Today's Must Read
Numerous Deals, Investment in Technology Aid Mastercard (MA)
3M's (MMM) Core Focus Marred by Pension Costs, Currency Woes
Wednesday, January 3, 2018
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), Mastercard (MA) and 3M (MMM). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Buy-rated Apple’s shares are up +48.5% over the past year, handily outperforming the S&P 500 (up +19.4%) and the Zacks Technology sector (up +27.5%). The company is benefiting from steady iPhone sales, spurt in Services segment and resurgence in Mac and iPad sales.
Apple is anticipated to benefit from the strong demand for iPhone X in mature markets, which will help it to sustain momentum in the near term. Going ahead, the Zacks analyst thinks foray into fast-growing technologies like autonomous vehicles, artificial intelligence (AI) & AR/VR are long-term drivers.
Estimates have remained stable ahead of the company's Q1 earnings release. The company has positive record of earnings surprises in recent quarters. However, the new iPhone X at $999 is quite pricey, particularly for cost sensitive markets like India. Intensifying competition from cheaper Chinese handset-makers remains a concern.
Shares of Mastercard have gained +42.8% over the past one year, outperforming the Zacks Financial Transaction Services industry which has gained +34.4% over the same period. The Zacks analyst likes its solid market position, ongoing expansion and digital initiatives, and significant opportunities from the secular shift toward electronic payments. The acquisitions of VocaLink and NuData Security complement the company’s efforts to participate in new payment flows and enhance its safety and security offerings.
The stock has seen the Zacks Consensus Estimate for current-year earnings being revised 2.5% upward over the last 90 days. However, Mastercard continues to face increasing costs, a volatile forex environment and legal issues. Also, higher incentives and rewards will put pressure on the bottom line.
3M's shares have gained +8.9% over the past three months, outperforming the Zacks Diversified Operations industry, which has declined -3.4% over the same period. The Zacks analyst likes 3M's global footprint, diversified product portfolio and the ability to penetrate different markets.
At the same time, the company is continuing with its portfolio restructuring efforts by divesting assets that no longer fit in its strategy and continues to make investments in other lucrative markets. Portfolio management, investment in innovation and business transformation are the three key levers on which the company intends to focus. However, given its international presence, adverse foreign currency translations are likely to affect 3M’s ability to realize projected growth rates in sales and earnings.
3M is also facing increased pension expenses as its workforce begins to retire. The related extra costs are a drag on the bottom line. Sustained dollar strength remains another headwind as exports consume a significant part of the company’s operations.
(You can read the full research report on 3M here >>>).
Other noteworthy reports we are featuring today include Chubb (CB), AstraZeneca (AZN) and Mondelez (MDLZ).
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
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>>>