Today's Must Read
Acquisitions Aid Mitsubishi UFJ (MTU), High Expenses A Woe
Netflix's (NFLX) Content Portfolio Solid, High Costs a Worry
Wednesday, November 22, 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 BP Plc (BP), Mitsubishi UFJ (MTU) and Netflix (NFLX). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Strong Buy ranked BP’s shares are up +4.7% in the year-to-date period, outperforming the Zacks International Integrated Oil industry (up +1.5%). The Zacks analyst likes the British energy giant’s renewed share repurchase program. Moreover, a rising cash balance over the last three quarters reflects the strength in BP’s financials. The integrated player expects its major upstream projects like Clair Ridge and Juniper developments to fetch significant cash flow starting 2020 and beyond. For financing the upstream developments, the company’s decision to divest Bruce assets is commendable. Moreover, the integrated firm has commenced natural gas production at the Khazzan field, expected to have an inventory of 300 drilling wells. Importantly, BP expects to boost its daily natural gas production from the Khazzan prospect to 1.5 billion cubic feet once the second phase of the development comes online.
(You can read the full research report on BP here >>>).
Shares of Mitsubishi UFJ have underperformed the Zacks Foreign Banks industry in the last six months, gaining +5.9% vs. +9.4%. Increase in the company’s profits can be attributed to elevated gross profits and credit reversal in the first six months of fiscal year ended Mar 31, 2018. However, rise in general & administrative expenses and reduced net interest income were undermining factors. Though the negative interest rates in Japan and global growth concerns along with strict regulations are headwinds, strong capital ratios and organic growth are likely to drive the company’s bottom-line growth. Also, the company’s prospects look encouraging, as it focuses on several strategies under its medium-term business plan (2016-2018) and global expansion.
Netflix’s shares have vastly outperformed the Zacks Broadcasting industry, gaining +66.8% vs. +12.5% in the past one year. Netflix’s growing subscriber base is the primary factor that helps it generate significant revenues. The company’s investments in regional programming help it to draw more international subscribers. The company remains confident of adding more subscribers as the trend of binge viewing is catching up fast. Netflix now has over 109 million subscribers globally. The Zacks analyst thinks continuing subscriber additions and expanding content portfolio are the key catalysts that will help Netflix to sustain growth going forward. However, higher investments on original/acquired content will continue to hurt profitability, at least in the near term. Stringent competition from other well-established players also poses a major concern.
Other noteworthy reports we are featuring today include Hormel (HRL), Raymond James (RJF) and Archer Daniels (ADM).
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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>>>