Today's Must Read
Schlumberger (SLB) Banks on Offshore Projects, Debts High
Loan Growth to Brace JPMorgan (JPM), Fee Income a Concern
Thursday, September 28, 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 Boeing (BA), Schlumberger (SLB) and JPMorgan (JPM). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Boeing's shares have surged +93.7% over the past year, outperforming the Zacks Aerospace & Defense sector, which gained +43% during the same time period. Boeing is the largest aircraft manufacturer in the world in terms of revenue, orders and deliveries, and one of the largest aerospace and defense contractors.
The company’s 20-year market outlook, forecasts commercial jetliner demand to increase by 3.6%. The single-aisle jets are expected to be the major driver behind demand growth. Further, the company’s defense business stands out among its peers by virtue of its broadly diversified programs and strong order bookings.
However, the company continues to face challenges from order cancellations, stiff competition as well as falling delivery numbers. Boeing’s 787 Dreamliner's deferred production cost also remains a cause of concern for the company. For its 747 model, weak demand for large commercial passenger and freighter aircraft also adds to the woes.
Shares of Schlumberger lost -17.1% value year to date, following the Zacks Oil and Gas Field Services industry’s -26.2% decline. Schlumberger is the world's largest oilfield services company. The firm’s focus on lucrative international markets deserves special mention. Being the leading provider of technology for complex oilfield projects, Schlumberger is better positioned than most peers to take up new offshore projects in the shallow water basins outside North America. Also, the company’s dividend yield is higher than Zacks Oil Field Services industry.
However, lack of exposure to profitable U.S. shale plays might reduce the number of oilfield service contracts for Schlumberger. Moreover, since 2015, long-term debt at Schlumberger has been on the rise. Also, the company’s cash balance has been going down steeply since the beginning of 2016.
JPMorgan's shares have marginally outperformed the Zacks Major Regional Banks industry over the past six months, (+7.9% vs. +7.4%). This price performance is backed by impressive earnings surprise history.
The company has surpassed the Zacks Consensus Estimate for earnings in all the trailing four quarters. Its efforts to control expenses through streamlining and branch consolidation are commendable. These have been supporting bottom-line growth. While the company faces a persistent fee income growth challenge, the improved rate scenario, potential lesser regulations and rising loan demand should continue to benefit its financials.
Other noteworthy reports we are featuring today include Praxair (PX), Cerner (CERN) and PACCAR (PCAR).
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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>>>