Today's Must Read
Accenture (ACN) Drives on IBB Acquisition, Apple Partnership
Sinopec (SNP) Focuses on Shengli Field, Operating Costs High
Monday, September 18, 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 UBS Group (UBS), Accenture (ACN) and Sinopec (SNP). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Shares of UBS Group AG have underperformed the industry on the NYSE in the last six months (+5.7% vs. +8.4%). The company’s profitability continues to be challenged by negative interest rates in the domestic economy and strict regulatory framework. However, UBS Group remains focused on building capital levels, global expansion and executing restructuring initiatives. Moreover, management anticipates to achieve CHF 2.1 billion in net cost reductions by the end of 2017. Further, the company’s strong capital position remains a tailwind.
Buy-rated Accenture has outperformed the industry over the past year, gaining (+22.5% vs. +21.2%). The company offers management consultancy, technology and outsourcing services. Optimism remains over Accenture’s latest product additions in the analytics application space, given the increasing demand for digital solutions. Moreover, Accenture’s strategy of growing through partnerships like Apple and acquisitions like IBB and VERAX are encouraging. The strategies have enabled Accenture to enter new markets, diversify and broaden its product portfolio, and maintain its leading position.
Nonetheless, Accenture’s recent announcement of creating 15K new jobs by 2020 and investment plan of $1.4 billion for employee training and opening of 10 innovation centers across the U.S. cities may dent its bottom-line results. Furthermore, increasing competition from peers and an uncertain macroeconomic environment may deter its growth to some extent.
Sinopec’s price chart reveals that it has significantly outperformed the industry year to date, increasing (+10.5% vs. +5%). Through its refinery business, Sinopec has been able to withstand the crude price weakness to a large extent. During first-half 2017, consumption of refined petroleum products jumped almost 6% from the prior-year comparable period. Also, declining long-term debt load along with a rapidly rising cash balance reflect balance sheet strength. Sinopec has also made large-scale oil discoveries, especially in the Shengli field, which will support long-term production.
However, it is expected that Sinopec’s matured domestic oil fields and associated rising costs will remain an overhang on its operations. Sinopec’s operating expenses during the first half of 2017 increased nearly 40%. Moreover, overdependence on downstream operations might limit Sinopec’s growth prospects. Given these factors, it is wise to wait for a better entry point.
Other noteworthy reports we are featuring today include TE Connectivity (TEL), Wells Fargo (WFC) and Restaurant Brands International (QSR).
New Report: An Investor’s Guide to Cybersecurity
Cyberattacks have become more frequent and destructive than ever. In fact, they’re expected to cause $6 trillion per year in damage by 2020.
The cybersecurity industry is expanding quickly in response to these threats. In fact, a projected $170 billion per year will be spent to protect consumer and corporate assets. Zacks has just released Cybersecurity: An Investor’s Guide to Locking Down Profits which reveals 4 promising investment candidates.
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>>>