Today's Must Read
NextEra (NEE) to Gain From Renewable & Natural Gas Projects
Ford (F) Rides on Large Vehicles Production Expansion Plans
Thursday, February 15, 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), NextEra (NEE) and Ford (F). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Apple’s shares are up +23.6% over the last one year, outperforming the S&P 500 (up +15.5%) and in line with the Zacks Technology sector (up +20.5%). Apple reported strong earnings and top-line growth in first-quarter 2018.
The company’s top-line growth benefited from iPhone X’s higher average selling price (ASP), which offset sluggish unit sales growth. Paid subscriber base grew in the Services segment, which reflected strength in portfolio. Going forward, the Zacks analyst thinks Apple’s foray into fast-growing technologies like autonomous vehicle, artificial intelligence (AI) & AR/VR will drive growth in the long haul.
Moreover, Apple’s new investment plan will boost its subscription-based services business and put an end to the criticism it is facing for not creating enough jobs in the United States. Additionally, the impressive cash balance, post the tax reform, is expected to boost shareholder value. However, the sluggish demand for iPhone X remains a concern amid intensifying competition.
Shares of NextEra have outperformed the Zacks Electric Power industry over the last one year (the stock is up +19% vs. -3.5% decline for the industry). NextEra Energy’s performance was mixed with its earnings lagging expectation while total revenues surpassing the same in the fourth quarter.
The Zacks analyst stresses that the company’s investment to strengthen its infrastructure and ongoing capital projects, when completed, will help it serve its expanding customer base more efficiently. The company’s focus on clean energy has helped it lower emission levels, and use of new technology has saved on energy bills for its customers.
The natural gas pipelines, which came online in first half of 2017, are expected to boost its performance. The company’s nature of business is subject to complex and comprehensive federal, state and other regulations. Despite investments made to strengthen its infrastructure the unpredictable nature of natural disaster could derail normal operation and impact profitability.
Ford’s shares have underperformed the Zacks Domestic Automotive industry over the last three months (-10.8% vs. -2.7%). Ford’s recent plans to rev up production of new Lincoln Navigator & Ford Expedition at its Kentucky factory, is expected to drive its profit margins and create challenges for its rivals.
The company reported mixed fourth quarter earnings. Ford is expanding its production capacity in many emerging markets to facilitate supply, cost reduction and manage transportation challenges. It has been making quite a large amount of investment for the development of next generation cars, which can be beneficial in the long-run but are likely to create short-term strains on the financials of the company.
Other noteworthy reports we are featuring today include Hartford Financial (HIG), Harris (HRS) and Netapp (NTAP).
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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>>>