Today's Must Read
AT&T (T) Rides on 5G Focus, Solid Fiber & HBO Max Traction
Shell (RDS.A) to Benefit from LNG Demand Growth
Monday, May 03, 2021
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 The Coca-Cola Company (KO), AT&T Inc. (T), and Royal Dutch Shell plc (RDS.A). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
Shares of Coca-Cola have gained +2.2% in the past one month against the Zacks Beverages - Soft drinks industry’s gain of +1.9%. The Zacks analyst believes that shares of Coca-Cola outpaced the industry in the past month, thanks to its robust earnings performance that continued in fourth-quarter 2020. This marked the fifth straight quarter of earnings beat. Gains from aggressive cost management aided margins. Although the top line lagged estimates and declined on a year-over-year basis, the company’s top line reflected improved trends compared with prior quarters.
However, continued pressures in the away-from-home channel, which account for nearly half of its revenues, affected revenues. Also, gains in the global value share in NARTD beverages was offset by negative channel mix.
Shares of AT&T have outperformed the Zacks Wireless National industry over the last six-month period (+16.2% vs. +9.8%). The Zacks analyst believes that AT&T is further well poised to gain from a solid subscriber growth on the back of a resilient customer-centric business model, driven by diligent execution of operational plans.
The company expects to continue investing in key areas while adjusting its business according to the evolving market scenario to fuel long-term growth with healthy dividend payment. It is likely to benefit from the streaming services of HBO Max, integrated fiber expansion and nationwide 5G deployment.
However, the company is facing a steady decline in linear TV subscribers, legacy services and wireline division. As it tries to woo customers with discounts and freebies, margins tend to fall. Spectrum crisis in a saturated wireless market and continued cord-cutting remain major headwind.
Shares of Royal Dutch Shell shares have underperformed the Zacks Oil & Gas Integrated industry over the year-to-date period (+8.1% vs +19.0%). However, the Zacks analyst believes that the company is poised for capital appreciation based on a slew of tailwinds. Shell’s trading business has been instrumental in helping the supermajor partly cushion the impact of the coronavirus-induced oil price slump.
Further, the company’s position as a key supplier of liquefied natural gas should benefit its long-term cash flow growth on the back of attractive growth opportunities. It is also making solid progress toward the transition to a renewable energy-focused future and pledged to attain zero-net emissions by 2050. Meanwhile, the firm’s high investment grade rating translates into low borrowing rates. Consequently, Shell is viewed a preferred energy major to own now.
Other noteworthy reports we are featuring today include Facebook, Inc. (FB), General Electric Company (GE) and Colgate-Palmolive Company (CL).
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Director of Research
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>>>