales are getting affected by declining demand in certain emerging and developing markets and shift in consumer preference. Also, severe macroeconomic challenges in certain international markets have impacted results for the cola giant, which generates about half of its sales abroad.
Other noteworthy reports we are featuring today include PNC Financial (PNC), Travelers (TRV) and Blackstone (BX).
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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>>>