Today's Must Read
Construction Demand, Wirtgen Acquisition to Boost Deere (DE)
VMware (VMW) Drives on Strong Bookings, Competition Hurts
Friday, December 1, 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 JPMorgan (JPM), Deere (DE) and VMware (VMW). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
JPMorgan’s shares have outperformed the Zacks Major Regional Banks industry over the past six months (up +26.5% vs. +18.1%). This price performance is backed by impressive earnings surprise history, with the company having surpassed expectations in all the trailing four quarters.
The Zacks analyst likes the bank’s efforts to control expenses. Combined with the improved rate scenario and rising loan demand, these initiatives should continue to benefit JPMorgan’s financials. Given its solid liquidity position, the company is expected to continue enhancing shareholder value through efficient capital deployment activities.
However, the company faces persistent fee income growth challenges, mainly due to slowdown in trading activities and dismal capital markets performance. Also, legal expenses are expected to continue lingering in the near-term.
Shares of Strong Buy-rated Deere shares have surged +47.7% over the last one year, outperforming the Zacks Farm Equipment industry, which has gained +42.7% over the same period. Deere’s top and bottom lines witnessed year-over-year growth in fourth-quarter fiscal 2017, beating expectations on both counts.
Deere projects total equipment sales to climb nearly 38% year over year in first-quarter fiscal 2018 and 22% in fiscal 2018 compared with the year-ago periods. The Zacks analyst likes Deere’s disciplined cost management and continued investment in innovative technology and solutions.
Higher housing starts in the United States and an improving oil and gas sector bode well for the company. Recovery in the dairy and livestock sectors will drive growth in the EU28 region. Further, Deere’s acquisition of Blue River Technology and the pending Wirtgen acquisition remain tailwinds.
VMware’s shares have gained +52.6% year to date, outperforming the Zacks Software industry which is up +36.1% over the same period. VMware's strong third-quarter fiscal 2018 results can be attributed to robust performance of its product offerings like NSX, vSphere and vSAN.
The Zacks analyst thinks expanding product portfolio, partnerships with the likes of Intel, IBM, Amazon, Samsung, Fujitsu, Pivotal, Alphabet, and Microsoft along with continuing enterprise deal wins will drive results in the rest of fiscal 2018. Moreover, aggressive share repurchase will support bottom-line. However, several of the growth engines that the company is relying on could take longer to yield results.
Heavy spending on R&D may weigh on its margins in the near future. Moreover, intensifying competition from Microsoft and Citrix Systems remains a major headwind in the near term.
Other noteworthy reports we are featuring today include Monster Beverage (MNST), Principal Financial (PFG) and Fortive (FTV).
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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>>>